Non-operational Neelum Jhelum Hydropower project : Tunnel collapse causes total damage of Rs22.5bn

ISLAMABAD: The 969 MW Neelum-Jehlum hydropower project, which is non-operational since July 6, 2022 in the wake of blockage that appeared in the 3.5 kms Tail Race Tunnel (TRT), has seen an estimated damage of Rs22.50 billion (Rs2.50 bn construction cost and Rs20 billion as business loss).

“The project will now come on stream by the end of February 2023. Till February 2023, the project would brave a business loss of Rs20 billion,” a senior official of the Neelum-Jehlum Hydropower Company Limited (NJHPCL) told The News.

When asked as to who will bear the loss, either the government or NICL (National Insurance Company Limited), the official said that both the heads, TRT and business loss, are covered under the insurance agreement, so Wapda will not bear the loss. “NICL has a 7 percent share and a group of Chinese companies 93 percent in the insurance amount. And they will share the cost to be incurred on making the project operational.”

To a question, the official said that since the CoD of the project i.e. April 2018, the insurance company is getting Rs1 billion from NJHPCL and so far Rs4 billion have been received by the insurance company. Now they will pay the damage cost of Rs2.5 billion and business loss of Rs20 billion.

To a question, the official said the Neelum-Jehlum hydropower project generates business of Rs48-50 billion. “In three months of the summer season, four units (turbines) of the project become operational, in 6 months, three units and in three months of winter only one unit runs depending on flows of water.”

The official said that authorities have decided to purchase the maintenance vehicle for the inspection of tunnel and complete the construction of the tunnel as soon as possible.

The initial report about the tunnel debacle suggests that on July 04, 2022, when the plant was running at its full capacity (969MW), an abnormal increase in water leakage was observed in the powerhouse which was controlled through continuous drainage pumps. Upon investigation, high water pressure in the Tail Race Tunnel (TRT) was observed.

Accordingly, on July 05, 2022, it was concluded by the project consultants that abnormal increase in TRT pressure and water leakages/seepage in power house are due to blockage in TRT. Considering safety of the power structure and all other equipment/machinery, units were shut down gradually. As a result, the powerhouse was shut down on July 06, 2022.

Immediately after this incident, M/s China Gezhouba Group Company (CGGC), the contractor for the construction of civil works, was engaged in carrying out remedial works. The firm immediately mobilised to the site and a contract agreement was signed with it on August 5, 2022 and the work commenced on August 27, 2022. The Neelum-Jhelum hydropower project was executed at the cost of Rs430 billion and it started functioning in April, 2018 under the deep mountains in the AJK where the geology is neither predictable nor readable.

The project is one of its kind as 10 percent of the dam portion of the project is on the surface and 90 percent is underground with a waterway system comprising 52-km of tunnels. The project had generated electricity for four years at the cost of Rs9.1 per unit, but it came to a grinding halt on July 06, 2022, when its important underground tailrace tunnel was blocked. The project seeks diversion of Neelum waters through tunnels at Nauseri about 41 kms upstream of Muzaffarabad and outfall in Jhelum River near Chatter Kalas in AJK, where the powerhouse is located. The project generates 5.15 billion units annually and has so far contributed 18.2 billion units with annual revenue of Rs50 billion.