Pakistan Water and Power Development Authority (Wapda) has clarified a news item, appeared in a section of the media, regarding increase in the cost of Neelum Jhelum Hydropower Project (NJHP).
2. The spokesperson said that 969-MW NJHP is being executed on priority to induct low-cost hydel electricity in the national grid, and to establish priority water rights over the Neelum and Jhelum rivers, in view of the construction of Kishan Ganga Hydropower Project by India upstream of NJHP.
Therefore, Wapda has geared up its efforts for on-schedule completion of NJHP in 2016 with the added safety parameters in the wake of devastating earthquake of 2005. This includes the cost of the two Tunnel Boring Machines imported from Harrenknecht Germany, which would result in completing the project 18-24 months earlier.
3. Dilating upon the contributing factors towards cost escalation, the spokesperson said that the initial project cost was based on the design, prepared before the earthquake. In the wake of the earthquake 2005, additional safety measures have now been incorporated on the recommendation of the consultants and the international panel of experts by redesigning the dam and civil works. Consequently, the cost of civil works has surged from Rs 41.03 billion to Rs 130.85 billion.
4. The other main reason for the increase in cost totalling Rs 32.57 billion has occurred due to the depreciation in the value of rupee with the US dollar since the period 2006.
5. The third important reason for the cost escalation of the revised PC-1 is increase of Interest During Completion (IDC) from Rs 29 billion to Rs 58 billion an addition of Rs 29 billion.
6. Likewise, no money was allocated for security arrangements in the original PC-1. Since a large number of foreigners are working on the project, it was inevitable to make proper security arrangements for them in the project area. This will cost another Rs 1.2 billion.
7. The spokesperson further said that there has been a significant increase in the cost of the land acquired for the project, compensation of houses and environment mitigation. Initially, Rs 770 million were allocated for the purpose but due to above increase on the demand of AJK Government, the amount has gone up to Rs 4.9 billion.
8. It is pertinent to mention that despite the delays in the early phases, every possible effort is being made for timely completion of the project, scheduled in 2016. At present, overall progress on the project is almost 27 percent. On completion, NJHP will provide about 5.15 billion units of electricity annually to the national grid. Benefits of the project have been estimated at Rs 45 billion per annum. The project will pay back its cost in about 07 years.-PR
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