Projects delay, cost overrun alarm Senate panel

ISLAMABAD: The Senate Standing Committee on Economic Affairs Division (EAD) on Friday expressed concern over how foreign-funded projects were overrun in cost and time, causing heavy losses to the national exchequer in shape of millions of dollar repayments in commitment charges to international lenders.

In its meeting, the Senate panel inquired about Jamshoro project funded by the Asian Development Bank (ADB) but the Genco Holding Company acting CEO failed to give any satisfactory reply.

The committee members asked the EAD and Power Division to fix responsibility on the consultant, hired contractors and officials whose negligence caused heavy losses to the national exchequer. The meetinAg continued for around three hours and at one point the panel chairman alleged that there was not a single individual belonging to opposition parties in interior Sindh who was getting assistance from the BISP.

Senator Saifullah Abro chaired the Senate Standing Committee on Economic Affairs where the panel deliberated on all the ongoing and completed projects regarding the Power Division under multilateralA and bilateral partners -- details of the tendering process, consultants, and the interest paid by the federal government on the projects.

Officials informed the committee that a total of 16 projects were going on under multilateral development partners, of which eight were with the ADB, seven with the World Bank, and one with the Islamic Development Bank and OPEC Fund. The total commitment for the projects was $4.351 billion. Additionally, 16 projects have been completed with bilateral development partners. Among these, six were with Japan, four with Korea, one with Germany and five with France. The total commitment for the bilateral development projects was $629.07 million.

While discussing Jamshoro Power Generation Project (1,320MW) financed by the ADB, the officials apprised that the government had decided to abandon the funding for Lot-II of the project.

Senator Kamran Murtaza inquired when the government decided to abandon Lot-II of the Jamshoro power plant. Senator Saifullah Abro stated that the project had been delayed by five years, and had cost a fortune. Abro also asked about the mode of payment made to the contractor. The committee asked the EAD and its department concerned to provide it the details along with ToRs.

The officials further apprised that Lot-I of the plant would be completed by December 20, 2024, adding that the burden of the delay lied with the contractor. The committee was of the view that there should be a mechanism in place to identify the reasons for the delay and fix responsibility accordingly. It recommended the Power Division to take action against the persons responsible for delay in the project along with penalties to be imposed, and submit details. The MPs panel also recommended the Power Division to appoint a permanent Genco CEO in order to avoid further delays in completion of the project.

After the detailed deliberations, the committee unanimously decided to defer the agenda item with a recommendation to the EAD.

The forum also discussed all the ongoing projects by the Sindh government under multilateral, bilateral partners and UN agencies. The officials apprised that a total of 30 projects were going on of which 14 were with the World Bank, six with the ADB, three with the Islamic Development Bank and OPEC Fund, three with Japan, and one project each with the AIIB, the European Union and USAID. The total commitment for these projects was $5.043 billion.

While discussing the Sindh Solar Energy Project, which is funded by the World Bank, the officials stated that the project aimed to transform government buildings into solar energy and distribute two million solar units among poor families.

The committee raised concerns about the criteria followed for the selection of individuals and recommended that a fair criterion should be followed for this process. It also recommended the Sindh government officials to provide it the information related to the criteria followed for the selection of individuals. It further recommended to provide it district-wise data. The committee recommended that Sindh rural areas need to be given priority in the project.

The panel decided to review all ongoing and completed projects (sector-wise) by the Sindh government under multilateral, bilateral partners and UN agencies in its next meeting. In attendance were senators Kamran Murtaza, Haji Hidayatullah Khan, Falak Naz, EAD Special Secretary Humair Karim, Additional Secretary Alam Zeb Khan, Nespak Managing Director Zargham Eshaq Khan and other senior officials concerned.