NTDC, Pak MLTC agree to extend project’s COD by six months

The government has extended the Commercial Operations Date (COD) of 660 kV HVDC Matiari – Lahore Transmission Line CPEC portfolio project from 1st March to 1st September 2021.

Federal Minister for Energy (Power Division) Muhammad Hammad Azhar witnessed the agreement signing ceremony of addendum /amendment in agreement for 660 kV HVDC Matiari – Lahore Transmission Line Project between NTDC and Pak MLTC and amendment No 1 to the Implementation Agreement (IA) between Private Power & Infrastructure Board (PPIB) and the Project Company i.e. Pak Matiari-Lahore Transmission Company (Pvt) Ltd (PMLTC) held at conference room of Power Division.

The documents were signed by Shah Jahan Mirza, Managing Director, and PPIB for amendment to the IA, Managing Director NTDC Engr Dr Khawaja Riffat Hassan for Addendum and Zhang Lei, President and CEO of PMLTC for both the agreements. SAPM on Power and Petroleum, Tabish Gauhar and Secretary Power Division Ali Raza Bhutta were also present on the occasion.

The Economic Coordination Committee (ECC) has also granted approval and under the new Transmission Services Agreement (TSA), the Required Commercial Operation Date (RCOD) of transmission line has been extended from 1st March 2021 to 1st September 2021. Whereas, Addendum has also been made in Operations and Maintenance Service Agreement (O&M).

 The 660 kV Matiari – Lahore Transmission Line Project is first ever HVDC Transmission Line Project in Pakistan which is being executed under the framework of China-Pakistan Economic Corridor (CPEC) agreement. It is also the first project being developed pursuant to the provisions of Private Sector Transmission Line Policy Framework approved and announced by the government of Pakistan (GOP) back in 2015. This transmission line is spread over a span of 886 km and capable of transmitting 4000 MW power at 660 kV. The project is being executed on Build-Own-Operate-Transfer (BOOT) basis and will be transferred to NTDC after a term of 25 years. The project entails foreign investment to the tune of $1,658.34 million. 

 In the light of aforesaid MoU, Addendum Agreements to the TSA and O&M Agreement were agreed between PMLTC and NTDC which were later approved by their respective BoDs. Moreover, an amendment to the IA was also finalised and approved to harmonise these changes in the TSA and the IA. As per mutually agreed terms of the agreement, the Commercial Operations Date (COD) of the project has been extended from 1st March to 1st September 2021. Nevertheless, during this period, NTDC would be allowed to transmit available power, for which the project company would be paid as per tariff to be approved by Nepra. 

 While speaking on the occasion, federal minister for Energy (Power Division) said that the present government is actively pursuing the completion of energy projects including CPEC projects. He further said it is one of the mega projects that will eventually evacuate electricity from South of the country to the north improving the economic merit dispatch order of the electricity. It will not only will benefit the electricity consumers also bring stability in the system, he added.

It is pertinent to mention here that in the month of December 2020, during the testing of said project, frequency oscillations in NTDC system lead to the differences between NTDC and Pak MLTC. However, the concentration of ministry of Energy (Power Division), PPIB, BoD NTDC, Foreign Office, Chairman CET China, and CPEC Authority played vital role during the proceedings of negotiations between NTDC and Chinese company. Resultantly, all technical and contractual issues were resolved amicably under the dispute resolution mechanism. 

Afterward, the MoU signed by NTDC and Pak MLTC was approved by board of directors of both the companies. Addendum /Amendment was also approved by Economic Coordination Committee (ECC) in the last week of March 2021. 

Presently, the project is energised at low power and 800 MW electricity is being transferred through the transmission line as test energy, as per agreed points in the MoU, and the project will continue to operate on trial run basis on low power till 1st May, 2021. Thereafter, the high-power test of 2200 MW will be started and after its successful completion, the HVDC transmission line will be tested for trial run of 7 days to confirm the capability of transmission line at 4000 MW designed capacity.

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