MUZAFFARABAD, Aug 21: Delay in completion of inquiry by the AJK Ehtesab Bureau into alleged corruption in the Jagran hydropower project is hampering its 'safe and smooth' operation and causing losses to the government, it was learnt on Saturday.

The 30.4 megawatt project was launched in the Neelum Valley in 1994. Initially its cost was estimated at Rs2.603 billion but later it swelled to Rs4.404 billion. The project was commissioned and inaugurated by President Pervez Musharraf in October 2000.

So far, the Executive Committee of the National Economic Council has not approved the revised PC-I of the project and has linked it with the completion of the inquiry. The bureau is yet to come up with its findings.

"If the Jagran project has to be operated smoothly and safely in future, then the completion of the inquiry and its financial closure with the contractor is a must," AJK Hydroelectric Board Managing Director Afzal Latif Puri told Dawn.

The contractor - a consortium of French and Swedish firms - was not extending any cooperation in operation and maintenance of the project, he said.

Over the past eight months, the state exchequer had to bear a loss of Rs73.4 million as two of the five powerhouse units became inoperative due to faults in the transformers and relays.

The units could not be repaired because neither spare parts were made available at the powerhouse nor were those available in the open market, said Mr Puri.

He said that after the commissioning of the project, availability of its spare parts should have been ensured by the HEB administration, but no attention was paid towards it.

The parts which caused a loss of Rs73.4 million had cost only Rs2.5 million, he said.

The MD said the contractor had demanded Rs261 million and was adding interest to the amount.

The Swedish ambassador to Pakistan recently took up the case of the consortium with the authorities concerned in Pakistan and AJK.

Responding to a question, Mr Puri said since its commissioning in Oct 2000, the Jagran project had produced 435.23 million units, and excluding the 10.86 per cent line losses, income from the remaining units was around Rs659 million.

He was hopeful that the line losses would scale down following the repair of the transmission line.

The MD asserted that the HEB was striving to extract maximum production from the existing powerhouses besides launching other projects in the public and private sectors.