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| 25 November 2004 | Thursday | 12 Shawwal 1425 |
Work to begin soon on Rs87bn power plant
ISLAMABAD, Nov 24: Pakistan has decided to start construction work on Rs87 billion 960-MW Neelum-Jhelum power project in Azad Kashmir on war footing to maintain its priority rights over the Jhelum river.
Official sources told Dawn on Wednesday that President Gen Pervez Musharraf had directed the Ministry of Water and Power and Wapda to start construction of the project in the private or public sector immediately.
If the project is not started immediately, Pakistan would be obliged under the 1960 Indus Waters Treaty to allow India to divert Jhelum waters for power generation that would compromise Pakistan's priority rights over the river.
A senior official of the power ministry said the president recently directed that if there were any difficulties in developing the project in the private sector resulting in delays, steps should be taken to construct the project in the public sector immediately for which Prime Minister Shaukat Aziz would make finances available.
The strategic project like the Neelum-Jhelum could not be delayed any more just because of minor issues like finances and procedural difficulties, the official quoted the president as saying at a recent meeting.
The immediate start of the project has become crucial for Pakistan in view of the fact that Indian government has released $200 million to the relevant authorities to undertake Kishanganga Hydro Project on the same river.
The Indian authorities are currently in the tendering process to start the project. If India starts the project first, Pakistan will loose its priority rights over the river and would not be able to develop the 969-mw project.
On the other hand, the Wapda has sought permission from the Economic Coordination Committee (ECC) of the cabinet to start negotiations with four Chinese consortium who have shown interest to undertake the mega project.
The Wapda wants that it should be allowed to negotiate with Chinese firms to construct the project on build and transfer (BT) or turn-key basis. The sources, however, said the Chinese companies have shown interest in the project but they have not come up with specific proposals on arrangement of finances and other terms and conditions.
Local engineering firms Sachal and Frontier Works Organization had also firmed up a consortium with a US-firm Synergics Hydro for the project but had set a condition to first prequalify all the competing firms and hold a bidding process to award the contract instead of negotiations with Chinese firms.
The official said the government wanted to engage companies who have vast experience of such hydropower projects and must have carried out at least $200 million worth of similar projects in one year.
The sources said the Minister for Water and Power Liaqat Ali Jatoi would preside over a meeting on the subject here on Thursday to have an update of the project and examine various proposals.
This would be followed by a comprehensive presentation to Prime Minister Shaukat Aziz within a couple of days to take a final decision whether the project could be implemented in the private sector or public sector should be assigned the task. The prime minister would also decide whether project contract be awarded through negotiations or competitive bidding in case it is given to the private sector.
Mr Jatoi had asked the Wapda last month to submit a comprehensive report on the subject immediately but is still awaited. Wapda Chairman Tariq Hamid is expected to give a presentation to the Power Minister on Thursday so that the President and the Prime Minister could be briefed about the latest situation.
These sources said that Wapda has also offered to make available Rs10 to 15 billion out of its own resources and has asked the federal government to arrange an equivalent amount to start the project on war-footings within the current fiscal year.
The Wapda has prepared even the bid documents for inviting the private sector to construct the 960-MW run-of-the river project. It understands that if allowed immediately the construction could be started within four months time.
Pakistan had refused last year to allow even a minor diversion of Jhelum river by India because that could have jeopardized the development of Neelum-Jhelum power system in Azad Kashmir.
New Delhi had requested Islamabad to allow it diversion of Ganga waters in the held Kashmir for power generation from its proposed Kishanganga project. Jhelum is called Ganga in Indian side. It had assured that there would be no storage and the diverted waters would be re-routed into the Jhelum through wullar barrage.
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