Govt serves up Rs16bn damages for delays in LNG power plants

ISLAMABAD: The government has claimed about Rs16 billion liquidity damages (LDs) from Chinese contractors and their local partners for delays in commissioning of its two LNG-based power projects of about 1,230MW each in Punjab.

A senior official said the National Power Projects Management Company Ltd (NPPMCL) had formally issued notices to the contractors of both the projects for recovery of liquidity damages. Under the contract, he said the contractors were required to pay 10pc of the Engineering, Procurement and Construction (EPC) cost of the project, he said.

The 1,230MW LNG-based power project at Balloki-Kasur, near Lahore was given to Harbin Electric International and Habib Rafique Group as EPC contract at an estimated cost of about $600 million while similar project at Haveli Bahadur Shah in Jhang was given on EPC to Power Construction Corporation of China and Al-Qavi Engineering at $624m.

He said the notices had been issued for recovery of more than Rs16bn from the two consortia of contractors including almost $123m as LDs and some other charges. Both the projects missed their commercial operation deadlines (CODs) for combined cycle generation by 4-5 months, causing economic loss and opportunity costs to the government while the entire gas sector supply chain suffered losses.

Published in Dawn, 15th May, 2018