Saturday, September 29, 2012
From Print Edition
ISLAMABAD: Pakistan’s Neelum-Jhelum hydropower project needs $1 billion to be completed by 2016 and if the amount is not arranged in time, then the project will be delayed and India will get water priority rights of the Neelum River, said Lt General (retired) Zubair, chief executive of the Neelum-Jhelum Hydropower Company here on Friday.
He told a meeting of the National Assembly’s standing committee on economic affairs that almost 30 percent work on the project has been completed. China, he said, had committed $448 million for the project, which were not received as yet. This particular loan case is lying with the State Council of China for long and Pakistan expects the release of funds soon.
If the project is not completed by 2016, India will be able to complete the Kishenganga project on the Neelum River, which will give India water priority rights over the Neelum River under the 1960 Indus Water Treaty.
According to Gen Zubair, 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 scale of the project also increased. Furthermore, due to the rising value of dollar the cost of the project has escalated to Rs274 billion.
In response to a query, he said that almost Rs2 billion per month is required to continue the existing pace of construction at the project site.
Meanwhile, Wapda chairman Syed Raghib Hussain has met the prime minister to discuss the financial crunch. Gen Zubair said that the Central Power Purchase Agency (CPPA) owes Rs87 billion in electricity bills to Wapda, which provides electricity at Rs1.54 per unit, but the CPPA has failed to pay Wapda’s dues.
“If the CPPA ensures Rs2 billion per annum for the project, then the ongoing construction will continue at the existing pace,” he said. “Apart from $448 million, the project also needs $520 million, which means that it needs almost close to $1 billion to be completed in time.”
The chief executive came up with another proposal to hike the Neelum-Jhelum surcharge on every unit in electricity bills to arrange more funds for the project. As it is, the government has been charging Rs0.10 per unit as Neelum-Jhelum surcharge from every electricity consumer.
In addition, he revealed that the Abu Dhabi Fund had earlier committed $100 million loan for the project, but has now refused to release the amount. As a matter of fact, it has linked the release of funds with resolving the problems some UAE companies are facing in Pakistan.
The Islamic Development Bank (IDB), he said, has also linked its funding with the release of $448 million by the Export-Import (EXIM) Bank of China. The IDB had committed a $357 million loan for the project. Some of it has been disbursed, however, it has linked the release of the remaining installments with the release of $448 million by the Chinese EXIM Bank. They believe that if the main donor is reluctant then it will be difficult for them to fund the project.