RLNG-Fired Project


M/s China Machinery Engineering Corporation (CMEC), which established 1,263 MW RLNG-fired project at Jhang, has sought help from Prime Minister Shehbaz Sharif to resolve its issues and raise more funds from China.

CMEC President Fang Yanshui, in a letter to Prime Minister has shared major concerns of the project, expecting a consistent support for the project.

He said on July 1, 2022 a successful seven-day reliability test was run of GT1 with a shared effort between the Government of Punjab, Punjab Thermal Power (Pvt) Limited and CMEC. Especially with the great support from PTPL and their CEO, Dr. Salman Zakaria, the project has achieved significant milestones.

According to the company, uptill now the project is into its 58th month since its beginning in Sep, 2017.

However, the project faces prolongation mainly because of the delay in arrangement of the Concession Agreements and Financial Close, which were caused internally by the former government after the Federal Government change in 2018. Such arrangement delay led to the project prolongation for more than 3 years, during which, CMEC, as a Chinese state-owned entity, has insisted on inputting tremendous additional resources (manpower, material and financial, etc) and efforts that were more than its contractual responsibility to maintain continuous construction, as well as overcome various difficulties during the implementation of the project. The CMEC kept approaching the Government of Punjab and PTPL for early completion proposal of the project and settlement with respect to major concerns, including permission of extension of time and additional costs settlement. The company maintains that project prolongation to CMEC has not yet been permitted, which means, simultaneously, CMEC may also suffer from huge amount of Liquidated Damages (LDs) for delay in completion, which causes critical impact and worries and undermines CMEC’s confidence in the project.

The company maintains that due to the project prolongation, CMEC has suffered from huge cost overrun of which it is fully aware.

“We have paid high attention on the project completion at soonest if the major concerns can be settled amicably among the related parties with win-win situation and it will bring confidence and expedite the project progress if Prime Minister and the federal government could intervene, coordinate and provide more funds support on this project,” he said, and proposed that to ease the financial burden of PTPL at this stage, an additional deferred payment compensation scheme (USD or RMB) during 2-3 years after COD would enable the company to borrow more funds from China to achieve the completion of the project.

President CMEC hoped that the project will gain more progress and achieve the commercial operation soon, and that reasonable requests from all concerned parties will be fully considered.—MUSHTAQ GHUMMAN

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