LAHORE: The National Accountability Bureau is investigating the 425MW Nandipur power project and will follow its own procedures to take the matter to its logical conclusion, irrespective of investigations to be carried out by any other institution, NAB sources told The Nation. The sources said that once the investigations are completed, the NAB, if necessary, will prosecute the accused. Then, they said, it is for the court to take any action against the culprits.

The government is under fire following reports that the cost of this project has gone to Rs 84 billion, although the original estimates said it would be completed with Rs 24 billion. Also, the opposition parties are assailing the government for its failure to keep the project functional despite the fact that the prime minister had inaugurated it in May last year. The plant produced power for a short while and has been out of operation for the past many months. A number of factors are said to be responsible for the failure of the project.

The NAB has been looking into the matter in the light of a Supreme Court order. But the government has offered to have the matter “audited”, an offer unacceptable to the opposition parties. PPP senior leader Senator Aitzaz Ahsan, who is also opposition leader in the Senate, called for a criminal trial and an investigation by the National Accountability Bureau (NAB) of alleged corruption and irregularities in the Nandipur power project. “This project is not a technical matter but a matter of corruption. There is no way to escape it,” he said while speaking in the Upper House of parliament a few days ago. 

Some other leaders proposed that a parliamentary committee should look into the matter. The proposals raised a question: Which institution’s findings will have primacy in case they are different from those of the NAB? And what will be the status of the NAB’s findings, which is the relevant institution for such matters? The NAB sources said that the Bureau will deal with the matter, even if any other institution is entrusted with the investigation. If necessary, the accused will be prosecuted according to the procedure given in the relevant law.

They said the government could get the matter investigated by any other institution, even multiple investigations can be ordered. But, the sources said, the inquiry report of the NAB would prevail. The findings of other investigators could be used by the accused for their defence if they were favourable to them. The Nation also approached various experts to know how much increase in the cost of a project can be expected if it gets delayed for any reason. They were also asked if it was possible for the cost to treble in a few years.

The experts said professional incompetence and political interference were the major factors responsible for the delay in the completion of the projects. However, most important reason for the cost escalation has been operational, political, administrative mismanagement – and even corruption. “Nandipur, Neelum-Jhelum and Quaid-e-Azam Solar Power Park are classical examples of government’s haste, ineptness, lack of professionalism, said a former PEPCO managing director.

The ex-MD, who did not want to be named, said the cost of the Nandipur project escalated sharply, as it took seven years to start limited generation. The initial contract cost was around Rs23 billion, which shot up to Rs58 billion when the present government renegotiated it. A new controversy surfaced when NEPRA declared the cost to have skyrocketed to Rs84 billion. When inaugurated, the project did not have a furnace oil treatment plant (FOTP) and the one arranged subsequently did not have the required capacity. As for the Neelum-Jhelum project, he said 70 per cent work on it was completed in 2010. “Only 5 per cent work could be done during the subsequent two and a half years, as no funds were provided for this project,” the former PEPCO MD said.

Total cost of the project jumped to Rs418 billion from the earlier estimated cost of Rs82 billion. The delay in the construction, he said, was the major factor behind the cost escalation. Rejecting the assertion that corruption was responsible for the cost escalation, he said that in 2012 the total revised cost of the project was estimated at Rs274b but due to delay in completion, depreciation in rupee value, imposition of taxes and duties on the import of machinery, and the purchase of latest boring machine have increased the project cost.

The project was originally estimated to cost Rs130 billion in 2007, which went up to Rs275 billion in 2012, partly because of changes in specifications necessitated by geographical changes after the devastating earthquake of 2005. Soon after taking over as prime minister for a third time as a result of the 2013 elections, Mian Nawaz Sharif ordered that the project be completed by December 2015. But then due to funds shortage the deadline was first extended to December 2016 and then to the first quarter of 2017.

Former finance minister Dr Salman Shah, however, has a totally different point of view. He said the jump in the cost of power or other projects is 90 per cent due to corruption and 10 pc owing to mismanagement. “These projects are fixed and their cost should never be enhanced, as all expenses are calculated when contract is offered. Time period, rupee depreciation, inflation, markup rate and all other factors are also included in the contract. When a new government takes charge, they deliberately slow down the project to make money, Dr Shah said.

As for the cost of Nandipur Power Project, he said, it could not be increased beyond four or five percent, as the whole machinery was old. Institution of Engineers Pakistan (IEP) Chairman Engr Khalid Sajjad says it was surprising that the cost of the Neelum-Jhelum hydropower project has increased from Rs130 billion in 2007 to Rs418 billion now. In his opinion there is no assurance that the cost will not go up further. According to him, the government has no funds for the Neelum-Jhelum project. Although a Chinese bank is ready to lend money and some Middle Eastern lenders may also arrange finances, the absence of a sovereign guarantee appears to be the main issue, he said. Instead of completing those projects that are already in the pipeline the government is more interested in initiating new ones just for their personal interests, said Engr Khalid Sajjad, who is also a former WAPDA chief engineer.