Betting on Nandipur?

Quite a few developments have been made on Nandipur Power Project - the country's second largest thermal power plant of country after Guddu - since the column last talked about it. But these might not exactly be in the positive direction. The government seems to be adamant on boasting about the controversial projects that was inaugurated in critical times last year.Already the project has attracted spotlight due to its over seven year delay, sky-rocketing cost escalation, and lack of professionalism. A key setback to the project has been the sacking of Nandipur Power Company Managing Director Captain (Retired) Muhammad Mehmood, as criticism over alleged corruption and bad governance surmounted the directors award of Sitara-e-Imtiaz. While the cause behind his removal has been ignoring the recommendation of the board of directors and awarding the O&M contract to a Malaysian firm, he defended his decision to hire a long-term operator by blaming the BOD for delays in awarding a contract to the lowest bidder.Besides that, National Accountability Bureau (NAB) initiated an investigation of the project. Phase one of the two-phased investigations has been completed, which covered the period from approval till its first initiation; the second phase would probe of the causes behind cost overruns and payments status. While NAB plans to disclose the findings once the investigation is complete with its second phase, another controversy has hit the ill-fated power project. The government has sought for another increase in the cost of the project. The initial contract cost was around Rs23 billion, which shot up to Rs58 billion in April 2015 when the present government renegotiated it. However, NEPRA jumped in and cut certain elements of the cost to bring the total down to Rs45 billion. Now the government has applied for a 44 percent increase in the cost of the project through Northern Power Generation Company Limited (NPGCL), which is the subsidiary of the power ministry that operates plant. It doesn end here; the project has had another issue. Dong Fang Electric Corporation China, which has been contracted the projects EPC has refused take over the project for another six months as requested probably due to the recurring controversies. Experts are calling government policies made in haste; while the focus on energy and power sector by the government seems in the right direction as the sector is the single biggest hurdle in growth, the government is completely ignoring the existing available capacity it can utilise by moving ahead with new projects even if it means compromising cost escalations and declining feasibility. Yes, adding new capacity is useful (both for indigenous generation as well as political point scoring), but to increases the sectors efficiency and growth contribution; it will have to invigorate the idle capacity in the energy sector.