ISLAMABAD: With the cost of 969MW Neelum-Jhelum Hydropower Project (NJHP) having increased several times owing mainly to inordinate delays, Prime Minister Yousuf Raza Gilani gave a go-ahead on Tuesday for importing electricity from India and decided to take up the matter with his Indian counterpart this month.
An official said India had offered to sell about 500MW of electricity. It may materialise within a year by laying a transmission line. The facility in theory would have two-way electricity trade because of difference in peak-time demands in the two countries but given the continuous shortfalls in Pakistan, India would be the net exporter of electricity in foreseeable future, he said.
A statement issued by the prime minister’s secretariat said Mr Gilani had expressed “deep concern” and “dissatisfaction” over long delays in the implementation of strategically important projects. It conceded that projects of about 3,945MW of electricity would not be completed within stipulated time.
Besides the NJHP, the other major projects facing delays include 1,100MW Kohala Hydropower Project in Azad Kashmir, 425MW combined cycle project at Nandipur in Punjab and 1,450MW Tarbela Expansion Project.
The federal government’s Public Sector Development Programme (PSDP) approved in June this year showed the NJHP’s cost at Rs84.5 billion that has now been revised to Rs333.191 billion, a cost overrun of about Rs249 billion or 296 per cent. The prime minister was informed by Wapda that the project was originally approved in 1989 at an estimated cost of Rs15 billion.
When contacted, Water and Power Secretary Imtiaz Kazi told Dawn that the prime minister did not call for an investigation into the unprecedented cost overruns to fix responsibility, but desired that the Cabinet Committee on Energy headed by Finance Minister Dr Hafeez Shaikh should scrutinise the issue.
He said the cost increases were due to a number of reasons, including devaluation of the rupee which alone had an impact of about Rs45 billion on the NJHP. He said Wapda Chairman Shakil Durrani and NJHP’s managing director Gen (retd) Zubair would be in a better position to explain the cost increases.
Mr Durrani, however, said there were cogent reasons for the cost escalation which could not be discussed on telephone.
An official said the reasons for cost escalation also included change in design owing to earthquake and use of tunnel boring machines to advance project implementation by 18 months.
The prime minister wanted to examine the project cost revision himself at a similar meeting soon.
Another official said the delays in hydropower projects in Azad Kashmir were not only compromising Pakistan’s river rights, but also enabling India to develop a number of projects on the same rivers and sell electricity to Pakistan.
The prime minister expressed satisfaction over the recent talks between experts of Pakistan and India on establishing back-to-back electricity grid between the two countries and said he was expected to meet his Indian counterpart on the sidelines of the Saarc conference in the Maldives later this month in which he would take up the ‘mutually beneficial project’.
The meeting was informed that the experts were in the process of finalisation of the cost, end-user agreement and other modalities of the project. A meeting of experts of both the countries will soon be held in Pakistan.
The statement said the prime minister “expressed deep concern over the long delay” in the NJHP and asked the ministries of finance and water and power and Wapda to work out financial plan so that it could be expedited and completed on schedule. He directed the cabinet committee on energy to meet every fortnight to remove bottlenecks.
The prime minister said the “mismanagement must be checked to improve the efficiency of these projects as they are the lifeline of Pakistan’s economy” and added that in view of the escalating cost of thermal power projects, the only viable way was to start hydropower projects.
He also “expressed dissatisfaction over the delay in executing the Kohala Hydropower Project of 1100 MW generation capacity” and directed that it should be expedited so that the pre-project procedure could be completed by the end of this year.
Mr Kazi said the project would be awarded to the China International Water and Electric Corporation (CWE) which had signed a memorandum of understanding with Wapda in 2008.
Regarding the Nandipur Thermal Power Project, Mr Gilani directed the cabinet committee on energy to look into ways to expedite work on the project. “The prime minister also directed that work on 1,450MW Tarbella-4 expansion project should be started without any further delay to produce affordable electricity in the country.”
Ministers for finance, petroleum, Kashmir and Gilgit-Baltistan affairs, secretaries of water and power, finance and law, State Bank’s deputy governor and Wapda chairman attended the meeting.
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