Daily Times

ISLAMABAD: In a complaint written to the prime minister (PM), copies of which are available with Daily Times, National Transmission and Despatch Company (NTDC) has been accused of jacking up the cost of putting in place a convertor station and installing High-Voltage Direct Current (HVDC) line from Mittiari to Lahore, a part of the China-Pakistan Economic Corridor (CPEC).

Sources in the PM Secretariat revealed that “the PM and both the ministers for water and power are unaware of this irregularity” and said if the project is inaugurated by any of them, “the entire blame will then lie with whoever cuts the ribbon”. This scribe has learnt that the legal department of NTDC is opposing the project and has raised multiple questions on it with the managing director (MD). Its objections are yet to be clarified by the accused.

The HVDC project, as per the complaint, comprises of a “convertor station” and an 878-kilometer direct current (DC) transmission line, for which an agreement has been signed with a Chinese company, CET, on build–own–operate–transfer (BOOT) basis for 660 kilovolts (KV) Mittiari to Lahore transmission line. The complainant has accused the NTDC top management of having signed the agreement neglecting the official procedure of inviting tenders and selecting the lowest possible bid. The complainant lamented that the agreement was signed without any prior cost analysis.

The complainant has accused NTDC MD Chaudhry Muhammad Arshad, HVDC NTDC Consultant Abdul Razzaq Cheema, GM GSO NTDC Sabz Ali Khan and CE Design NTDC Muhammad Jaffer of having played a role in jacking up the rates of CPEC’s HVDC project. According to the agreement, as per the complaint, the CET will arrange 100% investment for the project and will construct, operate and maintain HVDC project for a period of 25 years, for which NTDC will pay CET on annual basis. The project cost, as per the complaint, is around $2,300 million. The complainant grieves that the rates offered by CET are 25% higher than any European or international standard project of the same nature, volume and size.

The tariff that National Electric Power Regulatory Authority (NEPRA) will pay is based on the jacked-up capital cost of the project, and that CET will receive back 100% capital cost, interest and profits from NTDC over a period of 10 years. For the rest of 15 years, CET will receive payments through tariffs paid by NEPRA. It has been further alleged that NTDC will formulate an illegitimate subsidiary company responsible for bearing the line losses and fines while CET will only reap the profits. The complainant has alleged that the accused kept minister and secretary for water and power unaware of the jacked-up rates and the actual project capital costs.

The complainant further alleged that the NTDC board of directors (BoD) is also unaware that the project cost has been jacked up. The complainant believes that NTDC and the government of Pakistan are being pulled into an exorbitant agreement for a span of 25 years, which is likely to result in making NTDC bankrupt with a massive blow to the national exchequer. The complainant said that internationally, charges are paid according to the quantum of power being delivered, but in this jacked-up agreement, the NTDC will pay billion of rupees for a fixed 4,000 megawatts (MW) to CET “irrespective of actual power being transmitted”.

Consequently, the complainant believes that NTDC will incur losses of billions for a period of 25 years, thereafter to which the NTDC will be left bankrupt. The jacked-up tariff that NEPRA will pay is Rs 1 per Kilowatt Hour (KWH). For the information of the prime minister, the complainant reveals that the losses that the national exchequer will bear for 25 years is because of over-invoiced capital cost, very high NEPRA tariff, fixed payments to CET for 4,000MW capacity, liability of all losses, fines and LDs by NTDC’s illegitimate subsidiary.