ISLAMABAD: The management crisis in National Transmission and Despatch Company (NTDC) has inflicted billions of rupees’ financial loss to the national exchequer on account of delays in some key projects, well-informed sources told Business Recorder.
The main problem has been the conduct of the Board of Directors (BoD) headed by Naveed Ismail, who is also facing NAB inquiry as to the BoD and its committees are meeting more than once a month and its Chairman has also taken over the operations of the company, informally.
A Deputy Director level functionary of the Admin/ HR cadre had been given the position of GM HR NTDC who is running all the affairs of NTDC being a close aide of Chairman NTDC.
The internal fight between the top officials of NTDC is also going on to capture the position of Managing Director after a verdict of Islamabad High Court (IHC) against acting MD Manzoor Ahmed.
Power Division’s section which oversees the affairs of NTDC receives complaints of officers against each other which indicates a far from the ideal situation in the key power sector organisation.
Massive changes in BODs of power sector entities on the cards
The delayed projects and detail of financial losses is as follows: (i) Lahore North switching station: ADB-300A-2018: Procurement of Plant Design, Supply, Installation, Testing, and commissioning of 500/220/132kV Lahore North substation and Extension Works at 500/220/132kV Nokhar- during last 38 months, during which the NTDC has not been able to decide this tender, the state of Pakistan suffered losses on three accounts: the rising price of dollar, price escalation and general inflation.
When the first bid was opened, the dollar cost was Rs159, which has now jumped to over Rs200 – almost 25 per cent loss on this head. Meanwhile, price escalation added yet another layer to loss and the NTDC is now considering a bid of Rs14.87 billion against the previous one of Rs13.26 billion – a jump of Rs1.6 billion. The new price is 21 per cent more than the engineer’s estimate
(ii) 500kV Maira Switching Station ADB-300B-2019: Procurement of Plant Design, Supply, Installation, Testing and commissioning of 500kV Maira (Abbottabad) Switching Station-NTDC took eight months to evaluate against a maximum limit of 180 days, as mentioned in the tender documents. The state of Pakistan has suffered major losses on dollar accounts and price escalation. At the technical bid opening date, dollar cost was Rs159.06, which has now jumped to over Rs200 – almost 25.38 per cent loss on this head. The awarded price is 22 per cent more than the engineer’s estimate. Now, the price is $7.7 million higher – from $28 million to $35.70 million.
(iii) 500kV Nowshera Substation: Wb-05A-2020: Procurement of Plant Design, Supply, Installation, Testing and commissioning of 500kV Nowshera substation - NTDC has evaluated this tender in 15 months, whereas bid validity is mentioned as six months in tender documents. It delayed the award by nine months before award of contract. Moreover, the state of Pakistan has suffered a major loss in dollar accounts. At the technical bid opening date, dollar cost was Rs159.08, which has now jumped to over Rs200 – almost 25.12 per cent loss on this head.
(iv) Procurement of 220kV Transmission Line Equipment: TLM-13- 2021: procurement of Non-Ceramic Composite Insulator strings for 220kV Transmission Lines associated with 220kV SEZ Dhabeji G/s (submission without considering the abnormal inflation all over the world).
The state of Pakistan has suffered major loss on dollar account. At the technical bid opening date, dollar cost was Rs166.45, which has now jumped to over Rs200 – almost 20 per cent loss on this head. The project has been canceled on the basis of a delay in the Dhabeji substation award. Now it is re-tendering and price is expected to go up by at least 20 per cent of the previous price on the account of logistic cost as well as raw material cost, etc.
(v)Procurement of transmission line material (220kV), tender No. WPP-14-2019 LOT-I, procurement of material for 220kv and 132kv transmission lines associated with the evacuation of power from wind power projects in Jhampir clusters. NTDC has annulled the tendering process within four months of bid submission without considering the volatile market.
The state of Pakistan has suffered a major loss on dollar account. At the technical bid opening date, dollar cost was worth Rs139 which has now jumped to over Rs200 – almost 44 per cent loss on this head. The NTDC scrapped the tender because only one bidder qualified. London Metal Exchange (LME) rate at time of technical bid opening & financial bid opening was $1100 and $1370 per ton respectively. Today (June 1, 2022), the rate has touched $1,960 per ton, which is 78 per cent higher than when the technical bid was opened.
(vi) Procurement of transmission line material (500kV) Tender No. TLM-09M-2019 for procurement of material for 500kv D/C quad bundle transmission line from Thar coal block-1 to Matiari converter station for power evacuation from coal power plants. NTDC took 10 months before scrapping the tender on account of internal dispute over which bidder to qualify or whom to disqualify.
The state of Pakistan suffered major loss on dollar account. At the technical bid opening date, dollar cost was Rs160.5 which has now jumped to over Rs200 – almost 24 per cent loss on this head. LME rate at time of technical bid opening & financial bid opening was $1,220 and $1,641 per ton respectively. Now the LME rate is $1,960, which is 61 per cent higher when technical bid was opened and 19 per cent more than financial bid opening.
(vii)Procurement of transmission line material (500kV) Tender No. TLM-11-2021 for procurement of material for 500kv double circuit quad bundle transmission line from Thar coal block-1 to Matiari converter station for evacuation from coal plants. NTDC has scrapped the tender in seven months because no bidder wanted to extend the bid validity due to increase in LME prices. The state of Pakistan has suffered major loss on dollar account. At the technical bid opening date, dollar cost was Rs 155 which has now jumped to over Rs200 – almost 29 per cent loss on this head. LME Cost, meanwhile, has also gone up.
(viii) EPC 220kV Transmission Line Project: ADB-301C: Procurement of Plant – Design, Supply, Installation, Testing and Commissioning of 220kV Overhead and Underground Transmission Lines Lot-II. Again NTDC failed to complete the evaluation in time and Manufacturers/ bidders refused to extend the bid validity due to increase in different prices, i.e., shipping cost, raw material, etc. Keeping in view the volatile market throughout the world, it can easily be foreseen that NTDC will bear a cost that will be at least 20 per cent higher on the account of dollar rupee parity and 20% on the basis of price escalation. Original cost of project was Rs 6.3 billion which is expected to rise to Rs 7.5billion.
(ix) EPC 220kV Dhabeji (Thatta) GIS Grid Station NOR-112R-2021: Plant Design, Supply, Installation, Testing and commissioning of 220/132/11kV GIS S/s Dhabeji on Turn-key Basis under own resources. NTDC has not completed the evaluation procedure of the project and has been cancelled two times (first time by K-Electric and second time by the NTDC) and now it is under evaluation for the third time that shows how projects are being delayed by the NTDC, but no one is being held accountable for this. The state of Pakistan has suffered major loss on the dollar account. At the technical bid opening date, the dollar cost was Rs179.90 which has now jumped to over Rs200 – almost 11 per cent loss on this head.
(x) Dasu Transmission Line (LoT-1) Dasu-TL-01: Design, Supply, Installation, Testing & commissioning of 765kV Double Circuit Transmission Line, Dasu- Mansehra- Islamabad (LOT-I). This project’s PQ was floated in June, 2020 and tender floated in June, 2021; while, tender opened in Nov, 2021 which means cumulatively 2 years has been consumed so far. But, the project’s fate is still hanging in balance. Instead of making the decision about award of contract, project is being delayed and pushed towards re-tendering. In this particular case, the failure to evacuate power from DASU hydro power plant will cause huge generation and revenue losses and attract penalties.
The Dasu HPP timeline is as follows: (i) first unit is due in May, 2026; (ii) second unit is due in July, 2026; (iii) third unit is due in Aug, 2026;(iv) forth unit is due in Nov, 2026;(v) fifth unit is due in February, 2027;(vi) sixth unit is due in May, 2027. Jointly, they will produce around 12 billion KW of electricity and failure to evacuate the power would result in a loss of roughly Rs 120 billion per year.
The project is being financed through a World Bank loan of over $ 700 million which will have to be serviced, increasing over all loss of the project. If the project is delayed, the repayment shall be a huge amount due to continuous depreciation of PKR against USD/ convertible currency. During last 7 months from the financial bid opening, dollar cost was Rs175.5, which has now jumped to over Rs205 – almost 16 per cent loss on this head.
Meanwhile, price escalation would add yet another layer to loss. The NTDC is now considering re-tendering the project. In case of re-tendering, the NTDC may lose another year before it finalizes the process, jeopardizing the timeline of power evacuation and causing massive loss to public exchequer on four heads (revenue & generation loss, commitment charges on loan and markup payments).
Copyright Business Recorder, 2022
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