THE 969MW Neelum-Jhelum hydro-electric power project is considered the world’s most expensive hydropower project. Construction of the project was launched in July 2007 at a cost of Rs90.9 billion and was scheduled for completion in October 2015.

The irony is that the electricity consumers have been paying the Neelum-Jhelum surcharge since 2007, which is Rs0.10 per kWh of electricity consumed each month by the end user. This was to be discontinued in June 2018 according to a decision of the Economic Coordination Committee (ECC) of the cabinet in 2015. But the consumers continue to pay the surcharge since the project has not been commissioned completely so far.

Surprisingly, the project is being financed by a number of donors including the Islamic Development Bank, Saudi Fund for Development, Kuwait Fund for Development, OPEC Fund for Development and China Exim Bank, besides Pakistan government funding in local currency.

Yet, it was considered prudent by the government to overburden the electricity consumers, who have contributed about Rs100 billion so far through the surcharge imposed. Unfortunately, the exercise continues, without an end in sight. The levelised tariff for Neelum Jhelum power plant is Rs13.24 per kWh for 30 years, and Rs14.59 for the first 20 years.

It is too high, rather comparable to tariff for oil-based power generation in Pakistan, whereas globally the hydropower generation cost is among the lowest. Currently, Wapda bulk supply tariff for 21 hydropower stations in operation is Rs 1.16 per unit.

It is estimated that consumers will pay Rs48.7 billion every year for 20 years to service Neelum Jhelum project’s debts. Indeed, Neelum Jhelum project is a typical case of myopic planning and poor implementation.

Hussain Siddiqui

Islamabad

Published in Dawn, August 10th, 2018