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Neelum-Jhelum hydro-power project

September 20, 2013

THIS refers to the news report: ‘The Planning Commission of Pakistan has so far released Rs41.208bn under its Public Sector Development Programme (PSDP) for various projects against the total allocations of Rs540bn for the fiscal year 2013-14’ (Sept 11).

I was shocked to know that there was no allocation of funds for the Neelum-Jhelum hydropower project, though the “Chinese contractor threatens to halt work due to non-payment by government of Pakistan on Aug 24, 2013”.

It is a fact that work on the Neelum-Jhelum Hydropower Project of 969 MW, a symbol of Pakistan-China strategic partnership, has almost come to a halt because of non-payment of funds to Chinese companies for more than a year by our governments.

As a result, Chinese companies also failed to pay Pakistani subcontractors and suppliers, in some cases for the last two years. The cessation of work has created a financial dilemma for Chinese companies and Pakistani suppliers and subcontractors who have obtained funds from banks.

Unfortunately, an International Court of Arbitration has already ruled in favour of India on the Kishanganga hydroelectric project and upheld India’s right to divert water from the hydroelectric project to Kashmir. However, the water storage priority right will be decided by early completion of the project by Pakistan or India as per the Indus Water Treaty. Therefore, the Neelum-Jhelum project’s early completion is of immense importance to Pakistan to avoid a permanent loss of Rs30-35 billion a year if it failed to build before India.

Moreover, its early completion will also help to reduce loadshedding by providing 1,000 MW cheap electricity.

Unfortunately, our previous and new fund managers have failed to accord the due priority which this project warranted. I would like to request the prime minister to provide funds immediately to save the project. M.M. HUSSAIN Lahore