These packages are a standing testament to inefficiency, negligence and corruption. The remaining equipment, which consists of more than 4,500 packages of plant and machinery have since been lying in the open at Karachi port for over a year, at a demurrage cost of Rs700 million. As a result, the lenders stopped their funding, the equipment was not cleared at the port, and the project came to a grinding halt. Instead, the ministry chose to sit on the matter for over a year, despite the urgency of Pakistan’s power requirements.
This activity took place in anticipation of the ministry of law and justice approving the financial agreements and the sovereign guarantee issued by the Ministry of Finance - a routine process in such projects, normally taken as a matter of course.īizarrely, this was not the case here. By mid-2010 much of the work at this plant was complete, the turbines were in place and it looked like the project would be finished on schedule in early 2011. The ministry of finance issued a sovereign guarantee for this project, on the basis of which Dong Fang put together a consortium of lenders who established a Letter of Credit for the import of the equipment. In January 2008, Pepco signed a $329 million contract with Dong Fang Electric of China and paid it a 10 per cent down payment. Unfortunately, inaction by the federal government has delayed its completion by more than two years. In February of this year, a new PEPCO power plant was due to become operational at Nandipur which would have supplied 450 MW of much-needed electricity to industry, agriculture and households.
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