ISLAMABAD: The Government of Pakistan has sought extensions in the completion of the National Transmission Modernization-I project worth $425 million financed by the World Bank, after facing delays in finalizing key procurement and land compensation activities.

The proposed restructuring would be the second restructuring of the project. The project was earlier restructured in October 2023 to add a withdrawal category in the Financing Agreement, allowing capitalization of the Commitment Charges (CC) and the Interest During Construction (IDC).

Official documents of the World Bank revealed that the government of Pakistan has requested an extension of 35 months through a letter to accommodate the completion of all the ongoing contracts and the IWS works whose implementation completion time is 30 months. World Bank management has agreed to process the requested extension in two phases, with an initial extension of 15 months.

World Bank rates implementation progress of NTMP-1 as ‘moderately satisfactory’

The proposed restructuring is to extend the closing date of the IBRD loan by 15 months to April 30, 2025, to allow for the completion of the ongoing contracts. A second extension for the remaining implementation period would be considered based on the progress of the IWS package (signing of the IWS contract) and completion of land compensation payments. The National Transmission Modernization I Project (NTMP-I), approved by the World Bank’s Board of Governors in December 2017, supports the expansion and upgradation of the country’s transmission network (Component A), the deployment of an Enterprise Resource Planning System (ERP) for the National Transmission &Despatch Company (NTDC) (Component B), and provides technical assistance for strengthening NTDC’s planning, operations and maintenance capability, and modernizing NTDC’s key business processes (Component C).

Of the total $425 million approved loan, only $79 million has been disbursed so far.

The restructuring seeks approval to extend the closing date of the project by 15 months, from January 31, 2024, to April 30, 2025. The project development objective is currently rated “moderately satisfactory”, while implementation progress is rated “moderately unsatisfactory” due to delays in finalizing key procurement and land compensation activities. The overall safeguard and the fiduciary ratings are rated as “moderately satisfactory”.

The overall implementation progress has advanced well in the last couple of months with the Islamabad West Substation (IWS) package, the largest package under the project is set to be awarded soon. The disbursements from the project are also improving.

Component A - Expansion and upgradation of the transmission network: NTDC, the implementing agency of the project, is in the process of issuing the Notification of Intention to Award for the IWS package. Payments for the land compensation of the IWS were progressing well but have recently slowed down. Currently, 77 percent of the RAP payments have been completed. Apart from the IWS package, implementation of all the other contracts under component A is making good progress.

Component B – Deployment of ERP: The progress of implementation of the ERP program is satisfactory, particularly the works on data center (including civil works).

Component C – Project management, technical assistance and capacity building: The comprehensive system study on NTDC’s power system, the key study under this component is at the final stage. The NTDC has also developed a detailed capacity building plan which is under review by the bank.

Copyright Business Recorder, 2024

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