MUZAFFARABAD, Dec 26: A private sector company would initiate work on a 79-megawatt hydel power project in Azad Kashmir sometime in the middle of next year as Wapda has signed the power purchase tariff with it recently.

The New Bong Escape project, having an estimated cost of $100 million (Rs6 billion), would be constructed on New Bong canal at downstream of Mangla Dam in district Mirpur by Lariab Energy Ltd (LEL) in collaboration with a French company, Alstom Power Company, LEL chairman Haji Aziz Mohammad Khan told newsmen on Monday.

He said the MoU to this effect was signed by Wapda chairman Lt-Gen Zulfiqar Ali Khan and LEL chief executive Khalid Faizi at Wapda House, Lahore, last week.

Haji Aziz said that multinational construction companies were being invited to participate in the bid for the construction of the project and added that the project was scheduled to become operative by the end of 2005.

Elaborating the salient features of the gigantic project, first of its kind being launched by a private-sector concern in AJK, he pointed out it was the first hydel IPP (Independent Power Producer) in the country which had successfully negotiated power purchase tariff with Wapda under the hydel power policy of the government of Pakistan.

It was also the first agreement signed between Wapda and any hydel IPP at a very economical rate of 3.336 cents per unit for the project life of 25 years. After this, the project would automatically be transferred to Wapda free of cost, he added.

Mr Khan said the project would prove a major breakthrough in the field of hydel power generation in Azad Kashmir and would open new vistas for the local and foreign investments by the intending private-sector entrepreneurs in the trade and industrial sector in the liberated territory following the supply of electricity to the consumers at extremely cheaper rates.

Bright potentials were already identified in various parts of AJK for small and medium-size hydel power projects following the availability of abundant water flows in the mountainous terrain of Azad Kashmir for the generation of over 5,000 mw hydel electricity.