Rs266b HVDC transmission project in hot water

ISLAMABAD: The country’s most strategic project in the power sector -- ±660kV Matiari-Lahore HVDC Transmission Project of $1.66 billion (Rs266 billion)-- having the capacity to evacuate 4,000MW of electricity has landed in hot waters as the state-owned National Transmission and Despatch System (NTDC) and the Chinese company, Pak Matiari-Lahore Transmission Company Pvt Ltd. (PMLTC), have locked horns over the dispute of Certificate of Readiness.

The dispute has put this major flagship project of China-Pakistan Economic Corridor (CPEC), which is scheduled to achieve commercial operations (COD) on 1st of March 2021, seemingly in jeopardy. The issue surfaced when the NTDC refused to declare the Certificate of Readiness (CoR), issued by Independent Engineer (CESI), as valid. This irritated the PMLTC that built the project. The denial came from the NTDC when its grid experienced oscillation during the testing after completion of the project.

The Chinese company says the NTDC has not undertaken the responsibilities and actions as per Transmission Services Agreement and Tariff Determination (TSATD), which has caused inability to perform full load testing. And more importantly, the Chinese company has warned the NTDC of taking legal action under the agreement, with high-level involvement of Chinese government. These alarming disclosures have been mentioned in a letter written by the president and CEO, PMLTC, Zhang Lei, to the Federal Minister for Energy (Power Division), Omar Ayub Khan.

The News tried to contact the NTDC managing director, Engineer Dr Khawaja Riffat Hassan, and sent him a questionnaire to make the story balanced but he opted not to respond. The Chinese contractor PMLTC has taken the stance in its letter written on January 27 to the Federal Minister for Energy, arguing it is normal to have such problems during such testing. “It immediately carried out root cause analysis, which was presented and clearly communicated in written and during the meetings with the NTDC. The causes of that problem do not pertain to the pre-commissioning tests,” said the communication.

The letter also mentioned that after the NTDC grid oscillation, the NTDC and its owner engineer (Hatch), have been determined to declare the Independent Engineer's (CESI) Certificate of Readiness (CoR) as invalid on mistaken grounds, and the PMLTC has to point out that they are not entitled to invalidate the certificate issued by CESI as per the TSA (Transmission Services Agreement). The Chinese company in the letter requested the federal minister to urgently convene a meeting with all stakeholders so that the PMLTC could explain its position clearly.

“Any delay on actions to be completed by the NTDC will cause an irreparable damage to this flagship project of Pak-China cooperation, contractual claims against the NTDC and legal complications, since the NTDC is trying to hold PMLTC responsible for the delay,” warned the letter. It further says, “Up until the end of November 2020, the project has been getting progress as per schedule. The NTDC provided clearance to start testing on November 30, 2020 for commissioning the project”, the letter elaborated.

The Chinese company in its letter said it has tried to its best to resolve the issue, however, the NTDC has not responded in kind. However, the Chinese company has suggested the NTDC to conduct commissioning in phases, which will benefit both parties, saying for the NTDC, the transmission capacity from south to north will be improved significantly and energisation of the transmission line can avoid huge risk of theft of tower materials and conductor and long-term uncharged oil-filled equipment can be prevented from damage, if they are put into operation.