Golen Gol – another mega project left incomplete

ISLAMABAD, July 23: In the absence of any accountability mechanism to fix those who cause delays in projects of national importance, the Rs10 billion worth 106 MW Golen Gol Hydro Power Project in Chitral initiated in 2002, which was to be completed in 2006, still remains a far cry. golen golAfter wasting a huge amount from the public kitty, the project is now being considered problematic but without identifying those responsible for a delay in its execution on account of inefficiency and corruption. The Planning Commission, in its recent letter to the Ministry of Water and Power has said the management of the project by Wapda appears to be very casual, causing huge losses to the national exchequer by not completing it within the approved time and cost besides also failing to utilise the foreign loans within the committed time. Although, the government is showing a keen interest in looking into the delays in the case of the Nandipur Project, no such probe has been ordered as yet in the case of Golen Gol hydro project, which at the present pace of work could be completed by June 2015. The project is located 25 kms from Chitral town. The Planning Commission, in its June 18 communication, had informed the Water and Power Ministry of the facts about the project. It said that at the time of approval of the project in September 2002, it was expected that the project would be completed by November 2006. Due to a delay of nearly four years (2006) in arranging finances for the FEC component, a further delay of nearly three years (2009) in finalising the financial arrangement and then nearly two years (2011) delay in awarding contract for the main civil works have affected the progress of the project. “At the present pace of work, it can be expected that the project would be completed by June 2015. As such the project has already suffered time overrun of nearly 10 years with substantial increase in the project cost,” the PC said. The Planning Commission also noted that the PC-1 of the project approved by Ecnec in September 2002 had been based on cost estimates of August 2001 (i.e US$1=Rs64); as such these estimates became outdated at the time of arranging finance for the project in 2008. Wapda, at that time, the commission lamented, instead of submitting a revised PC-1 for approval of competent authority, proceeded with award of contracts for Main Civil Work (Lot 2) at the cost of Rs7.5 billion, civil work of power house & switchyard (Lot 3-1) Rs1.9 billion and O&M Colony (Lot 1) Rs149.7 million; total contract being Rs9.5 billion (which is 36% over and above the approved project cost) without any approval from the competent project approving authority. The commission also noted that even after the loan agreement was signed in 2008 and finances were made available, Wapda still failed to award contracts for E&M Works (Lot 3-2) and Transmission Line (Lot 4). It added that the against the financial arrangement of US$40 million for Main Civil Works (Lot 2) from Saudi Arabia, US$37 million for Civil Works of Power House, Switchyard and E&M Works (Lot 3-1 & Lot 3-2) and Rs30 million for transmission line (Lot 4) from OPEC Fund, Wapda has proceeded with award contracts for Lot 2 and Lot 3-1 over and above the financial arrangements available. Against the loan arrangement of US$107 million from international financial institutions, the executing agency has utilised only US$20 million to date, while the closing date of loans from the Kuwait Development Fund and OPEC Fund has already expired whereas the closing date of loan from the Saudi Development Fund is December 31, 2013. The Planning Commission said the project could be considered a problematic project and thus recommended the constitution of a high-level committee by the Ministry of Water and Power to resolve the issues concerning the project but did not seek any disciplinary or criminal proceeding against those responsible for this delay and cost escalation of the project. The commission merely suggested: “The role of Wapda may be reviewed, as management of project by Wapda appears to be very casual, causing huge losses to national exchequer by not completing energy projects within approved time and cost, but also not utilising foreign loans within committed time.” It also sought from Wapda to submit the revised PC-1 based on the current cost estimate and financial arrangements made with the IFIs for approval of competent authority besides asking the executing agency to expedite the process of tendering and awarding contracts for E&M work and transmission line.–The News]]>

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