Pakistan Quetta Project 1997-2001

Nowadays, we have more news about Pakistan which has started to emerge in international news media on recent general elections and new Prime Minister Imran Khan. For a long period of time, Pakistan was plagued with wide spread corruption, inefficient public administration, conflict on Afghan border, tension with neighboring India. In our 1922 independence war, Indian muslims sent donations to our war efforts. Turkish people has friendly relations with Pakistan and generally with Indian muslims. We are very grateful for their assistance.

Recently we sold 30 each T129 Attack (Atak) helicopters and 4 each Milgem Corvette naval ships of our new production to Pakistan with an intergovernmental agreement. Profits in intergovernmental agreements are not so important. The important thing is the long term relationships, and respect to reciprocal interests.

As a private sector, we have to see the risks ahead and we have to price them. Now herein below, we will tell you about our Pakistani Quetta project, which was very difficult for us to execute.

Our Turkish 50-50% Joint Venture company had an Italian representative, who was a resident in Milan. Since we are the closest JV joint venture company to Milan, we were invited for company tour in Italy. Our American general manager and I plus one sales manager from the US headquarters came to Milan. We visited a lot of reputable Italian contractors in Milan and Rome . At that time, natural gas sales were exploded all over the world. Sales of natural gas-operated gas turbines and waste heat boilers (or heat recovery steam generators, HRSG for short) connected to their back were increased. We had a newly finished horizontal pass natural circulation waste heat boiler design. We sold in the domestic market, so detailed projects were ready. Everything was ready for foreign markets.

After company tour in Italy, a short time later, we received a request from Fiat Avio, a company we introduced in Milan.

As Fiat Avio, they were selling three GE LM-6000 gas turbines for the Quetta Power Company's new combined cycle power plant that will supply electricity to the Quetta city of Pakistan. Fiat Avio were asking for a price for the waste heat boilers to be placed behind.

Earlier in the domestic market, we have delivered a similar capacity waste heat boiler to the Akenerji Yalova Aksa factory, it was delivered, site erected, and working.

We prepared the same bid very quickly for Fiat Avio, and we sent it by courier. Our representative in Milan has received our proposal package, multiplied the offer and delivered it. After a while Fiat Avio invited us to their Milan office for meeting and final negotiation.

We made bid offer and price negotiation in Fiat for a week. In the end, we completed our negotiation, based on factory delivery basis, with a final price of US $ 4 million.

On the last minute, Fiat team wanted the on-site assembly price.

How could you declare a price for on-site installation in Quetta, Pakistan? We had no earlier preparation to quote for on site installation. We had no idea about Pakistan Quetta.

The proposal department of our parent local company assisted us, and our Italian representative gave other indicative prices about Pakistan. We asked tentative site installation prices from Pakistani companies in rush, in the end with an additional installation fee of around 1 million US $ for on-site assembly within a year.

The signatures were inked, the press release was published. Detail projects have already been prepared in four months, material procurement has been done, production has been started and finished, the vessel has been painted, it was ready in our Ankara factory ready to ship. The local shipping company has taken it to Mersin port, we have loaded the vessels on a ship to go to Pakistan. The ship crossed the Suez Canal, then passed through Red Sea, the Indian Ocean, and came to the port of Karachi, Pakistan.

We had a delivery item in our contract. We would pay penalty per day if we were late. But if we deliver early, we would get a bonus up to half the penalty per day. The contract was transferred by Fiat to the Pakistani power company. The Quetta power company authorities have resorted to another option that is more appropriate for them than giving us early delivery bonuses. The ship was held on the open sea for a month by the authorities of the port of Karachi for some artificial reason, then time has passed and when the penalty is begun, permission to enter seaport has been released. We could not get the early delivery bonus.

Then our field master moved the steam boiler to the city of Quetta. Our assembly team began field assembly with local contractors.

Our team could not have a long term residence permit for their employees. Our staff started to go in and out of Pakistan with a three month tourist visa. In the meantime, our field manager, due to intensive field work, he passed a few days. He was immediately taken into custody and detained by local authorities. We could not communicate with our field manager. We put our Pakistani embassy to get information. At the end of a month, we detected his location. We commissioned the mediators as required by Pakistani justice. We got our field officer out of the detention center. We brought him to home. But after spending one month in a detention center, staying with the Pakistani criminals ruined his psychology. He had to go out for a long vacation so he could recover. Our new field staffs were following the local rules meticulously. They never exceeded their legal three-month stay in the country.

Our new construction supervisor began to make uncontrollable expenses in a very remote environment. It was difficult to control him monetarily. He consumed and exceeded the budget. At the end of the site installation works in Quetta plant, we completed our job, finished, delivered, operated, tested, got our completion certificate.

In Quetta there was an earthquake later, and the surroundings of the central buildings were destroyed. The Afghan war in the immediate vicinity affected the city, and the power station.

Since then, the Plant is still in operation. There are many Turkish contractors in Pakistan, still working and earning good money. Prinkipo, 5 September 2018

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