Pakistan - Nandipur Saga Continues

The federal government has said that the Auditor General of Pakistan (AGP) has given it a clean chit on the Nandipur power project, saying that his audit report states there is no cost overrun or misappropriation in the project’s financial affairs.

Does this mean that the Nandipur plant is a success and we will see load shedding decrease? If everything is going well and within budget, why did the plant work for four days and then shut down? And if the whole point is to be transparent, why not get the financial and technical audit from an independent body, like the Asian Development Bank? Why use the government’s own organisations? The whole controversy only throws up more questions, and with the past record of the government over its energy policy, it is hard to trust the government when it says the project is financially sound.

The minister said the auditor general in his report recommended shifting of the power plant to the LNG. Exactly what the PML-N needed- a place to put its very expensively imported LNG to use, with a tick mark by an “independent” auditing body. Minister for Water and Power Khawaja Muhammad Asif has said that Sui Northern Gas Pipelines will lay down the pipeline for the purpose, and this will also enhance the capacity of the power plant to 500 megawatts. The LNG, mind you, won’t be our own, but imported. Imported LNG is expensive, and it has its own problems with regards to transport and payments. But projects like Nandipur don’t give us a choice. To make it run we have to import gas and the government has very conveniently locked us in a cycle of expensive energy generation that has been failing since the 1990s.

The whole calculation of the cost is baffling. The AGP also noted that the final cost of the project was within the approved limits of Rs58 billion.

It did not report, however, that a revised cost estimate of Rs 65 billion was submitted to the National Electric Power Regulatory Authority (Nepra) early last month for inclusion in tariff setting. What was that about?

The project speaks for itself. Billions have been spent with no real payoffs for the consumers, and they will continue to be spent. It is appalling that even a Rs58 billion project is not a sure-shot success. It is as if the government took a gamble, and success of failure, nobody can predict the outcome and no body will be held accountable. This is not how investments are done, or how energy policy should be made.