ISLAMABAD: With expected increase in the cost of Neelum-Jhelum hydropower project up to Rs464 billion, the per unit price of electricity to be generated by the project is feared to hover at more than Rs20 per unit that will be more than the cost of electricity currently generated by high speed diesel (HSD) as fuel.
According to the internal working worked out by Wapda keeping in view the new PC-1 of the project under which cost of the project is being increased for fourth time up to Rs464 billion, the per unit tariff of electricity to be generated will cost at Rs20 per unit, whereas the exiting cost of electricity being generated on HSD stands at Rs18-19 per unit.
The top concerned official, when contacted, confirmed that with more increase in the cost of the project, the electricity generation cost per unit will be at Rs20 per unit, but it will be for initial years and after eight years when the project’s cost is recovered, the tariff of electricity will drastically come down to just Rs3.50 per unit. The project with the capacity to generate 969MW electricity will produce 5.1 billion units of electricity in 12 months.
The News tried to contact concerned authorities in the Ministry of Water and Power, there was no repose. The latest document available with The News showing the history of the project reveals that Executive Committee of the National Economic Council (Ecnec) in 2002 approved the power project of Neelum-Jhelum 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 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 further by 15 percent to Rs463.892 billion.
Authorities in 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) NJHPC Brig (R) Engineer Zareen confirmed that the project’s cost is 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, Zareen said the increase in cost is not yet finalised. Different workings are going on and most of them are wild guessing so far. However, he said, whenever the final revised cost of the project is okayed, then it will be sent to Planning Commission for approval.
The well-placed officials said the ministry wants the tariff of the project should be in single digit which seems not possible. They said that the government procures the loans at 2-3 percent but it relends to Wapda at 15 percent. And if the interest rate is reduced to the level of mark up at which the government arranges the loan, then the tariff of electricity will automatically tumble to affordable level.
However, top management of Neelum-Jhelum Hydropower Project Company has not yet prepared any petition seeking tariff from Nepra. Once the cost of the project being revised for fourth time gets the nod from Ecnec, then the petition will be dispatched to Nepra for the tariff.
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