Neelum-Jhelum power project cost likely to go up to Rs464 bn

Water and Power Ministry,
Wapda in process of revising the cost of project fourth time

ISLAMABAD: The cost of Rs404 billion Neelum-Jhelum Hydropower project is going up to Rs464 billion and to this effect the concerned authorities in Wapda are in the process of making a revised PC-1 of the project, reveals an official document.

The project is being branded as the new wonder of Pakistan because 10 percent of the project is on the surface and 90 percent is underground consisting of 51.3 kilometers long tunnels. The cost of the project is being revised for the fourth time. 

The latest document available with The News showing the history of the project reveals that the Executive Committee of National Economic Council (Ecnec) in 2002 approved the Neelum-Jhelum Hydropower project at the cost of Rs84.502 billion. The cost of the project scaled up to Rs277.502 billion, which the Ecnec approved in 2012 and then its cost again surged up to Rs404.331 billion in 2015 and now the cost is being revised up to Rs463.892 billion. In 2015, the project’s cost was hiked by 86 percent and now it is being increased by 15 percent further to Rs463.892 billion. 

The authorities in the ministry and Wapda are all set to pitch the PC-1 of the project in the Planning Commission with revised cost of the project up to Rs464 billion, officials confirmed to The News.

When contacted, chief executive officer (CEO) of NJHPC  Brigadier (retd) Engr Zareen confirmed the project’s cost was being raised and to this effect the authorities concerned are working on it. When asked if the cost is being jacked up to Rs464 billion, Brig Zareen says the increase in cost is not yet finalised. Different workings are going on and most of them is wild guesses so far. However, whenever the final revised cost of the project is okayed, then it will be sent to the Planning Commission for approval. 

Brig Zarin says officials of the Planning Commission in2015 cut down the fee of the consultant by Rs 10 billion which is why the cost of the project was slashed down from Rs414 billion to Rs404 billion. When asked for the details in the expected increase in the cost of the project, Brig Zarin said he is not in position to exactly explain. 

However, the officials said that in 2002, the cost of the project was Rs84 billion but after the 2005 earthquake, the project’s design had to be modified keeping in view the fault lines passing through the project site and the scope of the project also increased. Furthermore, due to the rising value of dollar the cost of the project has escalated to over Rs277 billion. In 2015, the cost of project was revised upward by 86 percent to Rs404 billion mainly because of the inclusion of duties, taxes and IDC (interests during cost) till completion of the project and the cost of the consultant. The 86 percent increase in the cost of the project has increased because of IDC. 

Under the latest scenario, in the head of escalation and indexation (current indices), the cost is being increased from Rs61.2 billion in 2015 to over Rs 80 billion in 2016. The officials also indicated that the cost of the project is being increased because of some tunnel bursts happened in the past.

Wapda officials went on to say that Neelum Jhelum Hydro Power Project is a world class hydro power facility being executed under the deep mountains where geology is neither predictable nor readable. Never in Pakistan has such a complex project, which is eighty percent underground been developed. There are strategic water issues involved and the wonder is why it was not developed earlier. 

These types of mega projects can only be executed with speed if projects are planned well and huge outlays are made available in time and political will prevails with a consistent thrust. All said and done, NJHPP has achieved 85.5% progress and is heading towards completion despite all delays in release of funds, weather conditions, non availability of power during early stage of construction and delays in land acquisition.

The project has been conceived very well starting from 1983-85 where WAPDA itself identified the proposed location for NJHPP in which Wapda team under the caption of NJ – Kohala Hydel Complex was conceived and then M/s Nor Consult (Norway) carried out a fresh feasibility study in 1993. These recommendations led to the finalised study (Dec 1996) where the project texture was enhanced from 550 mw to 969 mw and power house shifted to Chattar Klass. 

The project has so far been completed by over 86 percent and has entered in the terminal stage for which the credit goes to Gen (R) Muhammad Zubair. Member of the Panel of Experts, Martin Wieland in his communication lauded the services of former CEO of NJHPPC Gen (R) Moahmmad Zubair in complete the project by 85 percent.