Daily Times

ISLAMABAD: The Neelum-Jhelum Hydroelectric Project, having a lifespan of 30 years, has not been completed even after 28 years since the start of the construction work thereon owing to sheer negligence and ill-conceived policies of the respective quarters.

Daily Times has learnt that the cost of 969 megawatt Neelum-Jhelum Hydroelectric Project has surged to Rs 500 billion from the preliminary estimated cost of Rs 15 billion in 1989.

During the tenure of the incumbent government alone, the project’s cost has gone up from Rs 274 billion to Rs 500 billion in just three-and-a-half years.

Document stated that the Executive Committee of the National Economic Council (ECNEC) had approved the 969MW Neelum-Jhelum Hydroelectric Project on December 31, 1989, which would have then cost Rs 15 billion, with the foreign exchange component (FEC) of Rs 7 billion.

The main objective of the project was to generate 969MW power by constructing a concrete gravity dam on the Neelum River at Nauseri, Muzaffarabad, and installing four Francis turbines.

The ECNEC meeting held in 2002 approved the revised PC-1 at the cost of Rs 84 billion, with the FEC of Rs 46 billion. Second revision of the PC-1 was approved by the ECNEC on July 3, 2013 at the total cost of Rs 274 billion, with the FEC of Rs 158 billion. The council also issued directives of laying the transmission lines with the completion of the project. The Ministry of Water and Power (MoWP) directed the authorities concerned to ensure that on completion, the project should generate power according to installed capacity. The MoWP was also directed to probe the causes of the inordinate delay in the execution of the project, resulting in cost and time overrun.

In compliance with the ECNEC decision, the MoWP on May 5, 2015 constituted a committee under the chairmanship of the chief engineering adviser.

The committee stated in its findings that the first tender was given in 2005 despite a passage of 3 years, and if the process would have been initiated earlier, time could have been saved. The project was finally awarded after changing the mode of financing the third time.

The findings further stated that increase in the project’s cost was due to two tunnel boring machines worth Rs 19.5 billion, variation in prices to award the project and change in the design of the project after the earthquake.

Documents indicated that the increase in cost was attributed to implementation of the project without achieving financial close, which resulted in cash-flow constraints and delays. The Power Ministry did not implement the decision of the second revised PC-1. it stated that the unit construction cost of the project is $4.23 million, which is higher than the other hydroelectric power projects in the area.

The National Accountability Bureau (NAB) had initiated an inquiry against WAPDA officers over alleged violation of Public Procurement Regulatory Authority (PPRA) rules in procurement of tunnel boring machines and other equipments.

It is worth mentioning here that the physical progress of works – up to December 31, 2014 – had been estimated at about 70 percent, and it was stated in the PC-1 that the first unit would start working in November 2016, but the first unit could not be started despite a passage of two months.

In addition to this, the WAPDA submitted the third revised PC-1 of the project at Rs 414 billion after taking directives from Finance Minister Ishaq Dar. In this third PC-1, the WAPDA set the completion date of the project at 2017-18. According to sources, the 969MW Neelum-Jhelum Hydroelectric Project would not be completed in 2017-18 because of funding and environmental issues. Nobody is paying heed to these issues and its estimated cost has reached around Rs 500 billion.

Moreover, sources said that the Ministry of Planning, Development and Reforms had not conducted the third-party panel of experts’ review of the cost estimates of the PC-1 so far, which would have ensured transparency in the execution of the project.