Expansion of Korangi Power Station: ‘Jatoi wants to award contract without bidding’
By Khalid Mustafa
ISLAMABAD: Federal Minister for Water and Power Liaquat Ali Jatoi and his ministry are poles apart over the $240 million extension of the Korangi Thermal Power Station in Karachi. Economic Affairs Division (EAD) sources told Daily Times that the minister and his Secretary Ashfaq Mehmood are deadlocked over the awarding of the development contract.
Mehmood has recommend that this project be awarded through International Competitive Bidding under government policy and the government should award it to the lowest bidder. But Jatoi, who recently visited Japan and Hong Kong as part of Prime Minister’s entourage, is adamant on awarding the project to Marubini of Japan, General Electric Company.
During the Prime Minister’s recent visit to Japan, the Japanese government had agreed to restore the Official Development Assistance (Yen) loan of $420 million to Pakistan for the current fiscal year. The Ministry of Water and Power had asked the EAD to negotiate with the Japanese government, but sources the said that Marubini had agreed to facilitate the loan negotiations if it was given an ‘incentive’, even though it had no direct link with the awarding of the loan itself. The company was interested in acquiring the Korangi project without having to bid for it, sources said.
Sources revealed that Jaoti was insisting that the project be allocated to the Japanese company for ‘reasons only known to him’.
The official said that in view of the increasing electricity demand in Karachi, the government had decided to upgrade the Korangi Thermal Power Station, which had the present capacity of generating 216 MW. According to a feasibility study, two more 350 MW thermal plants could be installed at Korangi. However, the government wanted to install a thermal generation plant of 350 MW at the cost of $240 million during the first phase of the project. When asked about the second thermal plant, he said that the government planned to install a 240-MW second-hand thermal power unit which was to be obtained from the United Arab Emirates free of cost would be installed.