Heads may roll as Wapda causes $753m loss in Tarbela-IV project

ISLAMABAD: The Investigation Committee (IC), constituted by the prime minister on losses incurred because of pre-mature inauguration of Tunnel-4 of Tarbela Dam, unanimously determined that the total loss occurred during the execution of the project comes to $753.7 million (around Rs100 billion).

The IC was set up by the premier while taking notice of The News report dated Sept 15, 2018 about the huge losses incurred because of premature inauguration of the 1410 MW Tarbela-IV project in March 2018 done by the Wapda management only to please the then ruling PML-N government.

The IC report that has recently been submitted to Prime Minister Imran Khan said that all the members of the IC have unanimously determined that the sum total of loss occurred during the execution of this project comes to $753.7 million.

According to the report, this loss includes “$350 million estimated and projected by Wapda for the years 2017 & 2018, $48 million paid to the civil contractor on account of acceleration under the VO-02 R2 and $5.7 million under CO-10”. Besides, the report added, another loss of Rs70 million incurred by Wapda to lift the gates of draft tubes stuck in the mud after the refusal of the civil contractor.

With regard to the loss to the national exchequer due to inauguration of the project before time, the report said, “It is important to mention that there is a further matter which needs probe relating to signing of variation order in March 2015 for making payment to the contractor equivalent to $51 million in order to accelerate the project completion from March 2018 to June 2017.”

The report added, “It has also been brought before the IC that despite making substantial payments of the order of $48 million on account of VO-02 R2, not a single unit could be made ready for generation up to the end of the high flow season of 2018 let alone 2017.”

“The annual energy generation from T4 HPP as estimated at the design stage was 3,840 million units. Because of having no energy in the high flow season of 2017 the associated revenue loss becomes Rs30 billion at the rate of generating cost of Rs7.814 per unit of electricity, despite spending $48 million extra to the revenue equivalent to Rs30 billion,” the report added.

While discussing the premature inauguration of the project, the report lamented that the most worrisome aspect of the alarming state of affairs in Wapda is that the saner voice and expert advice of Independent International Panel of Experts (IPOE), especially engaged on hefty payments from the national exchequer with acclaimed global contemporary technical knowledge and insight as well as of-reputed series of explicit and unequivocal warnings by the World Bank, not only disregard and project timelines were not rescheduled to the flood season of 2018 i.e. June/July 2018 in order to doubly reassure smooth and hazard-free operations.

Another matter of concern is that Wapda did not even bother to respond to relevant communications from the World Bank, whose letter dated 13-9-2018 said, “The Bank has since then not received further information on the matter. The Bank via email requested an update on August 17, 2018, but with no response.”

The IC also determined that the availability of water quality suitable for operating the units as being the foremost pre-requisite was not available, hence the operation of units in absence of favourable environment was a premature action decided by Wapda, consultants and contractors.

The IC report clearly said the Wapda had disregarded the piece of advice of IPOE and World Bank which had alerted the authority at that time in the month of Feb 2018 that water will not be available.

The report says that the wet testing of unit 17 was started on Feb 20 and completed on March 1, 2018 on short runs of turbine mostly ranging from 00:03 minutes to 00:45 minutes on silty and muddy water flowing through it. Turbine remained out of operations from March 3 to March 7 and was in operation on March 8 for 0:02 and 0:35 minutes and on March 9 for 0:45 minutes.

“On the day of inauguration, the turbine was synchronised only for 3 minutes and remained shut till June 7, 2018, which is consistent with the situation as not to operate the units for sustained operation due to silt in the water.”

The IC is of the opinion that the advice to the then prime minister to proceed with the commissioning and subsequent inauguration was contrary to the advice of the World Bank and IPOE. The report also lamented that after the damage was done, a third party contractor instead of EM Contractor was mobilised to carry out the rectification work.

The IC proposed the prime minister the following actions:

i) Necessary directions may be issued to the Auditor General of Pakistan for holding a comprehensive performance audit of T$ HP within 60 days for determination of the following, among others, to carry out: a) An overall performance audit of the project. b) Specific to the matters spelled out and losses worked out…. (in the report). c) By fixing responsibility and apportioning the corresponding loss caused by the respective individual/entities. d) Any other matter relating to or/and ancillary to the above.

ii) In the light of the report of the performance audit, the decision for any criminal inquiry into the matter by FIA or NAB may be decided.

The News had reported that only due to the premature inauguration of T-4 in March 2018 by the Wapda to please the then PML-N PM had culminated in operational losses of more than Rs25 billion over the three-month annual flood season of 2018.

It was reported by this newspaper that Wapda had inaugurated the $850 million Tarbela-IV project in March, despite warnings from the German engineering consultant, Voith, not to operate the turbine of the fourth tunnel at Tarbela Dam while its reservoir was at the dead level. However, the Wapda went ahead and ran the turbine for several hours during the inauguration of the project by the-then prime minister, Shahid Khaqan Abbasi. As a result, mud and slurry from the practically empty reservoir filled part of the tunnel, rendering three turbines inoperable.

Since the Tarbela Dam reservoir was at the dead storage level in March, the only little water available for use during the inauguration ceremony was located in the flushing inlet and full of silt. The result was a daily loss of Rs280 million.