WAPDA team visits China, Korea to woo contractors, financiers

Lahore: A team of technical and financial experts headed by the Member (Water) Mohammad Shoaib Iqbal and the Member (Finance) Anwar-ul-Haq that visited China and Korea to present the Dasu Hydropower Project to the construction companies and financial institutions, today briefed the Authority on the outcome of their visits. The Authority meeting was presided over by Chairman Zafar Mahmood here at WAPDA House.

The meeting was briefed that being run-of-the river project, the 4320-MW Dasu Hydropower Project, has been designed to generate maximum electricity even during the lean water flow period as electricity generation from the project is not dependent upon IRSA’s indent unlike other mega projects such as Tarbela, Mangla and Ghazi Barotha.

The project is also unique in the sense that it is being executed through an innovative model, which has not been tried earlier in Pakistan. That is why WAPDA is proceeding on the project in a prudent and sure footed manner. Earlier on, the hydropower projects were implemented on the assured financing model in the country. However, for construction of the Stage-I of Dasu Hydropower Project with 2160 MW generation capacity, World Bank is providing a part of funding as direct loan in addition to providing guarantee for raising finances from the commercial market. Besides, WAPDA would also have to contribute more than $1 billion.

The meeting was informed that pre-qualification notice for main works of Dasu Hydropower Project was advertised in August 2014. In order to attract contractors and investors for construction of the project, World Bank suggested to WAPDA to hold two international prequalification conferences. The first such conference was organised in Singapore in October 2014. To broaden the scope of competition and approach contractors and financiers for quality construction with economical cost, the WAPDA team visited Turkey in December 2014. The visit proved fruitful as more contractors purchased prequalification documents. Keeping in view the response of the contractors and investors in Turkey, WAPDA extended the date for submission of prequalification applications till April 28, 2015 in consultation with World Bank. The second prequalification conference was held in Dubai in January 2015. The outcome of the conference was quite encouraging.

The conference inculcated confidence in WAPDA that it should explore more options for award of the contract and arrangement of funds for the project. Consequently, WAPDA team of technical and financial experts visited China and Korea this week. During the visits, misconceptions of the contractors and financial institutions were allayed. They were informed that arrangement of financial resources is primarily the responsibility of WAPDA and it is actively involved in the process. However, if any contractor manages to arrange part of the funds for the project, it will be welcome.

The contractors in Korea were also briefed that all bids for Dasu Hydropower Project will be assessed in a fair and transparent manner, and there is no preferential arrangement with any country in this regard. The contractors requested WAPDA to extend the date for submission of prequalification applications, as they needed more time for preparation of their prequalification applications for this mega project. During the visits, financial institutions showed their interest in financing the project through commercial and the state-controlled financial institutions.

WAPDA also conducted road shows and held one-on-one meetings with the local banks in Pakistan as part of efforts to arrange funds for the project. The local banks had also shown keen interest to collaborate with WAPDA for the purpose.

It is pertinent to mention that three contractors for construction of Karakoram Highway, access road and transmission line to supply electricity from Duber Khwar to the project site have already been awarded. The evaluation of the bids for pre-qualification of main works of Dasu Hydropower project is likely to start in the middle of May 2015.

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