Project assistance completion report : energy commodities and equipment program -- 391-0486

The CIP has been a success. Equipment and commodities worth $97.2 million were procured for 9 public agencies and 26 private businesses operating in all major energy subsectors (e.g,. energy conservation, fuel conversion, power sector, coal mining and processing, renewable energy, and oil and gas exploration); and short-term equipment operation and maintenance training was provided to approximately 110 GOP officials. Public sector demand for commodities was very high from the beginning, private sector demand less so, though it increased after the rate of interest was reduced from 14% to 11% and the repayment period increased from 3 to 5 years. Despite occasional bottlenecks, GOP cooperation with program implementation was remarkably good. Public enterprises that received assistance included the Water and Power Development Authority, Karachi Electric Supply Corporation, the Oil and Gas Development Corporation, the Geological Survey of Pakistan, the Pakistan Council of Scientific and Industrial Research, Hydrocarbon Development Institute of Pakistan, Pakistan Council of Appropriate Technology, Pakistan Mineral Development Corporation, and the Directorate General of New and Renewable Energy Resources. The program greatly benefited the Pakistani people. For example, refurbishment of thermal, gas, and steam power stations increased the electricity supply. Oil and gas exploration led to discoveries in Punjab and Baluchistan provinces. Compressed Natural Gas (CNG) stations were established in Karachi, Islamabad, and Lahore (CNG is an alternative to vehicle gasoline and three times cheaper); nearly 1,200 vehicles have converted to CNG systems, and the GOP has announced plans to commercialize CNG conversion. In addition, the country"s research capacity in coal and petroleum development has been increased. The following lessons were learned. (1) Public institutions are likely to become unrealistically acquisitive when requesting equipment; frequently, GOP agencies requested unnecessarily sophisticated equipment that required extensive user training. Equipment requests should be thoroughly screened. (2) CIPs should include more accountability and training than was included in this program. (3) Recipient agencies spent too much time preparing and finalizing technical specifications, evaluating bids, and awarding contracts. TA is essential to ensure timely preparation of error-free bid packages and realistic equipment requests. (4) Earlier private sector participation would have been encouraged had funds been more accessible, interest rates lower, and had there been an extended payback period on capital goods. (5) Successful marketing of U.S. equipment in Pakistan requires the availability of spare parts and sale services, as well as competitive prices. (6) Public sector purchasing agencies should provide clear delivery instructions to their equipment suppliers; on several occasions equipment was delivered to the wrong location. (7) Purchasing agencies should not pay vendors for equipment without certifying that the order is complete; in some instances, time and energy was wasted in locating supplies that were missing from an order. (8) Counterpart agencies should be familiarized with auditing processes.