Azad Kashmir Spectator

ISLAMABAD, April 14 -- The government has given the contract for 1,100 MW Kohala Hydropower Project to a Chinese firm, setting aside the Pakistan Procurement Regulatory Authority (PPRA) rules and without holding International Competitive Bidding (ICB), well-placed official sources told media.

The decision to award the contract to the Chinese company came soon after the recent visit of Cao Guanging, the chairman of the state-owned China Three Gorges Project Corporation (CTGPC),
during which he took up the issue of awarding the contract of the said project to its subsidiary company, CWE, in his meetings with President Asif Zardari and Prime Minister Yousuf Raza Gilani.

Cao Guanging had also held separate meetings with Federal Minister for Water and Power Naveed Qamar and Finance Minister Dr Hafeez A Sheikh and sought the contract of the project without the application of PPRA rules and the ICB, but the authorities expressed their inability to this effect, arguing it was difficult to set aside the PPRA rules. He was told that the issue was lying with the Ministry of Law, which would decide the fate of the contract.

"Now the Ministry of Law has decided that the project can be given to the Chinese company as the project falls under the jurisdiction of the Azad Jammu and Kashmir and the PPRA rules are applicable only in Pakistan, not in the AJK," top officials of the ministry confided to this correspondent.

They said: "The Ministry of Law has provided this opportunity to the said company, saying this project has nothing to do with the Government of Pakistan and AJK government. The AJK Council alone is the only forum to decide about the project."

"Yes, the Ministry of Law has given the go-ahead signal to the government to award the contract to the Chinese company without implementing the PPRA rules in this case," was the answer of Secretary Water and Power Javed Iqbal when this correspondent contacted him for confirmation.

The official sources said that the Ministry of Water and Power had earlier sought the opinion of the law ministry whether the PPRA rules were applicable in the jurisdiction of Azad Jammu and Kashmir (AJK) and if these are not applicable in the AJK, then Kohala Hydropower Project could be awarded to a Chinese company.

According to the official correspondence between the Ministry of Water and Power and Wapda, Wapda asserted that the PPRA rules were applicable since the feasibility studies, detailed engineering design and tender documents were fully financed from the public funds. Wapda also argued that grounds of urgency do not exist so as to confer any waiver from PPRA rules and the cost of the project worked out by the sponsor was higher by $344.32 million than cost estimations by Wapda. It desired the project to be offered through ICB to ensure quality and competitive cost of the project. "This shows that the Ministry of Water and Power and Wapda are not on the same page on the issue,