Nepra issues show cause notice to Wapda chairman on Tarbela-4 scam

ISLAMABAD: The National Electric Power Regulatory Authority (Nepra) has issued a show cause notice to the Water and Power Development Authority (Wapda) chairman on the issue of Tarbela-4 project, whose very execution and premature inauguration caused around Rs100 billion loss to the national exchequer.

Informed sources said that after having being dissatisfied with the explanation of the chairman on the matter, Nepra first rejected the authority’s version and then finally issued the show cause notice.

The notice, according to the sources, inform the chairman that Wapda’s decision to inaugurate Tunnel-4 Project of Tarbela, caused huge financial loss. The notice will give the final opportunity to the Wapda chairman and the authority to explain their position to the satisfaction of Nepra, failing which the chairman and Wapda could be fined upto Rs100 million.

It is said that the Nepra had initially sought report from the Wapda chairman after the issue was highlighted and brought to the notice of the authority (Nepra). Nepra was not satisfied with the Wapda’s report following which an explanation was sought from the chairman. Nepra was also not convinced with the explanation and rejected the same following which the show cause has been issued.

The Wapda chairman, when approached by this correspondent on Tuesday, was admitted to a Karachi hospital and recovering from his knee operation. He was courteous enough to talk to The News on the issue despite not being well. He said that Wapda would explain its position to Nepra in a few days’ time.

The sources also confirm that the Chairman Wapda is expected to file his reply to the show cause notice next week. Nepra, it is said, may decide the case in the next few weeks.

Last year, Prime Minister Imran Khan had ordered inquiry while taking notice of The News report about loss of billions of rupees incurred because of pre-mature inauguration of Tunnel-4 of Tarbel Dam.

The investigation report determined from the statements of M(P), Adviser Projects Wapda, CE (O&M) and the PD T4HPP that the date of inauguration was made without their consultation and also not at the Authority level of Wapda, rather, it was done at the level of the Wapda chairman.

The report calculated a total loss of US$753 million (over Rs100 billion) during the execution of the Tunnel-4 Tarbela project and it included that the losses incurred because of serious faults occurred owing to the premature inauguration of the project in March 2018.

The Wapda chairman, however, was of the view that the investigation report was not based on facts. He had told The News a few months back that the inauguration decision was taken strictly in accordance with “commercial coordinated schedule” in June 2017 as was agreed between three stakeholders- employer, consultants and the contractor.

The investigation report said, “The statements of Chairman Wapda and Adviser Projects Wapda provide that the project completion dates were fixed to save the project from the conditions of time at large and these dates were fixed in July 2017 stating inter alia the completion of Unit 17 on 25-02-2018. With this in view, the date of operation of Unit 17 stands established to be fixed through a consultative process of the parties to the Contract vis. The Employer (Wapda), the Consultants (T4CJV) and the Contrators (Civil and EM Contrators). The unit 17 was subsequently inaugurated on 10-03-2018. Notwithstanding above, it is also determined from the statements of M(P), Adviser Projects Wapda, CE(O&M) and the PD T4HPP that the date of inauguration was made without their consultation and also not at the Authority level of Wapda, rather, it was done at the level of chairman Wapda.”

The report did not say that the premature inauguration was done following the pressure from the then PML-N government or the prime minister. Instead, it said that on the eve of inauguration, Wapda submitted the following talking points for the then prime minister, Shahid Khaqan Abbasi: “Commissioning of Tarbela 4th Extension Hydropower Project is yet another historic milestone achieved by the government to add 1410 MW in the National Grid. Completion of this great project within time and cost always held top priority of the government. While congratulating the whole nation on this remarkable achievement, I would specially appreciate the untiring efforts of the Project Team comprising Wapda staff, project consultants, all the contractors and other stakeholders whose selfless devotion enabled to timely complete the project.”

The Investigation Committee (IC), constituted by the prime minister into losses incurred because of pre-mature operation of Tunnel-4 of Tarbela Dam, unanimously determined that the total loss occurred during the execution of the project comes to $753.7 million.

According to the report, this loss includes: “US$350 million estimated and projected by Wapda for the years 2017 & 2018, US$48 million paid to the Civil Contractor on account of acceleration under the VO-02 R2 and US$5.7 million under CO-10”. Besides, the report added, another loss of Rs70 million incurred by Wapda to lift the gates of Draft Tubes stuck in the mud after the refusal of the Civil Contractor.”

In regard to the loss to the national exchequer due to inauguration of the project before time, the report said: “It is important to mention that there is a further matter which needs probe relating to signing of Variation Order in March 2015 for making payment to the Contractor equivalent to US$51 million in order to accelerate the project completion from March 2018 to June 2017.”

The report added: “It has also been brought before the IC that despite making substantial payments of the order of US$48 million on account of VO-02 R2, not a single unit could be made ready for generation up to the end of the high flow season of 2018 let alone 2017.

“The annual energy generation from T4 HPP as estimated at the design stage was 3,840 million units. Because of having no energy in the high flow season of 2017 the associated revenue loss becomes Rs30 billion at the rate of generating cost of Rs7.814 per unit of electricity, despite spending US$ 48 million extra to the revenue equivalent to Rs30 billion,” the report added.

It is relevant to mention here that months after the submission of the inquiry report to the prime minister, the Minister for Water Faisal Vawda pointed out to the prime minister that the inquiry report was not signed by a member of the probe team who did not agree to its conclusions.