Ecnec okays five projects worth Rs1.3tr

Published April 7, 2023
Finance Minister Ishaq Dar chairs a meeting of the Executive Committee of the National Economic Council (Ecnec) in Islamabad on Thursday. — PID photo
Finance Minister Ishaq Dar chairs a meeting of the Executive Committee of the National Economic Council (Ecnec) in Islamabad on Thursday. — PID photo

ISLAMABAD: The cost of power generation facilities of the 4,500-megawatt Diamer Basha dam project is estimated to have surged by a massive 60 per cent (Rs555 billion) in nine months – between June 2022 and now – to Rs1.5 trillion just because of currency devaluation.

The revision in the cost estimates of power generation facilities to Rs1.236tr in January this year from Rs933.6bn according to June 2022 PC-1 was approved by the Executive Committee of the National Economic Council (Ecnec) alongside four other development projects on Thursday.

The meeting presided over by Finance Minister Ishaq Dar approved a total of five projects with a cumulative estimated cost of Rs1.312tr.

Strangely, the Ecnec approved the development of power generation facilities under Diamer Basha dam at a revised cost of Rs1.236tr at the exchange rate of Rs234 per US dollar instead of Rs160.09 per dollar based project cost in June 2022.

The cost approved by the Ecnec increased by about 25pc (Rs303bn) higher in six months – between June 2022 to January 2023 – to Rs1.237tr because of exchange rate losses. The revised approved cost also includes Rs598bn in foreign exchange component (FEC).

Cost for power generation from Diamer-Basha dam surges 60pc

However, the interbank exchange rate on Thursday stood at Rs284.42 per dollar which leads the project cost to Rs1.5tr and remains open to escalation. The meeting was told that in June 2009, the capital cost of the entire Diamer Basha Multipurpose project (including dam and power generation) was estimated at Rs894bn.

Because of external financing limitations, the project was spilt into dam and power generation facilities for development in two separate projects. The dam part was approved at an estimated cost of Rs480bn in November 2018 while a separate portion worth Rs175bn for land acquisition and resettlement was approved – both these components are under execution.

The Ministry of Water Resources and Wapda then separately submitted another PC-1 (Planning Code-1 a term used for the detailed feasibility study for project execution) for power generation facilities at a total cost of Rs933.584bn (at the rate of Rs160/$) with foreign exchange component of Rs409bn and was cleared by Central Development Working Party (CDWP) in June 2022.

Now, the cost of the project was updated to Rs1.236tr on the average floating exchange rate of January 2023 at Rs234 and was approved by the Ecnec on Thursday. This also includes a foreign exchange share of Rs598bn. The project will be implemented by Wapda.

The Ecnec approved the “Land Acquisition, Affected Properties, and Compensation for Rajanpur-Dera Ghazi Khan Section as four-Lane Highway and Dualisation & Rehabilitation of Dera Ghazi Khan-Dera Ismail Khan Section of N-55” project at a rationalised cost of Rs11.377bn without FEC. The committee also approved the “Reconstruction of Turbat-Mand Road from Motorway (M-8) to Iranian Border (Radeeq) project at a rationalised cost of Rs19.57bn.

The meeting also approved the “Construction of Panjgur-Gichak-Awaran Road” at the rationalised cost of Rs27.64bn without FEC. The Ecnec also approved Digital Economy Enhancement Project at a modified cost of Rs17.47bn, funded by the World Bank-IDA loan. The project plans to ensure the improvement in digitalisation efforts undertaken so far throughout Pakistan.

Ministry of IT & Telecom along with NITB, Nadra, PITB, IGNITE and Board of Investment (BoI) will execute the project.

Published in Dawn, April 7th, 2023

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