AEDB uncertain of execution: ADB funded alternative energy projects

The Alter-native Energy Development Board (AEDB) is uncertain about execution of alternative energy projects at the assessed cost, to be funded by the Asian Development Bank (ADB) under the Renewable Energy Development Sector Investment Program (REDSIP).
Sources told Business Recorder that in Khyber Pakhtunkhawa (KP), three sub-projects--Daral Khwar, Ranolia, and Machai--were to be financed under tranche -1. The one bid received against Daral Khwar proved to be non-responsive, and re-bidding did not take place as, from the financial opening of the other two sub-projects of Ranolia and Machai, it became apparent that the allocated loan amount for Khyber Pakhtunkhawa would not cover all three projects.
The actual bid for Ranolia was $35 million (150 percent over the original cost estimate). The actual bid for Machai stood at $8 million (100 percent over the original estimates).
The cost per megawatt for Ranolia and Machai comes to $2.01 million and $3.08 million respectively. SHYDO is awaiting approval from the government of KP to execute Daral Kahwr from tranche 1, and meet the shortfall of Ranolia and Machai from the allocation of Daral Khwar. In Punjab, five projects--Marala, Deg Outfall, Okara, Pakpattan and Chianwali--were to be financed under tranche-1. The implementing agency has submitted the bid evaluations for Marala and Deg Outfall while the remaining bid evaluations were to be submitted shortly thereafter.
According to revised engineering estimates, the cost for all five HHP is expected to increase considerably as compared to the original estimates of 2005. As a result, the cost per megawatt for the five HHPs is expected to range between $4.3 million and $6.0 million which is quite high considering the prevailing market rates and the actual rate from financial opening of SHYDO projects. In view of shortfall of funds, it was agreed that subject to acceptance of RoR projects will be financed on first-come-first-served basis, and the remaining would be postponed for subsequent tranches.
According to sources, after the concurrence of bids by ADB, the implementing agencies are expected to revise the PC-1, seeking approval by the PDWP, CDWP and Ecnec by June, 2011. However, considering the high rates of construction of the five HHPs in Punjab, it may be appropriate for the Ministry of Water and Power to assess the viability of costs through the specialist department of Wapda and comment on the suitability of financing such projects.
Under the loan 2286/2287 ADB is providing financing to develop indigenous, non-polluting, and renewable sources of energy to help meet Pakistan's power shortage and diversify power sources. It will also improve the quality of the power system, especially in rural areas.