Master group to set up 99MW hydropower project

KARACHI: Master Hydro Power, a joint venture of Master Textile Mills and Chinese Huadong Engineering Corporation, won the bid to set up 99 megawatts of hydroelectricity project in Chitral, an official document said on Tuesday.

It was the first such project as a result of the competitive bidding process. The project is to be developed as an independent power producer on a build-own-operate-transfer basis.

Government of Khyber Pakhtunkhwa, through the Pakhtunkhwa Energy Development Organization (Pedo), planned to implement the 99MW Arkari Gol hydropower project under the Khyber Pakhtunkhwa Hydropower Policy 2016.

Pedo proceeded to develop a generic request for proposal (RFP), which was approved by the National Electric Power Regulatory Authority (Nepra).

Pedo then proceeded with the competitive bidding process and called for bids. Siddiqsons Energy, Act 2 Wind Pvt Ltd, Master Textile Mills Limited, Army Welfare Trust, Engro Powergen Limited and Fatima Group were pre-qualified for the project.

Alone Master Textile Mills and Fatima Group submitted the bids.

Master Textiles proposed a total cost of $223.76 million for the project, translating into $2.26 million/MW, while Fatima Group proposed a total cost of $283.65 million or $2.87 million/MW.

Pedo said the bid received from Master Textile Mills Limited and Huadong Engineering Corporation Ltd. is substantially responsive with regards to “completeness, competitiveness and reasonableness, and has the lowest rank”.

Nepra, however, pointed at numerous inconsistencies and deficiencies in the document submitted by Pedo, including Pedo’s evaluation of the bidder’s tariff.

It was found that the bid evaluation report was not strictly in the format as prescribed in the RFP and deviations were not rationalised or explained in the Pedo's report.

Subsequently, Pedo on behalf of the project sponsors filed a review motion and offered a voluntary reduction in tariff from the previously evaluated Rs8.9391/kilowatt hour (kWh) to Rs8.2896/kWh.

Nepra found the quoted and evaluated revised rate of Rs8.2896/kWh as reasonable and prudent. The review motion was accepted and Master Textiles was notified as the successful bidder for the Arkari Gol project. The bidder incorporated a special purpose vehicle with name of Master Hydro Power (Private) Limited to develop the project.