19 projects: NTDC asked to justify cost overrun of around Rs65bn

27 Dec, 2022

ISLAMABAD: The National Electric Power Regulatory Authority (Nepra) has asked the National Transmission and Dispatch Company (NTDC) to explain whether the cost overrun of around Rs65 billion in 19 projects is justified.

The Nepra has framed the issues for hearing fixed for January 2023 in the matter of investment plan and losses assessment submitted by the NTDC for tariff control period from fiscal year 2022-23 to 2024-25.

The NEPRA has also asked whether the claimed investment of Rs369.222 billion for multi years tariff control period is justified with Rs114.303 billion in fiscal year 2023 followed by Rs145 billion in fiscal year 2024 Rs109 billion in fiscal year 2025 for power evacuation projects, system constraints through rehabilitation and system expansion, SEZs, other conversions, protection and up-gradation.

The province-wise segregation of NTDC investment plan included around Rs165 billion in Punjab, Rs135 billion in KPK, Rs12 billion in Balochistan, Rs24 billion in Sindh and other Rs33 billion.

The regulatory has asked that petitioner must provide the project-wise rationale against requested investment and techno commercial benefits to be achieved through proposed investment in terms of constraints removal, additional energy available for wheeling through megavolt emperes (MVA) additions, reliability and continuity of supply, reduction in transmission losses, etc whether the cost overrun of around Rs65 billion in 19 projects is justified and NTDC to explain the reasons for cost overrun in each project and steps taken to avoid financial loss due to cost overrun to public exchequer; whether the claimed cost of Rs582 million for HR improvement and capacity building is justified. The NTDC is required to provide the region wise allocation of HR cost and future employment plan of staff especially in Hyderabad, Quetta, and Multan to improve performance of NTDC.

Percentage of the total employees 47 per cent in Lahore, 19 per cent in Islamabad, 16 per cent in Hyderabad, 13 per cent in Multan, and five per cent in Quetta.

The regulator has also asked whether the request of NTDC to allow T&T losses provisionally on actual basis until the outcome of the independent consultant study is justified. The NTDC is required to apprise timelines for completion of such studies by third party consultant. In addition whether any regional based assessment of T&T losses has been included in the TORs developed for third party loss assessment studies and whether any regional/provincial network based assessment of constraints including aging of the equipment has been studied, if yes, NTDC is required to submit regional/provincial based constraints removal plan and its techno-commercial benefits.

Whether the request of NTDC to allow, up to a certain determined limit, the 11kV auxiliary consumption as part of its T&T losses keeping in view the fact that 11kV network assets are directly possessed by DISCOs etc.

Copyright Business Recorder, 2022

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