Delay in approval of revised tariff: Tabish-led PD team meets Nepra bigwigs

ISLAMABAD: A four-member team of Power Division led by SAPM on Power and Petroleum, Tabish Gauhar held a meeting with Nepra to seek explanation on reasons for the delay in approval of revised tariff of $ 1.7 billion ± 660kV HVDC Matiari to Lahore Transmission Line, well-informed sources told Business Recorder.

A couple of months ago, Gauhar publicly hurled accusations of under invoicing in transmission line project. On his accusations, National Accountability Bureau (NAB) issued a strongly worded press release, and sought record from the office of Federation of Chamber of Commerce and Industry (FPCCI) Karachi.

On July 1, 2021, Managing Director, PPIB, Shah Jahan Mirza and the then acting MD, NDTC, Muhammad Ayub refuted the charges of SAPM, saying that there was no under invoicing in the project. Shah Jahan Mirza also suggested that Gauhar is sitting on a responsible position and if he thinks that something is wrong, he must get it probed.

Gauhar in his tweet also claimed “expensive projects in previous regimes are contributing heavily to circular debt. Lahore Matiari transmission line is an example of such a project. We have to pay Rs 50 billion yearly on this project and the total cost of managing NTDC’s transmission system for the country is nearly the same.”

The team which met with Nepra’s Authority also comprised of Chairman NTDC Board, Naveed Ismail, newly appointed MD NTDC Azaz, whose package is $ 15000 per month.

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On Friday, in a tweet Gauhar said “joint meeting with NTDC and Nepra Authority on various issues, especially the ongoing projects to remove all major transmission constraints by 2023. Heartening to see seasoned professionals at the regulator and licencee actively collaborating in the public interest.”

Nepra on a number of occasions has directed NTDC to remove system constraints.

The sources claim that Nepra is under pressure to revise the tariff of transmission line due to which rifts in the Authority have also been reported.

Recently, the federal government extended Required Commercial Operate Date (RCOD) of $ 1.7 billion ± 660kV HVDC Matiari to Lahore Transmission Line Project for six months, after negotiations with the Chinese company.

The 878 kilometers 4,000 MW project is being executed by Pak-Matiari Lahore Transmission Company (Pvt) Limited, on Built-Own-Operate-Transfer (BOOT) basis for a term of 25 years. The construction of the project is complete and is under testing and commissioning phase. The project will evacuate power from the new generation units located in the south including Thar coal-based projects. The project is included in the CPEC portfolio. The ECC on July 25, 2017 approved the Security Package Documents, ie, Implementation Agreement (IA) and Transmission Services Agreement (TSA) which were subsequently executed on May 14, 2018.

The NTDC will be responsible for operation and maintenance of the transmission line for which an Operation and Maintenance (O&M) agreement was executed with the Company on May 14, 2018.

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According to sources, on December 2, 2020, severe frequency obligations were observed in the system when the project was under monopole low power testing; consequently, the testing was stopped and the test was declared failed by NTDC and Owner Engineer M/s Hatch, Canada (OE) of NTDC. The company submitted Root-Cause Analysis report (RCAR), which was reviewed by both Independent Engineer (IE) & OE. OE declared the Certificate of Readiness as null and void and IE & OE recommended certain additional measures to be taken at Matiari converter station prior to start of testing.

Thereafter, NTDC revisited all technical and contractual obligations which were to be fulfilled by the company under the TSA and issued a Notice of Dispute (NoD) on December 11, 2020 highlighting various contractual obligations not fulfilled by the company and challenged the certificate of readiness as well as testing and commissioning of the project pursuant to section 8.9 of the TSA.

Afterwards, as a result of extensive discussions between NTDC, the company, OE and IE, way forward on resolution of issues was agreed on the issues raised under the Notice of Dispute and MoU was signed between the company and NTDC, which was subsequently approved by respective BoDs of NTDC and the company. In the light of MoU, draft addendum agreement to the TSA and O&M Services Agreement were agreed between the company and the NTDC and their respective BoDs accorded approval for it which was later signed by both sides.

Copyright Business Recorder, 2021