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Chinese firm awarded Rs55bn power project at Gwadar

ISLAMABAD: The Economic Coordination Committee (ECC) of the Cabinet on Thursday allowed award of Rs55 billion worth of 300-megawatt coal power project at Gwadar to a Chinese firm without bidding.

Presided over by Finance Minister Ishaq Dar, the single-point meeting of the ECC was specifically convened to authorise the Private Power and Infrastructure Board to proceed with the award of the project to China Communi­cation Construction Company (CCCC) at Gwadar.

The authorisation was given a special case under rule 5 of the procurement rules that allowed project award in exceptional circumstances. The rule meant that “whenever these (Pakistan Procurement Regulatory Authority) rules are in conflict with an obligation of commitment of the federal government arising out an international treaty or an agreement with state or states or any international financial institutions the provisions of such international treaty or agreement shall prevail to the extent of such conflict”.

Originally, project was of 600MW capacity as part of Gwadar Port development but was reduced to 300MW on the request of the Chinese side under the China-Pakistan Economic Corridor (CPEC) in November 2014.

At a meeting of the Joint Energy Working Group in August, the Chinese government nominated CCCC, a state-owned entity, to invest in the project and Pakistan readily agreed to oblige. The company requested the PPIB in September 2015 for the development of 300MW plant on imported coal using supercritical technology.

The summary to the ECC claimed that in November 2016, Prime Minister Nawaz Sharif on the power ministry’s request desired the ministry and the PPIB to proceed on the earlier application of CCCC for grant of letter of interest/letter of support for the project “after completion of necessary legal formalities as the project was part of CPEC.

Interestingly, the government announced in April 2015 power generation policy. The policy required the project be process under the clause 6.3 of the power policy under designated projects that were covered under bilateral agreements between the GOP and the foreign governments, thus enabling exemption of pre-award process and procedures, including pre-qualification and thereby direct award and further processing of the project.

The ECC approved the proposal put forth by the power ministry for authorising the PPIB to proceed with the awarding of the project to the CCCC under rule 5 of the Public Procurement Rules 2004.

Published in Dawn, March 31st, 2017

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