Neelum-Jhelum Hydropower Project delayed for 7-8 months

ISLAMABAD: In another shocking development, the 969MW Neelum-Jhelum Hydropower Project, whose cost has swelled to whopping Rs414 billion, has been delayed by another seven to eight months in the wake of government’s failure in achieving the financial closure.
In the case, financial closure of the project, which has been completed by 74.5 per cent, is achieved today, then all the turbines of project will go on test run by end of next year, one of the top men in Wapda told The News. The earlier timeline for the project completion was Nov 2016 which has now been extended to July-August 2017. But even if the required amount of almost $1.576 billion is ensured now, the project will be on test run by end of next calendar year. However, the delay can be reduced to seven to eight months by working round the clock.
China’s EXIM bank has linked the release of $576 million to Pakistan to the approval of revised PC-1 of the project with a cost of Rs414 billion by Ecnec (Executive Committee of National Economic Council) as the CDWP (Central Development Working Party) has already recommended the project with the new cost.
Likewise, a local banks’ consortium headed by National Bank of Pakistan (NBP) has also argued that it will provide the Rs100 billion (around $1 billion) loan the moment Ecnec approves the project.
However, the Nawaz government that wants the project to be completed by 2016-end has failed to achieve the financial closure.
However, Wapda Chairman Zafar Mehmood, when contacted, in a cautious response said the project was facing financial constraints. “If the financial closure gets achieved today then the project will be functional some time by the end of 2017.” However, he remained tight lipped when asked as to when the financial closure will be achieved.
Younas Dagha - secretary water and power - didn’t respond when he was sent an SMS containing the question: Is there any development that the Neelum-Jhelum Hydropower Project has delayed by 7-8 months because of the government’s failure in achieving financial closure? The correspondent made several calls on his cell phone, but it remained unattended. However, the top official said: “We are spending more money out of the budgeted amount that was to be spent by Wapda’s own resources and keeping the project afloat so that the contractor could not make its mind to leave the project.”
The PC-1 has been revised thrice and the project is 74.5 per cent complete in the absence of financial closure. So in this way, this project is one of its own kind.
“So far a huge amount of Rs180 billion has been spent on the project out of which Rs 39 billion is being generated through Neelum-Jhelum Surcharge imposed on electricity bills.”
In 2002, the official says, the project cost was Rs84 billion, but its design had to be modified after the 2005 earthquake,, keeping in view the fault lines passing through the site, while the scale of the project also expanded.
Furthermore, the cost escalated to Rs274 billion due to the rising value of dollar. Now, it is the third time that the project cost has be revised upward to Rs414 billion mainly because of the inclusion of duties, taxes and IDC (interests during cost) till completion of the project and the cost of the consultant.
The 86 per cent increase in the cost is because of the IDC and 7 per cent in the wake of consultancy fee. So far, 74.5 per cent construction work has been completed on the site. “We have constructed the tunnel beneath the bed of River Jhelum, which will be connected to the tunnel coming from the dam site by end of January 2016.”
Moreover, transformers and mechanical equipment has been installed in powerhouse, while power pylons are being installed in the switch yard from where electricity will be transmitted to the Gujranwala grid station.
The tunnel excavation has been completed by 86 per cent as 59-km tunnel has been constructed. At the dam site, 72 per cent construction work has been completed, including the construction of spillway up to level of 1019 meters, wherein one hydraulic gate has been installed and the second one will also be in place in next two months.
The tunnel boarding machines (TBMs) have the target to excavate the 22.5-km tunnel out of which 13.5-km has been done. The official said the project was earlier delayed by six months because of the rock burst at the site owing to which three workers died and nine were injured.