By Naveed Miraj
ISLAMABAD: The Planning Commission of Pakistan (PC) has pointed out serious irregularities in the water supply schemes for Thar Power Project including a mammoth hike in the land-acquisition cost, recording an increase of up to 328 percent, and asked the Sindh government to provide justification for the same.
The cost of Makhi Farash Link Canal Project (Chotiari Phase-II) for water supply to Thar Coal power generation project has been increased by 14.12 percent to Rs 12.111 billion from the original approved cost of Rs 10.612 billion, official documents exclusively available with this scribe reveal. Originally, the completion date of the project was June 2018. However, due to slow progress, the project was delayed till December 2022.
The per acre land cost was increased enormously as compared to the approved PC-I. The authorities concerning the project told the PC that court cases have been filed regarding ‘unjustified’ awards. The documents suggest that awards with higher rates were received, especially from the Land Acquisition Officer, Khipro. PC-I has a limit of Rs. 700,000/acre while awards were framed around Rs. 2,500,000 to Rs. 3,000,000 per acre. The appeals by the land acquiring agency have been filed in the High Court. According to the documents, 87 percent of land has been acquired, and 13 percent of land acquisition remains.
The Planning Commission observes that consultant cost has been increased for both MFLC projects I&II. The initial contract amounting to Rs. 124. 5 million (Component-I) has been increased to Rs. 259.42 million with an increase of Rs. 134.92 million which is 91 percent higher than the initial consultancy cost. For component-II of the project, the consultancy agreement was sanctioned Rs. 51.85 million, however it will be concluded at a cost of Rs. 136 million with an additional cost of Rs. 84.146 million or 61 percent higher than the approved cost.
The membrane technology used during the construction of the carrier water channel was a novel idea and it is apprehended that the executing agency may not have the capacity to carry out O&M works. The water carrier channel was designed on a capacity of 200 cusec while only 20-35 cusec water has been provided for ponding at Nabisar. The reason behind the same was slow progress on power generation. The water carrier channel was built on a priority basis to save the government of Sindh from liquidation damages in millions of dollars likely to be imposed by the international companies working on power generation, the Planning Commission observed further. It is worth mentioning that a small amount of water is being used since September 2021 while the Sindh Irrigation Department has to bear maintenance charges on a regular basis.
The project 21 contracts have been awarded at a cost of Rs. 8,794 million against the approved PC-I cost of Rs. 7,708.04 million. Whereas, the revised cost of civil works components in the proposed amended PC-I is Rs. 9,425 million, 22 percent above the approved PC-I cost which is on a higher side. “Therefore, it is considered as a significant change in scope and prior approval of the competent forum should have been sought before execution,” observed the Planning Commission.
The Project Monitoring Report observed that the incurrence of unauthorized expenditure is a case of ex-post-facto approval. “The project authorities may furnish contract agreements and work done by the consultant to this office for further analysis to justify the enormous increase in consultancy charges. They may also provide justification for the increase in consultancy cost I) Design, II) Drawing, III) supervision and, IV) Quality Control along with percentage % increase. The consultancy charges may not change without change in scope and further payments may be made conditional with the plausibility of the justification for the increase and approval of Secretary Irrigation,” the report recommended.
Contractors’ performance is questionable: Planning Commission
The Planning Commission further observed that the performance of the contractors is questionable. The executing agency may share the mechanism adopted for scrutiny of the contractors in terms of their past work experience and capacity regarding water carrier channel in membrane technology etc.
The issue of premium and escalation may be carefully examined and no premium or escalation may be paid without the approval of Secretary Irrigation. Sindh Irrigation Department may start negotiations regarding maintenance charges which may be borne by the Thar Coal Power Project on cost-sharing basis. The executing agency may submit PC-IV of the project right after completion of the project to get the insight into the benefits obtained from new technology used in Thar Coal water carrier channel instead of CC lining. Due cognizance be ensured before approval of revised/amended PC-I which is aimed at regularization of the unauthorized change in scope and incurrence of unauthorized expenditure (ex-post-facto), observed the Planning Commission further.
The Technical Section of the Planning Commission views that the increase in cost due to a change in scope may be borne by the province from its own resources as per NEC decision dated 7 June 2021. Due to non-availability of the land, water courses are yet to be completed. The province may bear an increase in cost for vegetation growth removal in completed water courses.
Planning Commission further maintained that its guidelines dated 8 July 2021 state that “EIA is a mandatory part of PC-I and therefore, PC-Is without having EIA Report shall be returned to the sponsors without any processing/appraisal. It said PC-I is not supported with EIA Report and sponsors have overlooked this guideline. “Therefore, PC-I may be returned.”
It has been observed that certain unapproved work/ changed scope has been materialized without prior approval. Justification may be provided to the CDWP. The PC also sought a realistic time of completion mentioned in the PC-I.
Consultancy cost for component-I has been increased from Rs. 124.5 million to Rs. 259.429 million and for component-II from Rs. 51.85 million to 136.0 million which is more than double. The Planning Commission has sought justification for a ‘huge’ increase against the 1.5 years extension. It also sought justification for the increase in O&M cost from Rs. 31.12 million to Rs. 124.480 million.
Thar Power Project Background
The “Makhi Farash Link Canal (Chotiari Phase-II) for Water Supply to Thar Coal” project was prepared to carry 200 cusecs of raw canal water from the Lower Nara System at Farash Regulator via Dhoro Escape at Nabisar Thar for Electricity Generation and agro-industrial growth. The corrected PC-I for “Construction Makhi Farash Link Canal Project (Chotiari Phase-II) for Water Supply to Thar Coal” was approved by the ECNEC on 4 September 2015 at the cost of Rs. 10,612.40 million on 50-50 cost-sharing by the federal government and Sindh government.
The Original PC-I was prepared based on the conceptualized scope of work and reconnaissance survey. Hence, in the above approved PC-I, the specific provision of 2 percent of total cost for the “Basic Design & Methodology” was made. The Project activity was started with the engagement of the consultants in accordance with the SPPRA Rules. The successful consulting firms consortium between the Associated Engineering Consultants (ACE), Pvt. Ltd and BMCE (JV) was awarded the work of basic survey, design, and devising methodology of the works as required for the successful implementation of the project to complement the objective of the scheme. The Project is being carried out in 18 packages.
