NTDC’s split into new entities: World Bank seeks amendments to project agreements

ISLAMABAD: The World Bank has called for amendments to existing project agreements to replace the name of the National Transmission and Despatch Company (NTDC) with the three newly-created successor entities.

In a letter addressed to the Secretary of the Economic Affairs Division (EAD), the World Bank’s Operations Manager for Pakistan, Gailius J. Draugelis, rated the overall implementation progress of the National Transmission Modernization I Project as “Moderately Satisfactory.”

A Bank implementation support mission visited Pakistan from June 16 to 26, 2025, to review the project’s status. According to the Bank, most components—excluding the Islamabad West Substation (IWS)—are progressing well and are expected to be completed by the end of 2025.

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The IWS contract, a critical part of the project, is now slated for completion in November 2026. Total disbursements under the project stood at $183 million as of June 30, 2025, with improvement needed in FY26.

Progress toward achieving the Project Development Objective (PDO) also remains “Moderately Satisfactory.” The mission outlined several key findings and actions requiring close attention from the Ministry of Energy (Power Division) and NTDC’s senior management.

The World Bank noted that NTDC was recently restructured into three entities: Independent System Market Operator, the National Grid Company of Pakistan, and the Energy Infrastructure and Development Management Company. As legal agreements are currently signed with NTDC, the government—via the EAD—must formally notify the Bank and request amendments to the legal documentation to reflect this change.

The IWS contract was the last major component to be awarded. To accommodate its completion, the project’s closing date has been extended to December 31, 2026, aligning with the contractor’s 30-month schedule. During the mission, the Bank emphasized that NTDC and the contractor must ensure completion and handover by the revised deadline. Given the project is in its eighth year of implementation, securing another extension beyond 2026 is considered highly unlikely.

The Bank clarified that the deadline extension applies solely to the IWS contract. All other sub-projects were already in advanced stages and expected to be completed during FY2024–25. However, several activities are progressing more slowly than anticipated. The mission and NTDC agreed that all other contracts must be completed by December 31, 2025.

To support timely implementation, the Bank emphasized the importance of regular coordination among contractors, consultants, NTDC field teams, and the Project Management Unit (PMU). These interactions would help identify and resolve issues, including contract amendments for time extensions and scope changes.

Notably, such interactions have been limited to Bank missions. The PMU has now agreed to hold monthly review meetings starting July 15, 2025, and will maintain full staffing until project closure.

Regarding contract change order management, the Bank acknowledged that NTDC has resolved the issue of contractors operating without valid agreements. However, some recently extended contracts are again nearing expiry before work is completed. A similar issue is affecting five contracts under the Enterprise Resource Planning (ERP) component.

NTDC has assured the Bank that all necessary contract extensions will be finalized by mid-July 2025, and that no further work will be done without valid contracts.

The mission noted steady progress in the ERP system implementation, aimed at modernizing NTDC’s operations. Several modules are scheduled to go live within the next two months, with full rollout expected by December 2025. To ensure successful adoption, the Bank urged NTDC to improve communication with staff regarding system benefits, impacts, and rollout timelines. NTDC has agreed to update employees regularly through emails and other media.

Addressing the right-of-way issue on the 500kV Nowshera transmission line, the Bank stated that construction had been delayed for over a year due to denial of access to tower location No. 23. While NTDC has secured verbal consent from the landowner with help from the district administration, the Bank has advised obtaining written consent and a formal agreement to prevent future disputes. NTDC is also required to finalize all related documentation and payments before resuming construction.

Regarding compensation payments for IWS, NTDC had previously committed to clearing all outstanding payments by May 31, 2025, but some remain pending. These involve small amounts that affected persons are reluctant to collect due to the cost or effort involved. Following government practices, the Bank has advised NTDC to consider alternatives such as mailing cheques or depositing funds with the Deputy Commissioner’s office for disbursement. NTDC has now committed to completing these payments by August 15, 2025.

Finally, the World Bank commended both the Government of Pakistan and NTDC for efforts to resolve security challenges that had disrupted project activities in Balochistan. The mission was informed that the contractor for the Loralai and Sibi substations had received necessary security assurances and resumed construction at the sites on June 23, 2025.

Copyright Business Recorder, 2025