Secretary Water and Power, Younus Dagha and a top official of State Grid Corporation of China (SGCC) signed the agreement in Beijing last week.
Finance Division, in its comments on the summary of the Water and Power Ministry stated that it supports the project if it is based under G to G arrangement, however, prima facie there is no G to G arrangement for this project and only a corporate agreement has been signed between two public sector entities of the two countries.
Finance Minister observed that the project also does not contain any reference to CPEC or 3rd Joint Working Group''''s recommendations regarding designated entities by the two sides. Therefore, invoking rule 5 of Public Procurement Rules, 2004 does not seem appropriate. Although the project is stated to be included in the list of the priority projects in pursuance to the decision of the Third Energy Working Group meeting held in China on August 25, 2015.
Finance Ministry maintained that even if the G-G arrangement existed, NTDC / PPIB is required to complete technical and financial evaluation of the sponsors as per policy guidelines. Therefore the proposed project must comply with the policy requirements being undertaken under the upfront tariff modalities which include technical/ financial evaluation of applicants and performance specification of international standards.
Finance Division emphasized that any departure from the policy of Transmission Line Projects, 2015 for a specific project may adversely affect the whole process.
Ministry of Water and Power informed the ECC of the Cabinet that the National Transmission & Dispatch Company Limited (NTDCL) and State Grid Corporation of China (SGCC) entered into a Co-operation Agreement on April 20, 2015. As per the Co-operation Agreement, the Matiari-Lahore HVDC Transmission Project would be implemented under Agreement on China-Pakistan Economic Corridor (CPEC) between China & Pakistan and the Transmission Policy 2015 along with the Guidelines. Under the Co-operation Agreement, SGCC has nominated its subsidiary ie. China Electric Power Equipment & Technology Co. Ltd. (CET) to develop the transmission line projects on BOOT model. It was further informed that the third meeting of Energy Working Group for CPEC was held on August 2015 wherein it was discussed that in order to meet the power transmission demand of a number of power-source projects planned in the energy planning of CPEC, the Matiari-Lahore and Matiari-Faisalabad Transmission Line projects was proposed to be undertaken by State Grid. During the fifth Joint Co-operation Committee meeting on CPEC, held on 11 November 2015, it was inter-alia agreed to encourage State Grid negotiating with Ministry of Water and Power and NTDCL and apply for tariff to NEPRA as soon as possible. These transmission projects had also been included in the Revised List of Prioritised Projects. PPIB being one window facilitator and a co-ordination agency on behalf of government departments under Transmission Line Policy 2015 and PPIB Act 2012, filed tariff petition to NEPRA on the basis of information/documentation provided by NTDCL and CET on 8th February 2016 for the Project and NEPRA determined reference Tariff for the Project on 18th August 2016. However, CET had requested PPIB to file Motion for Leave for Review, as the tariff and cost allowed by the Authority were unacceptable to CET. Subsequently, PPIB filed Motion for Leave for Review to NEPRA on 2nd September 2016 upon which NEPRA has given its decision on 24th November, 2016. Now SGCC/CET was required to apply for registration with PPIB.
Ministry of Water and Power further informed that the Transmission Line Policy 2015 provides two modes for processing of private transmission projects: (i) International Competitive Bidding mode, and (ii) Upfront Tariff mode. However, NEPRA had determined a project specific Tariff and specified that tariff will be applicable to the qualified Independent Transmission Company as declared by PPIB. Further, NEPRA had directed that upon issuance of LOVLOS to the relevant Special Purpose Transmission Company (SPTC) by the relevant agency, SPTC shall be required to approach NEPRA for the grant of Special Purpose Transmission License along with a request for the approval of tariff as per relevant provisions of NEPRA Act, Rules & Regulations.
Ministry of Water apprised the meeting that since the project falls under government-to-government projects category whereas there was no provision under the Transmission Line Policy 2015 for processing of such projects. However, Public Procurement Regulatory Authority (PPRA)''''s Rule 5 states that "whenever these rules are in conflict with an obligation or commitment of the Federal Government arising out of an international treaty or an agreement with State or States or any international financial institution the provisions of such international treaty or agreement shall prevail to the extent of such conflict." Further, as per Public Procurement Regulations dated 18thJuly 2011, if rule-S of PPRA was to be invoked in case of international I inter-governmental commitments, the matter after due consultations be referred to the ECC.
Ministry of Water and Power submitted following proposals for the approval of the ECC of the Cabinet.
Authorising the Ministry of Water and Power PPIB to proceed in terms of Rule 5 of Public Procurement Rules 2004 to process 660 kV (4000 MW) HVDC Matiari-Lahore Transmission Line Project (along with Grid, Converter Stations & Grounding (Electrode Stations at both ends) to State Grid Corporation of China (SGCC)/China Electric Power Equipment & Technology Co. Ltd (CET) subject to their unconditional acceptance of NEPRA''''s approved Tariff for the Project and fulfilment of other applicable provisions of Transmission Line Policy 2015 without evaluation of technical and financial credentials of the Sponsors on the basis of fact that the Project has been conceived and awarded under CPEC; and PPIB to adopt same procedures for further processing of the project as stipulated under upfront tariff mode under provision of Transmission Line Policy 2015.
After detailed discussion, the ECC authorised "the Ministry of Water and Power/ PPIB to proceed in term of the Rule 5 of the Public Procurement Rules 2004 to proceed 600 KV HVDC Matiari-Lahore Transmission Line Project ( along with grid, converter stations and grounding/ electrode stations at both ends) to SGCC/ CET subject to the their unconditional acceptance of Nepra''''s approved tariff for the project and fulfilment of other applicable provisions of Transmission Line Policy 2015 on the basis of fact that the project has been conceived and awarded under CPEC".
Copyright Business Recorder, 2017