Senate directs govt not to pass NPP losses on to consumers

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Islamabad

The Sub-Committee of the Senate’s Standing Committee on Water and Power on Monday directed the government not to pass on the losses of Nandipur Power Project (NPP) to consumers. The committee met here with Nauman Wazir Khattak in the chair. It was attended by Nisar Muhammad and Muhammad Daud Khan Achakzai.
The committee members observed that the consumers should not be burdened with the losses incurred due to delay in the completion of power projects. Senator Wazir remarked that the then law minister Senator Babar Awan was responsible for around three years delay in the completion of Nandipur project causing an enormous loss of approximately Rs 36 billion.
The National Accountability Bureau (NAB) Director General told the committee that the Nandipur Power Project, which was launched in 2008, was still incomplete despite lapse of nine years.
He said in the original PC-1 total cost of the project was Rs 22.335 billion, which in the revised one was raised to Rs 58.416 billion, thus incurring a loss of Rs 36.08 billion.
He said after conducting special audit of the Nandipur project, the Auditor General had calculated loss of Rs 36 billion in terms of cost escalated mainly due to prolonged holding of legal opinion by the Ministry of Law and Justice for foreign credit facilities, which could not be utilized for timely clearance of plant equipment from ports.
The NAB DG said the agreement for Nandipur Power Project was signed between Pakistan Electric Power Company (PEPCO) and Chinese company Zong Fong Electric Corporation in January 2008, under which the latter was paid 10 per cent of the project’s cost as down payment. The project was to be completed in 2011.
He said before commencing the work on the project, the Chinese firm had sought a legal opinion of Ministry of Water and Power. A summary in that regard was forwarded to the ministry in 2010 during the government of the Pakistan Peoples Party. But the summary remaind pending on the table of then Law Minister Dr Babar Awan till 2012, when the Chinese company president made a strong protest with the Government of Pakistan for delaying the project, he added.
The NAB DG said heavy machinery and equipment for the project had arrived at the Karachi port in 2010 and remained dumped there in the open for almost two years, turning into scrape due to rusting.
The Chinese company, he said, then demanded $85 million as compensation for the machinery, which it alleged, got rusted due to negligence of the Pakistani authorities. However, the then government refused to pay the amount to the firm as the rusted equipment and machinery were of no use.
He said in 2013, negotiations were held between the high-ups Ministry of Water and Power and executives of the Chinese company and as a result of which Zong Fong Corporation started work on the project.
The machinery, which had become out of order due to use of substandard oil, was made useable again, he added. The committee showed displeasure on NAB officials for delay in finalising the inquiry report as the case was forwarded to them in 2013 and the report was yet to be finalized after passage of even four years.
The committee directed the NAB to submit its report within two months and called the officials Ministry of Law and Justice to attend its next meeting. —APP