Neelum-Jhelum project continues without timeframe

LAHORE: The Neelum-Jhelum Hydropower Project, which is considered as one of the vital projects to overcome energy crisis in the country, has no timeframe of completion, Daily Times learnt on Monday.

Neelum-Jhehlum project’s completion under revised PC-1 (969 Megawatt) has put many questions for WAPDA to answer, as increase in the total cost of the project means the consumers would have to pay surcharge on bills until the completion of the project. Initially, the project was of Rs 84.55 billion, which now has been told by WAPDA to be completed at a cost of Rs 416 billion.

A committee was formed for the Neelum-Jhehlum project, which forwarded the revised PC-1 to the National Economic Council’s (ECNEC) Executive Committee for approval of increase in total cost of the project, but so far work on the project is continuing and no final date has been given for the completion of project due to lack of funds for the purpose.

The cost of revised PC-1 has been increased by Rs 7,376 million in engineering and supervision, exchange loss increased with a cost of Rs 36,850 million, duty and taxes with Rs 10,877 million, price escalation at Rs 44,086 million, interest during construction with Rs 28,110 million, others at Rs 9,266 million and total construction cost with Rs 2,418 million.
The WAPDA spokesman, upon contact, did not give any final date of the completion of project’s completion, saying nothing can be said about the completion of the project for the time being. He informed that departments are unable to give specific timeframe for the completion of the project so far.A WAPDA official, on the condition of anonymity, said the project should be completed within 2016.

In the start of current year, a WAPDA meeting, presided over by its Chairman Zafar Mahmood, was held. The meeting was also attended by Member (Water) Muhammad Shoaib Iqbal, Member (Power) Badrul Munir Murtiza and Member (Finance) Anwarul Haq.

While reviewing the revised PC-1 for 969-MW Neelum-Jhelum Hydropower Project before sending it to Ministry for Water and Power, the meeting deliberated upon the factors responsible for cost escalation of the project. It was noted that right from the beginning, the basic project concept went through major changes. Initially the project was designed for 550MW capacity with the powerhouse situated at Majhoi. However, subsequently, to optimise the power generation from the project, the powerhouse was shifted to Chattar Kalas, 21 km west of Muzaffarabad. This change resulted in additional financial implication.
The meeting further noted the 1st revised PC-I was approved by ECNEC in 2002 for Rs 84.55 billion on 2001 price level. At that time, the work on the project could not start due to lack of upfront funds. The funds were made available in 2007 and contract work was awarded the same year. The amount of awarded contract was Rs 90.9 billion and is one of the reasons of increase in overall cost of the project.

It was further discussed that in the aftermath of 2005 earthquake, the project consultants, as a part of their assignment, reviewed the tender design and undertook additional studies and investigations. The design review identified many areas of concern requiring design changes, which resulted in increased quantities and additional scope of work with substantial financial implication. The major design changes, which form the huge chunk of this additional cost, include change in the height and design of dam.


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