Neelum-Jhelum surcharge of Re0.10per unit in power bills to be abolished

ISLAMABAD: The government is set to abolish tomorrow (Friday) Neelum-Jhelum (NJ) surcharge of Re0.10 per unit from the electricity bills being collected from every consumer since January 4, 2008.

For building Neelum-Jhelum hydropower project, the government kept on receiving Rs6 billion per annum under the head of NJ surcharge. The fourth revised PC-1 of the project shows that the cost of project went up to Rs506 billion but later on the project completed with actual cost of Rs416 billion.

The Power Division is going to pitch its summary in the Economic Coordination Committee (ECC) meeting tomorrow (Friday) seeking approval of revocation of Neelum-Jhelum surcharge of Re0.10 per unit from the electricity bills.

The government had imposed Neelum-Jhelum surcharge of 10 paisa per unit for building Pakistan’s most strategic project of Neelum-Jhelum hydropower project having the capacity of generating 969 MW of electricity at average tariff of Rs8.50 per unit.

The Neelum-Jhelum hydropower plant is part of the run-of-the-river hydroelectric power scheme in Azad Kashmir, designed to divert water from the Neelum River to a power station on the Jhelum River.

The power station is located 42-km south of Muzaffarabad, and has an installed capacity of 969 MW. Construction on the project began in 2008 after a Chinese consortium was awarded the construction contract in July 2007. After a delay of many years, the first generator was commissioned in April 2018 and the entire project was completed in August 2018 when the fourth and last unit was synchronised with the national grid on August 13 and attained its maximum generation capacity of 969 MW on August 14, 2018. It generates 5,150 GWh (gigawatt hour) per year.

Interestingly, the project achieved the commercial operation date (CoD) in April 2018 and the government must have done away with the surcharge on the day when project started operating commercially, but unfortunately, the electric power distribution companies (Discos) kept on charging the Neelum-Jhelum surcharge for two and half years knowing the fact that Neelum-Jhelum hydropower project got completed and commissioned in April 2018. Discos are not entitled to keep the amount of Rs15 billion with themselves.

All the Discos collected Rs15 billion in two and half years from the consumers under the head of NJ surcharge but they did not hand over the amount to either Wapda or Neelum-Jhelum hydropower company Ltd (NHPCL).

The PAC, which met on September 2, 2020 under the chairmanship of Rana Tanveer Hussain, was informed by the office of the Auditor General that the government was collecting the surcharge even though the Neelum-Jhelum Dam had been completed two years ago.

The government, through a notification on January 4, 2008, had imposed the NJ surcharge on electricity consumers till December 31, 2015. But despite the lapse of the period (2008-2015), the authorities continued to collect the NJ surcharge.