Mahal hydropower project: Wapda, PPIB at loggerheads over execution control

Water and Power Development Authority (Wapda) and Private Power Infrastructure Board (PPIB) are reportedly scuffling with each other to take execution control of 590MW Mahal hydropower project, jointly established at the boundary of Azad Jammu and Kashmir (AJ&K) and Punjab, well informed sources in PPIB told the Business Recorder.
The sources said the controversy on Mahal between PPIB and Wapda was witnessed in the 90th meeting of PPIB Board presided over by the Minister for Water and Power Syed Naveed Qamar. The MD PPIB briefed the board that the 590 MW Mahal hydropower project is located on Jhelum River 4-5 km upstream of the confluence of Mahal River with the Jhelum River. The project is located on the dual boundary of AJK and Punjab.
In 2008, the project was advertised by the Government of AJK for development through Public Private Partnership (PPP), however, the project could not move forward. The Board of Investment (BoI) convened a meeting in November 2009 which was attended by the Prime Minister of AJK and the Wapda team wherein it was decided that the project should be implemented by PPIB as an IPP, upon receipt of NoC from the AJK government.
Later on, it was decided that project would be developed by Wapda through PPP mode with the concurrence of the AJK and Punjab governments. However, the modalities and a clear-cut road map to implement the project have not been finalised amongst the stakeholders, even after the passage of about one year.
The MD PPIB asked the board that due to locational issues in the project and financial constraints in public sector, the PPIB should be allowed to develop Mahal project as an IPP in consultation with the governments of AJK and Punjab pursuant to article 157(1) of the Constitution of Pakistan.
Chairman Wapda, Shakil Durrani stated that Wapda had the required expertise and was best-placed to implement the project in PPP mode. He did not agree with the proposal of processing the project in the private sector by PPIB. He revealed that the AJK government had already authorised Wapda to undertake the project on PPP basis with a share in equity being offered to the Punjab government. He argued that Wapda should be allowed to develop the Mahal project on PPP basis.
Minister for Water and Power, Syed Naveed Qamar, who is also the chairman of the board inquired about the availability of funds with Wapda for equity contribution in Mahal and other projects being implemented by Wapda. Chairman Wapda stated that funding of projects was not a problem for Wapda.
The representatives of the AJK and Punjab governments supported implementation of the project on fast track basis for which a firm timetable and the availability of resources needs to be ascertained. According to the PPIB, it accomplished a landmark achievement with the financial closing of its first hydro IPP. The 84 MW New Bong Escape Hydropower Project of Laraib Energy Limited (with major shareholding of HUBCO) achieved financial close on 4th December 2009.
New Bong Hydropower Project is Pakistan and Azad Jammu & Kashmir's first hydropower project in private sector and was termed "Project Finance Middle East Deal of the Year" by Euromoney in year 2009. The power project is located 7.5 km downstream of Mangla Dam, in Azad Jammu & Kashmir and is expected to be commissioned by May 2013. The New Bong Escape Hydropower Project assumes further importance because of its security package which has been prepared by PPIB, and it has been accepted by international investors and lenders and will now form the basis for future hydropower projects.