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Nandipur Power Project: Plagued by problems

The project is a classic example of political and administrative neglect

Nandipur Power Project: Plagued by problems
Photo by Rahat Dar

Eight years after work was started on the Nandipur Power Project, it is still unable to generate electricity. The project is marred by cost overruns and political and administrative blunders committed by successive governments of the Pakistan Peoples’ Party and Pakistan Muslim League-Nawaz.

A thermal plant, located on the left bank of the Upper Channel Canal, near village Nandipur, Gujranwala, it was expected to generate 425MW of electricity if run with furnace oil and 525MW with gas. The Economic Coordination Council (ECC) approved the project in December 2007. The initial cost of the project was estimated to be Rs22 billion. However, according to the National Electric Power Regulatory Authority (Nepra), the current cost is Rs84 billion.

Work on the power plant commenced in October 2008 and was expected to complete by April 2011. But, work was halted in April 2010 after the federal law ministry asked to get the project examined by legal authorities. Meanwhile, the foreign loans expired in August 2011 and the project consignments were stopped at the Karachi port.

In May 2014, when Prime Minister Nawaz Sharif inaugurated the first turbine of the project, of around 95MW capacity, he said, “Miracles happen in this world and the functioning of this project is one of them.”

A miracle did happen, the turbine had to be stopped a few days after Nawaz Sharif inaugurated the project — because it was being run on diesel and producing very costly electricity.

The project, designed to be run on furnace oil, started functioning before the Furnace Oil Treatment Plant was installed. FOTP arrived much later and when it did arrive it was not of the required capacity. No one, not even the project authorities and consultant company Nespak, was held accountable.

“After the installation in September 2014, despite repeated attempts, the FOTP could not work at its optimum capacity. Now, the company would install two additional skids, at its own risk and cost, to meet the deficiency,” reads an official correspondence, a copy of which is available with TNS.

The Nandipur plant was originally designed to run on furnace oil. Later, additions were made to it so it could run on gas and diesel as well, making it a tri-fuel plant. “This cost an extra Rs10 billion at least. The decision was made by the government last year, keeping in view the high price of furnace oil.”

The Nandipur plant was originally designed to run on furnace oil. Later, additions were made to it so it could run on gas and diesel as well, making it a tri-fuel plant. “This cost an extra Rs10 billion at least. The decision was made by the government last year, keeping in view the high price of furnace oil,” the project official, who does not want to be named, tells TNS.

The project was awarded to China’s Dong Fong Electric Company, that was already blacklisted by the state-owned Public Procurement Regulatory Authority (PPRA) in Pakistan for supplying faulty railway engines in May 2013. There is a clear warning on PPRA website not to do business with this company.

“Nandipur power project implementation is a classic case of project management failure, professional incompetence and delays,” observes Tahir Basharat Cheema, former Managing Director Pakistan Electric Power Company (Pepco), adding that till now the plant is said to have produced less than 10 per cent of the expected electricity generation. “The project needed to be run by a thorough professional engineer rather than a civil servant appointed as managing director”.

Muhammad Mahmood, a retired army captain and a grade 20 officer, who joined civil service in 1995, was appointed the managing director of the Nandipur Power Project on the behest of Punjab Chief Minister Shahbaz Sharif in July 2013. Prior to this, he was director general Parks and Horticulture Authority (PHA) in Lahore. Mahmood, who was reluctant to accept this position in the beginning, defended his position later in media, saying his role was supervisory not technical.

He was awarded Tamgha-e-Imtiaz for his miraculous work and his team was granted three bonuses on Shahbaz Sharif’s recommendation.

Raja Pervaiz Ashraf, former Premier and Minister for Water and Power, has said on tv recently, that the ruling party should fix responsibility for the mess up on the concerned minister and chief minister who appointed a civil servant as MD of the Nandipur Power Project. “When the project faced delays in our period, the PML-N blamed the ministry and moved the court. Now they are silent on the fiasco they have created.”

The equipment and machinery meant for the plant has been rotting at the port for more than two years. This has caused a total loss of Rs113 billion in power projects Nandipur and Chicho Ki Malian to the national exchequer, according to a judicial probe. The one-member judicial commission constituted in October 2011, interestingly, was appointed in response to a petition filed by Khawaja Muhammad Asif who was then in the opposition. The judicial commission had ruled that there was negligence on the part of the federal law ministry in delaying the completion of the projects.

PPP senator Babar Awan, who is criticising the PML-N government for delaying the project, was then the law minister.

Claiming to resolve the energy crisis in six months after coming into power, the Punjab CM Shahaz Sharif took de facto charge of the project in 2013 despite it being a federal government project. “Things were done out of the way and in haste too in good faith and in good spirit as a national service to resolve energy crisis,” a senior management official of the project tells TNS.

Tariq Hameed, former chairman Wapda, who initiated this project, while talking to TNS, said “the company that was supposed to make it fully operational be called and asked to run it successfully”.

Hameed got approval for three thermal power projects in the public sector from the government in 2007. Among those, Nandipur power project met delay; Chicho Ki Malian power project could not start; and Guddu power project construction is still under way.

The plant management authorities shift responsibility on the Genco III board (entrusted with supervisory services of the plant) for not giving approval to a Malaysian company that bid for the running of the plant despite repeated reminders. The management had written to the board in November 2014 for giving approval to the lowest bidding Malaysian company but the board responded after a year, refusing the bid.

An official of this project says, “Inadequacy and lack of in-house staff and resources left the technical team with no option but to keep the plant shut”. Defending the management of the plant, he adds, “Every effort has been made to resolve the outstanding issues — appointing operator, restructuring loans, revision of the plan, solving problems — but these issues remain unresolved before the relevant board because rules were being bypassed on the behest of the ruling political elite.”

He adds, it will take at least six months to make the FOTP functional. “There will be additions to it by the same company and then it will be able to work fully”.

Till date, the political elite — from the PM to the concerned ministry to the administrative authorities to the management of the board — has not been held accountable for these serious neglects, in fact they are playing the blame game at best.

Waqar Gillani

waqar gillani
The author is a staff reporter. He can be reached at [email protected]

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