ISLAMABAD: The Dasu Hydropower (Phase-I) project would not be completed even by the revised schedule of May 2024, which is already delayed by almost seven years on account of delay in land acquisition due to incomplete land record, illegal construction, and inadequate security at site, and resulted in cost escalation of $200 million.
This was revealed by Joint Secretary of the Ministry of Economic Affairs Adil Akbar Khan, while briefing the National Assembly Standing Committee on Economic Affairs Division, which met under the chairmanship of Mian Najeebud Din Awaisi, here on Wednesday.
The joint secretary briefed the committee regarding the top three problematic projects relating to Federal Energy and Water Sector, including Dasu Hydropower Stage-I project; Jamshoro Power Generation Project, and Transmission Modernization project Phase I. These projects were delayed due to indecisiveness on the part of the government, land acquisition as well as fear of the National Accountability Bureau (NAB).
He informed the Committee that the Dasu Hydropower (Phase-I) project was signed on 25-8-2014 and its closing date was 30-06-2022, which was revised to 31-5-2022. Funds committed for the project amounts to $ 588.40 million, out of which, $ 313.00 have been disbursed with undisbursed amount to the tune of $ 275.40 million. The project has been delayed for almost seven years due to delay in land acquisition which was caused by incomplete land record, illegal construction and inadequate security at project site etc.
The cost of land acquisition increased from Rs19 billion to Rs37 billion. Other reasons for delay include delay in fulfillment of covenant on Operational Health Safety and slow decision making on the part of WAPDA. The Committee decided to visit the Dasu Hydropower Stage I project to see the physical progress on the project and state of issues.
The EAD officials apprised the committee that the World Bank-funded project was due to be completed in 2022; however, land acquisition problems have forced the project completion to be delayed till 2024. Even the process of land acquisition has not been completed since the work on the process begin in 2014, the officials lamented.
The locals were committed of free electricity which around 20 MW but it is not feasible for the government due to increasing circular debt and the expected demands from other areas as well. The locals are creating impediments for authorities by not letting them lay transmission lines on their lands. However, after hectic effort around 92 percent land is now acquired. It is the first project for which the World Bank is also providing finances for land acquisition. Wapda officials informed the committee that Rs144 billion have been acquired from seven commercial banks for the project as well. It was also revealed that land acquisition and rate is the responsibility of local administration and provincial government but in this case these matters were approved by the ECNEC at increased prices.
The EAD joint secretary informed the Committee that the Jamshoro Power Generation Project for installation of 600 MW supercritical coal-fired unit was signed on 12-02-2014 with original closing date 31-03-2019 and revised closing date is 30-6-2023. The Asian Development Bank has committed to finance $ 684.454 million, out of which $ 410.819 has been disbursed and undisbursed amount is $ 273.635 million.
Issues of the project include purchase of 100 acres land as ash pond land and signing of engineering, procurement and construction contract for LOT-II of the project.
The Provincial Cabinet, Sindh deferred the case of Purchase of Ash Disposal Land with the direction that fresh clearance report from Sindh Environmental Protection Agency be submitted as the previous one was provided in 2014 which will require further 4-6 months. The decision regarding the signing of engineering, procurement and construction contract for Unit II is pending at the Ministry of Energy (Power Division). The Committee recommended that the government should decide, without further loss of time, whether or not to install Jamshoro Power Generation Project Lot II.
The EAD joint secretary informed the Committee that the National Transmission Modernization Project was initiated for increasing the capacity and reliability of the National Transmission System and modernisation of key business processes of the NTDC.
The signing date of the project was 13-6-2018 and its closing date 31-01-2024 with a cost of $424 million, out of which, $ 36.1 million has been disbursed while non-disbursed funds amount to $ 388.90 million. The committee was informed that the project was delayed due to the late hiring of consultant and project management staff; delay in awarding of contracts and land acquisition issue for Islamabad West. The Committee recommended that the project management unit staff must be hired/appointed purely on merit. Moreover, the staff should be placed in the project from the beginning of project till its end.
Copyright Business Recorder, 2022