The Nandipur scandal

Four years, Rs35 billion and zero MW – that is the story of the much-famed Nandipur Power Project. On May 31, 2014, Prime Minister Nawaz Sharif made a mistake when he inaugurated the project, only for the production level to fall to nil five days later after generating electricity at a record cost of Rs42 per unit. Over a year later, on Thursday, the prime minister admitted his error by taking notice of the Nandipur Power Plant scandal. The project has become another major point of embarrassment and infighting in the PML-N government. On Wednesday, Punjab Chief Minister Shahbaz Sharif made the ‘cold war’ between him and Water and Power Minister Khwaja Asif public by mentioning corruption in the Nandipur project. The original cost of project was expected to be around Rs23 billion with the project expected to add 425MW generation capacity to the national power transmission network. Amongst the major boons claimed were that the project would equal the high efficiency Guddu Power Plant, which would mean that the cost of production would be low. However, questions were raised immediately when the PPP government gave the contract to the Chinese company that had been blacklisted for selling faulty railway locomotives to Pakistan. Moreover, the PML-N government issued a new PC-1 to increase the project cost by an unbelievable Rs22 billion to Rs57 billion.
Is it worth spending Rs57 billion of public money to add 425MW to the national grid? What is more strange is that despite so many questions asked about the project, the Ministry of Water and Power has continued to defend the project publicly. Khwaja Asif on Wednesday once again promised that the plant would be fully functional ‘soon’. How soon is anyone’s guess after many false starts. Khwaja Asif has also promised a full audit of the project which was agreed to in a meeting chaired by the prime minister; the audit is to be completed within two weeks. Apart from that, the water and power minister also made a new claim. Apparently the government has discovered that the fuel treatment plant is of a lower capacity than its power generation capacity so the project can’t be fully functional. Chief Minister Shahbaz Sharif who had issued multiple advertisements calling the project a success has now called for a NAB inquiry into the project while continuing to claim that the requisite machinery has been in Karachi customs for the last three years. The PML-N has a strange aggressive-defensive approach to the project. Some of its members continue to claim massive corruption in the project but have continued to defend the project publicly. The Ministry of Water and Power has now issued a letter to the contractor asking for explanations but the real explanation is needed from the government. Faulty machinery, escalating costs and a number of false starts certainly suggest serious foul play which is unlikely to be determined by the prime minister’s inquiry. The Nandipur Power Project is another example of the spectacular failure of the private power sector to deliver its promises under the current political environment. With the regulator clueless, private producers know it is in their benefit to make as many mistakes as possible. The government will just pay for them. Ultimately, though, it is the people who are paying in the shape of less power and extended periods of loadshedding.