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Neelum Jhelum: China bank offers $300m for power project
By Our Correspondent
Published: July 16, 2014
The project has not achieved financial close so far and could be further delayed with expected increase in cost. PHOTO: FILE
ISLAMABAD:
Exim Bank of China has agreed to offer a loan of $300 million for completing the most critical Neelum Jhelum hydropower project, having a capacity of 969 megawatts, by 2016.
Water and Power Development Authority (Wapda) Chairman Zafar Mehmood disclosed this in a briefing to the Senate Standing Committee on Water and Power, headed by Senator Zahid Khan, here on Tuesday.
Mehmood, however, said Wapda still required $475 million to complete the project by 2016. “Borrowing from the private sector is on the cards as discussions in this connection are under way,” he said.
Furthermore, Rs57.4 billion will be arranged from power consumers through collection of a surcharge. Of this, Rs33 billion has already been received.
Mehmood pointed out that the surcharge, imposed at the rate of 10 paisa per unit, only met 10% of total expenditures and there were no arrangements for the remaining 90% expenses as the Saudi Fund, Kuwait Fund and other institutions had backed out of their commitments.
The prime minister also approved Rs14 billion for the power project, which had been released, he said.
Responding to a question, Neelum Jhelum Hydropower Project Chief Executive Officer Muhammad Zubair told the Senate panel that Rs14 billion had been released from the Public Sector Development Programme (PSDP) of last year, but no funds were earmarked for the project in the PSDP of current year.
He said the government set aside Rs48 billion for the project in 2013-14, of which Rs37 billion was spent. This year’s requirement is Rs72.9 billion, but no arrangement has been made so far.
He expressed fear that the project had not achieved financial close so far, indicating it could be further delayed with expected increase in cost.
Zubair said 64% of physical work had been completed with progress on the dam at 75%, tunnel 72% (total length of the tunnel is 45 km) and powerhouse approximately 100%.
On the occasion, the Wapda chairman asked committee members to visit the project site to see the progress. They are expected to pay the visit after August.
Senator Nisar Muhammad Khan emphasised the need for early completion of the project of national importance.
Munda Dam
Replying to a question about 800MW Mohmand dam and hydropower project, called Munda Dam, the Wapda chairman said it was economically feasible and all bottlenecks would be removed in coordination with the ministries concerned.
Committee members aired their reservations about the establishment of an inquiry committee on Munda Dam and said officials of the Planning Commission and finance ministry had assured of completion of the project after getting opinion of the law ministry.
Water share
The committee also discussed the Indus River System Authority’s (Irsa) role pertaining to distribution of water among provinces and the water and power minister’s remarks blaming Irsa for not releasing water. The issue came up for discussion after Senator Maula Bux Chandio remarked that the minister should not touch already settled issues and let Irsa do its duty.
The Wapda chairman, however, clarified that the minister had telephoned him after the controversy erupted and also wrote a letter to Wapda, asking it to coordinate with Irsa in streamlining the dysfunctional telemetry system in order to remove the confusion among provinces. He also read out the letter written by the minister.
“Water distribution is the sole responsibility of Irsa and Wapda cannot interfere in it,” he stated categorically.
The Senate panel also recommended removal of the chief executive officers of Islamabad Electric Supply Company and Gujranwala Electric Power Company, calling their work extensions illegal.
Committee chairman expressed his annoyance over absence of the water and power minister and secretary from the meeting.
Published in The Express Tribune, July 16th, 2014.
Like Business on Facebook, follow @TribuneBiz on Twitter to stay informed and join in the conversation.
By Our Correspondent
Published: July 16, 2014
The project has not achieved financial close so far and could be further delayed with expected increase in cost. PHOTO: FILE
ISLAMABAD:
Exim Bank of China has agreed to offer a loan of $300 million for completing the most critical Neelum Jhelum hydropower project, having a capacity of 969 megawatts, by 2016.
Water and Power Development Authority (Wapda) Chairman Zafar Mehmood disclosed this in a briefing to the Senate Standing Committee on Water and Power, headed by Senator Zahid Khan, here on Tuesday.
Mehmood, however, said Wapda still required $475 million to complete the project by 2016. “Borrowing from the private sector is on the cards as discussions in this connection are under way,” he said.
Furthermore, Rs57.4 billion will be arranged from power consumers through collection of a surcharge. Of this, Rs33 billion has already been received.
Mehmood pointed out that the surcharge, imposed at the rate of 10 paisa per unit, only met 10% of total expenditures and there were no arrangements for the remaining 90% expenses as the Saudi Fund, Kuwait Fund and other institutions had backed out of their commitments.
The prime minister also approved Rs14 billion for the power project, which had been released, he said.
Responding to a question, Neelum Jhelum Hydropower Project Chief Executive Officer Muhammad Zubair told the Senate panel that Rs14 billion had been released from the Public Sector Development Programme (PSDP) of last year, but no funds were earmarked for the project in the PSDP of current year.
He said the government set aside Rs48 billion for the project in 2013-14, of which Rs37 billion was spent. This year’s requirement is Rs72.9 billion, but no arrangement has been made so far.
He expressed fear that the project had not achieved financial close so far, indicating it could be further delayed with expected increase in cost.
Zubair said 64% of physical work had been completed with progress on the dam at 75%, tunnel 72% (total length of the tunnel is 45 km) and powerhouse approximately 100%.
On the occasion, the Wapda chairman asked committee members to visit the project site to see the progress. They are expected to pay the visit after August.
Senator Nisar Muhammad Khan emphasised the need for early completion of the project of national importance.
Munda Dam
Replying to a question about 800MW Mohmand dam and hydropower project, called Munda Dam, the Wapda chairman said it was economically feasible and all bottlenecks would be removed in coordination with the ministries concerned.
Committee members aired their reservations about the establishment of an inquiry committee on Munda Dam and said officials of the Planning Commission and finance ministry had assured of completion of the project after getting opinion of the law ministry.
Water share
The committee also discussed the Indus River System Authority’s (Irsa) role pertaining to distribution of water among provinces and the water and power minister’s remarks blaming Irsa for not releasing water. The issue came up for discussion after Senator Maula Bux Chandio remarked that the minister should not touch already settled issues and let Irsa do its duty.
The Wapda chairman, however, clarified that the minister had telephoned him after the controversy erupted and also wrote a letter to Wapda, asking it to coordinate with Irsa in streamlining the dysfunctional telemetry system in order to remove the confusion among provinces. He also read out the letter written by the minister.
“Water distribution is the sole responsibility of Irsa and Wapda cannot interfere in it,” he stated categorically.
The Senate panel also recommended removal of the chief executive officers of Islamabad Electric Supply Company and Gujranwala Electric Power Company, calling their work extensions illegal.
Committee chairman expressed his annoyance over absence of the water and power minister and secretary from the meeting.
Published in The Express Tribune, July 16th, 2014.
Like Business on Facebook, follow @TribuneBiz on Twitter to stay informed and join in the conversation.
