Apropos a news item carried by a section of press, Munda Hydropower Project said the news item casts unjust and inappropriate aspersions on the concerted and sincere efforts of the sponsors towards developing of the MMDP. A mega hydropower project awarded for the first time not only in the history of Pakistan but in the world for development in the private sector under the Pakistan Policy for Power Projects Year 2002. "To keep the records straight we are bringing the following facts to your kind notice, which are verifiable from both the Private Power and Infrastructure Board (PPIB) as well as the Ministry of Water and Power. "During his visit to the US in 2002, President Pervez Musharraf asked Pakistani Americans to come forward and invest in Pakistan particularly in the power sector. Motivated by the sincerity of his purpose the AMZO LLC (a Maryland US registered company) offered to invest in Pakistan over $1 billion to develop the Munda Multipurpose Dam Project located on River Swat in NWFP. "AMZO LLC was assigned the project under the Power Policy of year 2002 and in accordance with the stipulations of the Policy submitted their Statement of Qualifications and having the required financial proficiency and technical ability were qualified by the Private Power and Infrastructure Board (PPIB), Ministry of Water and Power. The PPIB issued their Letter of Intent (LOI) on May 11, 2004 to develop the feasibility of the MMDP as a Raw Site within a period of 24 months (later extended to 30 months due to the earthquake of October 2005). One of the conditions of the LoI was that the PPIB will appoint a Panel of Experts to monitor the conduct of the Feasibility Study and its progress, to verify attainment of the milestones laid in the LoI and to ensure implementation of the subject project consistent with national and provincial needs. "The sponsors hired the services of a consortium of consultants of international repute led by M/s Lahmeyer Intl. of Germany and associated by two renowned Pakistani firms, M/s National Development Consultants (NDC) and M/s Review Consultants who successfully completed the Project feasibility within the allocated period. The feasibility was approved by the PPIB on the recommendations of the PoE and the approval letter was issued on November 11, 2006. "During the course of development of the feasibility studies, AMZO LLC USA entered into joint venture with another investor namely, Hydro Energy Investments Ltd (HEIL) from UK and informed the PPIB accordingly. Both the investors formed a project company namely, Munda Hydropower Ltd (MHL) which is now the owner and the sponsors of the MMDP and which has been duly recognised by the PPIB. "Although, under the Policy the project was assigned to the sponsors for development as a power project, yet the sponsors being of Pakistan origin developed the project feasibility as a multipurpose project properly incorporating needs of irrigation development and flood mitigation and also gave an undertaking, which forms an integral part of the Letter of Approval that while carrying out the detailed design of the project, concerns and observations of the Irrigation and Power Department of NWFP and WAPDA would be duly taken care of. "In a high-level meeting (October 09, 2006) chaired by the President of Pakistan and also attended by the then Prime Minister, the sponsors made a briefing on the development of the project and the President expressed his keen interest to inaugurate the project in December 2006. However, he was prevented to do the same by the bureaucracy and the Minister of Water and Power Liaqat Ali Jatoi for reasons best known to them. "Most unfortunately, the sponsors offer of sacrificing their investment interest in the production and sale of power by changing the project function to irrigation and flood mitigation as primary function and power production as by-product was not befittingly responded to and in January 2007 it was learnt from media that the government has decided to alter the dam parameters. The sponsors immediately requested the Ministry of Water and Power intimation of the decision so that the consultants are asked to study the implications of the changes based on site conditions. Despite their best efforts in the form of letters, communications through personal contacts including the Minister of Water and Power no response whatever was received and the sponsors were kept in suspense for almost 12 months. "After great clamouring by the sponsors, the ministry called the sponsors in a high-level meeting on January 11, 2008 and offered the sponsors development of the project on Public-Private Partnership basis (PPP) with either Wapda or NWFP or both on mutually agreed terms and conditions. Till today, the sponsors have not been intimated of any terms and conditions or infrastructure developed by the government relating to Public-Private Partnership. "The sponsors of MMDP by far have spent more than $15.0 million towards the development of the feasibility studies. The sponsors even before their signing of the power purchase agreement have obtained firm commitment of total project construction costs from two international financial institutions namely, M/s VA Tech Finance of Austria and M/s Credit Agricole, a Swiss Bank. These commitment letters have been provided to the PPIB/Ministry of Water and Power, which are on their records. It is needless to say that under the prevalent Pakistan economic conditions obtaining of the commitment letters from foreign investors/lenders itself bespeaks of the credibility and financial purport of the sponsors. "We earnestly hope the facts as above would amply prove that the sponsors have in no way derelicted or digressed from the stipulations of the Power Policy of year 2002, under which the development of MMDP was assigned to them, nor they have in any way shirked from their firm commitment of development/construction of the MMDP. The delays in immediate commencement of the project development activity are solely due to the unfortunate and uncalled-for hurdles and hindrances on the part of the government. The PPIB or Ministry of Water and Power cannot by a unilateral, one sided or arbitrary action snatch the MMDP from its present sponsors and assign it to a third party to the detriment of the sponsors. The government must acknowledge that private sector investment in this country has already been substantially withdrawn and any uncalled-for harm to the investors of MMDP will further impede private investments in Pakistan, which is already devoid of finances for implementation of its ongoing projects." Copyright Business Recorder, 2008