Senate body told: Govt seeking $1bn for NJHP’s completion by 2016

MUSHTAQ GHUMMAN

ISLAMABAD: The Senate’s Standing Committee on Water and Power on Friday was informed that the government was seeking $1 billion immediately for completion of Neelum Jhelum Hydroelectric Project (NJHP) by 2016.

In this regard the government is in touch with donor agencies including World Bank, Asian Development Bank and other financial institutions but there has been no commitment yet. If funds are not arranged soon then it will be difficult to complete the project by 2016, it was told.

The approved PC-I of the project estimated the cost at Rs 84.50 billion. The government approved imposition of surcharge at the rate of 10 paisa per unit on power tariff to generate 50 percent of local component of the finances. Balance equity is to be arranged through loans, sukuk bonds etc. Financing has been arranged in collaboration with Economic Affair Division (EAD) from Middle East donors. Exim Bank of People’s Republic of China has also agreed to provide $448 million as part of the foreign component for this project.

The committee was informed that the total cost of the project increased due to design changes which were dictated by the earthquake of Oct 2005, procurement of two TBMs for early completion of the project as well as other aspects in the interest of the project. The PC-I of the project revised the cost of the project to Rs274.88 billion and ECNEC has accorded the approval for the revised cost.

As of today, committed loans of $ 548 million from Exim Bank of China and Abu Dhabi Fund for Development (ADFD) have not been disbursed. The contractor has already served notice to stop work due to non payment of dues which have accumulated to Rs 4 billion. For smooth running of the project, Rs2 billion per month by the government of Pakistan as an interim measure is required till the signing of the loan agreement with Exim Bank and Abu Dhabi Fund. This amount is in addition to Rs500 million being collected through NJS.

Special Secretary Ministry of Water and Power Himayatullah and Wapda Chairman Raghib Hussain Shah briefed the committee on Kurram Tangi Dam and other hydro projects.

Chairman WAPDA informed the committee that security concerns over this dam were removed during a meeting with Corp Commander Peshawar and tendering of Phase-I of the project is ready. USAID approved the project and is meeting with World Bank today to discuss possible financing of the project. Total cost of this project is Rs59 billion while for land acquisition the Planning Commission is expected to release Rs500 million. The committee requested the presence of an official of the Planning Commission in the next meeting so as to discuss the issue of release of funds for Kurrram Tangi Dam.

Himayatullah informed the committee that study on Dasu dam would be completed by March 2013. The dam, after completion, will generate 4300 MW power and total cost of the project is $6 billion and the WB has suggested its completion in phases. The WB will provide $3.5 billion for construction of this dam and Phase-I of this project was expected to be completed soon, he added. The committee was informed that total cost of this project was $14.5 billion and no donor had indicated an interest in financing the dam.

Himayatullah further informed the committee that they were working under a consortium for Kurram Tangi, Dasu and Bhasha Dam and were formulating financing plans for these projects.

“Currently, Bhasha Dam Financing Plan is in progress. When we go to donors, they ask us for a financial plan that is why we are formulating it,” said Chairman Wapda.