World Bank may allow 22-month extension of NTMP-1 closing date

Spread the love

World Bank (WB) is likely to allow 22 months extension on the closing date of the $425 million National Transmission Modernization I project (NTMP-1) to regulate delays on different accounts.

The World Bank’s Country Director, Najy Benhassine in a letter to Secretary Economic Affairs, Dr Kazim Niaz has shared the Aide Memoire of the World Bank team that conducted a Mid Term Review (MTR) and implementation support mission for the NTMP-1 held during the period of June 27-July 7, 2022.

The objectives of the mission were to: (i) review the project status of the NTMP-l project, including procurement, contract management, final management, disbursement, and reporting under the project, and ; (ii) discuss the anticipated restructuring of the project and possible fund re-allocation and provide the necessary support to National Transmission and Despatch Company (NTDC) on the implementation of the project.

The project’s component A is the expansion and upgrade of the transmission network- (cost $344.56 million). Component B is comprised of deployment of the Enterprise Resource Planning System: (cost $29.16 million); and component C is project management, technical assistance and capacity building (cost $20 million).

According to the World Bank country director, the following are the key issues and main agreements reached as outcomes of the mission which the Bank is of the view needs to be addressed by the NTDC.

T5HP: WB agrees to amend IBRD, AIIB loan agreements

Project Restructuring. First, based on the MTR findings, several key components of NTMP- I are scheduled to run over the current project closing date of January 31, 2024. Hence, the project needs to be restructured to account for initial delays in commencement due to huge delays in engaging the design consultant for the project. The mission agreed with NTDC for a possible extension of the closing date by an additional 22 months from January 31, 2024, to November 30, 2025 for the project.

Secondly, NTDC has sought to reallocate unused funds from both components B and C to component A with a view to have funds to settle potential extension of time claims. NTDC estimates that it may seek to reallocate $5 million from component C and $3.6 million from component B, totalling $8.6 million to component A. World Bank has requested the Ministry of Economic Affairs (MoEA) and NTDC to work together to submit a Project Restructuring request to World Bank in the coming months.

Islamabad West Substation(IWS): This component is affected by significant delays in the acquisition of land and is on a critical path, due to its role in connecting both Dasu and Tarbela- V hydropower stations. Section 5 has been approved and notified by the Commissioner and this is being followed by the award under Section-l1. World Bank has requested NTDC to fast-track this process of evaluation of trees.

Crops and structures, and start making payments according to the resettlement plan. The technical proposals were received by NTDC for the IWS in December 2021, and the draft Technical Evaluation Report (TER) was shared with the Bank on August 28, after a gap of more than eight months. The TER has been reviewed by the Bank and returned for comments.

Approval of change orders: The Bank is of the view that some contractors were at standstill in the execution of their sub-projects because NTDC had not approved their request for change orders, and in some cases, taking as long as seven months to obtain approvals.

Related posts