Poor procurement practices, insufficient planning, a high risk to electricity transmission: ADB

LAHORE: Complex and deficient procurement practices coupled with the insufficient planning of resource utilisation for projects within the National Transmission and Dispatch Company (NTDC) are posing high risks to Pakistan transmission sector, states the Asian Development Bank (ADB) preliminary assessment draft notes.

The draft notes for key energy sector analyses and recommendations for 2018–2023, are being prepared by the bank, underline the need for improvement for insufficient organisation and staff capacity for procurement.

The notes say that ongoing capacity constraints and the complex internal control and approval process are being addressed through advance actions such as additional subcontracted and consulting resources, a strengthened project management unit, and with realistic project schedules.

The notes say that NTDC analysed the performance of the power system under various load and generation scenarios to identify actual and expected constraints in order to identify and prioritise projects to address the shortfall in transmission capacity.

Pointing complex and deficient procurement practices and resources with NTDC, the notes pointed out a lack of coordination between NTDC departments, and complex internal control and bureaucratic mechanisms that consume a lot of time, causing unnecessary delays. The notes highlight that these issues are being addressed by adding additional resources, strengthening project management, streamlining procurement, coordination with the Public Procurement Regulatory Authority and series of training programs for procurement practitioners.

The notes highlighted that the delay in NTDC’s decision to utilise the consultancy support funding to improve its capacity as a commercial entity has also been a factor for the poor rating.

In addition, the NTDC licence calls for the establishment and implementation of a number of functions within the specified deadlines. The notes included that in order to improve governance NTDC requires assistance with skills and resources accompanied with specialised training for the management and staff.

The major functions mentioned under the licence were the establishment and implementation of the single buyer model by July 1, 2004, and the competitive market operations established and operational by July 1, 2009. The notes said that it is of utmost importance that the new power trading system gains trust by improving governance and by reducing shortfalls and that can only be developed by specialised and comprehensive educational training.

They noted that the government’s investment program places extreme pressure on the capacity of most NTDC departments, including planning, design, procurement, project management, and implementation. Therefore a detailed capacity development plan should be prepared to focus the requirements to meet the outputs and outcomes effectively in the future.

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