The government’s indecisiveness on the multi-million dollar Advanced Metering Infrastructure (AMI) project has put the investment from Korea Telecom Limited and Kaifa Consortium in jeopardy as top mandarins at the Power Division (PD) and Planning Commission (PC) have so far failed to take a decision about the fate of the project.
“The project that was meant to reduce electricity theft and improve recovery through accurate billing, keeping in view the real time data, is being treated between the two ministries like a ping pong ball,” a senior official at the Energy Ministry told The News. “The pilot project was the first to be installed in the LESCO (Lahore Electric Supply Company) and IESCO (Electric Supply Company).
“Special Assistant to Prime Minister Tabish Gauhar in Power Division wants to change the scope of the project, but the Manila-based Asian Development Bank has told the government that it will not extend the committed loan of $400 million in case the scope of the project gets changed. The Bank is of the view that ECNEC approved the project with the existing scope in 2016 for which it had committed the loan of $400 million.”
The SAPM wants the change in the scope of the project and its execution under the CPEC umbrella. The country has the last chance to utilize an ADB loan of $400 million if the project is approved by CCoE with existing scope otherwise the government is to be left with no option but to give to the ADB the penalty or commitment charges of over $2.2 million.
The Power Division’s top mandarins want to implement the project with the existing scope to avert the huge amount of penalty of $2.2 million.
Some months ago, Tabish Gauhar had told The News: “Yes, the country has been paying commitment charges for many years as the $400 loan has not been utilized.” He said that the project was faulty by design. Under the earlier scope of the project, AMI was to be installed at LESCO and IESCO where transmission and distribution losses were the lowest which are still in the range of 8 percent as both the Discos have been efficient companies. “The AMI should have been installed in the loss making companies such as HESCO, SEPCO, PESCO and MEPCO.”
Gauhar had said the government would not abandon the project, and it wanted to increase its scope. The government wanted to install AMI first at loss-making Discos, and then extending it to the remaining Discos.
Sometime back, Tabish Gauhar had told The News: “Yes, the country has been paying commitment charges for many years as the $400 loan has not been utilized.” He said that the project was faulty by design. Under the earlier scope of the project, AMI was to be installed at Lesco and Iesco where transmission and distribution losses were the lowest which are still in the range of 8 percent as both the Discos have been efficient companies. “The AMI should have been installed in the loss making companies such as Hesco, Sepco, Pesco and Mepco.”
Gauhar had said the government would not abandon the project, and it wanted to increase its scope. The government wanted to install AMI first at loss-making Discos, and then extending it to the remaining Discos.
The official said that the SAPM opposes the project with the existing scope, knowing the fact that ECNEC in 2016 had approved the AMI project.
The official said that it is very difficult to include this project in the CPEC list and get the required financial assistance and argued that the opposition by the SAPM will cause more delay in the AMI project and in that case, the government will have to pay 2.2 million dollars as penalty for not utilising the ADB loan.
The Power Division earlier sent a position paper to the Planning Commission to get a decision about the way forward from the ECNEC (Executive Committee of National Economic Council) seeking approval of change in the scope of the AMI project. In the position paper, the Power Division mentioned that the ADB has refused to extend the loan of $400 million in case the scope is changed and the government will have to arrange from other sources refinancing for the project that is to be initiated with the change in scope.
The Power Division’s high-ups actually wanted to get the ECNEC ownership about change in the scope of the project to avoid the wrath of NAB — the anti-graft body of the country. The same body of ECNEC had earlier approved some five years back the AMI project with the existing scope and it is the forum which can change the scope.
Interestingly, the Member Energy in Planning Commission, the official said, instead of taking up the position paper sent by the Power Division in the ECNEC, has sent it back to the Power Division with the recommendation to put up the summary on the project in the CCOE meeting for approval of the way forward.
The sources privy to the development said that the project is being treated between the Power Division and Planning Commission like a ping pong ball and the Korean company that won the tender for implementation of AMI project, has so far accepted as many as eight requests from IESCO asking for extensions in the validity of the bid.
Now the IESCO will have to seek the 9th extension from the Koran company which may not give nod to the request from IESCO this time.
