Deadlock in commissioning of Matiari-Lahore HVDC transmission project

ISLAMABAD: In the latest development, Chinese company Pak Matiari- Lahore Transmission Company (PMLTC), which completed ±660kV Matiari-Lahore HVDC Transmission Project with investment of $2.2 billion in two years time, has threatened to move the international arbitration court against the government-owned company National Transmission Dispatch Company (NTDC) for creating hurdles in the commissioning of the project.

The Chinese company has asked the board of directors of NTDC to hold a meeting and give it an opportunity for briefing on the causes of oscillation that happened on December 2, 2020 during the commissioning of the system. The project is the major flagship project of CPEC scheduled to achieve commercial operations date (COD) on 1st of March 2021. However, due to the deadlock, the commercial operation date of the project is in jeopardy.

In a letter written on February 06, 2021 to chairman of NTDC Board Naveed Ismail, Zhang Lei, Chief Executive Officer of Pak Matiari-Lahore Transmission Company, said that PMLTC completed the project in two years time and started the system commissioning on December 1, 2020. The letter also mentions that since the oscillation event occurred on December 2, 2020, the commissioning was suspended by NTDC for more than two months now and more than 300 engineers and technicians are sitting idle at the site. The letter has also been copied to the Federal Energy Minister, Secretary Power Division and Director General (China), China Division in the Ministry of Foreign Affairs.

The letter also mentions that the parties are currently in a deadlock on finding out the way forward to resume the commissioning and progressing the project. In the letter CEO PMLTC has asked for time from the BOD chairman of NTDC for briefing on the reasons for oscillation to break the deadlock.

The official, while quoting the top management of PMLTC, said that in case the Government of Pakistan or NTDC do not listen to Chinese company's point of view, then it will have no option but to go for international arbitration. He said that the Chinese company has made direct investment of $2.2 billion in this project under the CPEC umbrella. The Matiari-Lahore HVDC Transmission Project once onstream will evacuate 4,000MW of electricity from south to north of the country.

Earlier, the Chinese company PMLTC wrote a letter on January 27 to the Federal Minister for Energy Omar Ayub Khan seeking his intervention over resumption of system's commissioning.

The issue surfaced when the NTDC refused to declare the Certificate of Readiness (CoR), issued by Independent Engineer (CESI), as valid. This irritated the PMLTC. The denial came from the NTDC when its grid experienced oscillation during the testing after completion of the project. The Chinese company says the NTDC has not undertaken the responsibilities and actions as per the Transmission Services Agreement and Tariff Determination (TSATD), which caused inability to perform full load testing. The Chinese contractor PMLTC in its letter written on January 27 to the Federal Minister for Energy, argued it is normal to have such problems during testing. The causes of that problem do not pertain to the pre-commissioning tests, said the communication.

NTDC MD Dr Khawaja Riffat Hasan did not respond to the questions of The News on the deadlock. The Power Division also remained non-responsive. However, inside sources say that Power Division is siding with NTDC's action as it wants the HVDC transmission line oscillation free project.