Second Energy China company expresses interest in finishing Karachi’s K-IV
A second Chinese company has expressed interest in completing K-IV, a Karachi bulk water supply project from Keenjhar Lake, which has been suffering from over a decade of delays.
K-IV is a 121km canal designed by Osmani & Co and built by the FWO. Construction had to be stopped two years ago because of multiple problems. So far Rs11.9 billion has been spent on it. It was supposed to bring 650mgd to Karachi.
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The China Energy Engineering Group Planning & Engineering Co. Ltd wrote an Expression of Interest letter to the Ministry of Finance and Sindh chief minister on January 25. CEEC is already working on CPEC. Its president Luo Bixiong had met Sindh Chief Minister Murad Ali Shah earlier, on October 25 and discussed Karachi’s projects infrastructure, especially K-IV.
“Our preliminary study reveals many flaws in the K-IV water supply project in terms of project design, engineering, and financial aspects,” he wrote in the EoI. “With our vast experience in similar projects, we are encouraged to inform you that the project needs to be seriously redesigned for practical, durable, sustainable, and bankable execution.”
What is worth mentioning is that Energy China, a super central state-owned enterprise, is the parent company of the two companies that have pitched their services to the Sindh government. Nearly a month earlier one of its 16 subsidiaries, a major one, in fact, China Gezhouba Group Corp also sent an EoI to the CM’s Secretariat, in December 2019. This was put through to the Sindh Local Government Secretary by January 17. Gezhouba and CEEC are both parts of Energy China.
One of the senior officers at K-IV informed SAMAA Digital that both proposals were discussed in meetings before the lockdown.
Ever since work was stopped on K-IV in 2018, the chief minister has been trying to look for ways to have the design fixed. The Sindh government asked independent engineering company Nespak to take a look at Osmani’s design and point out problems. Nespak came back with a detailed review in which it pointed out many problems with the way K-IV had been designed.
The Sindh government formed a committee to then bring Nespak and Osmani to the table to discuss the review. The goal was to make recommendations to the chief minister on how work could be taken forward. After several meetings, however, the committee concluded that they should stick to the old route and that Osmani would modify the design and resubmit it to the KWSB.
The chief minister has been talking for a while about getting international donors to help with K-IV. One possibility is to engage the Chinese by having K-IV added to the CPEC list. The other is to plug K-IV into the Karachi Water and Sewerage Services Improvement Project which the World Bank is working on. In December 2019, a handout from CM House said that he had approved an investment plan, but had yet to share it with the World Bank, on K-IV augmentation, bulk supply options, and new filtration plants. (Augmentation is connecting the canal to the existing Karachi water pipeline network). This could be parked under a second Karachi Water and Sewerage Services Improvement project worth $600 million ($240 million would be given by the World Bank/IBRD, $240 million by the Asian Infrastructure Investment Bank and $120 million by the Sindh government.) The first KWSSIP is worth $100m. A loan was signed in December.
It is worth mentioning that the World Bank debarred one of the subsidiaries of Energy China, China Energy Engineering Group Hunan Electric Power Design Institute Co., Ltd (CEEC-HEPDI), from taking part in any projects it financed in Zambia for 20 months in 2019 because of fraud.