Officials have blamed the last PPP-led government for inordinate delay in the 425 MW combined cycle power plant in Nandipur, claimed stepped up work during the current regime, and hoped completion of the project prior to the stipulated period.

Total gross capacity of the project is 425 MW on furnace oil and 525 MW on gas (conversion). The Economic Coordination Committee had approved the project December 27, 2007 and it was to be completed in 2011. However, the project was delayed and now would complete in December. The letter of credit was established on September 15 and work on the project started on October 16, 2008.

It was a joint project of China and Pakistan on which foreign loan was available till August 31, 2011 but then PPP government somehow withheld the project consignments at Karachi Port in April 2010 on which a legal opinion was issued on October 19, 2011. As a result, the contractor terminated the contract via a notice dated 17-08-2012.

On public and political pressure, a revised PC-I was submitted for approval to the Planning Commission by MoW&P on January 16. It was approved by the ECC on  June 27 and by the ECNC on  July 42, 013, and the suspended work resumed by 21st of October 2013. It was one of the most important projects for the Pakistanis as the nation has been facing the worst loadshedding but astonishingly the payments to the contractor remained suspended during April 2010 to July 2013.

According to the Institute of Public Policy, the amount the government paid in lieu of PAD markup/interest to banks on the stopped plant at Karachi equals Rs8,000 million. Similarly, the payment made against demurrage and stoppage of containers on Karachi Ports is Rs715 million whereas the overhead charges against salaries and office expense is Rs150 million. However, Remobilisation cost to EPC contractor is Rs800 million and inspection, testing, repairing and replacement of the defected pieces’ cost is Rs5,000 million.

An additional cost paid on the account of EoT claims/escalation is Rs1,900 million and the government paid Rs164,500 million as losses.

According to Nandipur Power Plant Managing Director Muhammad Mehmood, “We have met bigger challenges than our capacity in the last seven months thanks to the political will of the country’s leadership. The government also met financial close of Rs37.55 billion in just 55 days. Then we brought 5,000 items stranded at the Karachi ports on the site in two months.”

He added, “We, along with our Chinese experts, worked round the clock, and faced bad weather and mosquito. We mobilised almost 1,200 personnel and arranged extra shifts to expedite work. “We laid 1,200 tonnes of pipe and did cabling, termination and cable tray installation on an area not less than 800 km. The first turbine of the project became functional on May 26, 2014 and now it is adding 100 MW to the national grid.”

According to another official, “We have saved 157.58 million dollars in lieu of the cost of inspection, testing, repair, replacement, extension of time escalation, insurance, inspection, mandatory spare parts, gas conversion, fuel additive and repair or replacement during the contract negotiations with the EPC contractor.”

He added, “We saved Rs4,376 million during credit negotiations with syndicate of local banks and over Rs2,568 million was saved in the performance of actual work. As the project is going to be completed seven months prior to its estimated time, it will save Pakistan’s 501.42 million dollars per day in 183 days.” He hoped that the project would complete by November 2014 against its revised completion date of June 21, 2015.

Mr Zhang Gourong, the vice president of Dongfang Electric Corporation, said that his company was one of the leading companies under the administration of Chinese central government. “We are worldwide known for manufacturing power plant equipment,” he concluded.