Ali SyedThursday, November 01, 2012 - Islamabad—Islamic Development Bank (IDB) has expressed its dismay over massive rise in the cost of Neelum-Jhelum hydropower project from Rs 84 billion to Rs 274 billion and refused to extend loan of Rs 90 billion more, a senior official at Ministry of water and Power told Pakistan Observer.
“The bank said that it would provide Rs 45 billion only if the government generates the Rs 45 billion from its own resources. The bank said that Finance Ministry will have to come up with the guarantee that it would provide Rs 45 billion extra from its resources.”
“The bank said that if the project is provided by the government Rs 2 billion in every month then it would release the loan accordingly every month.”
Lt General (Retd) Mohammad Zubair, chief Executive of Neelum-Jhelum Hydropower project, however, clarified saying that in 2002, the cost of the project was Rs 84 billion, but in 2005, the country experienced the catastrophic earthquake owing to which design of the project is re-modified keeping in view the fault lines passing through the site of the project and its scope has also increased. So much so, the dollar picked its weight a lot owing to which the cost of project has increased to Rs 274 billion.
To a question Gen Zubair said that he needs Rs 2 billion every month to continue the existing pace of construction at the project site. Meanwhile Wapda Chairman Syed Raghib Hussain also met with Prime Minister and sensitized about the increasing constraint of liquidity with the project. He said that Central Power purchase Agency (CPPA) owes to pay Rs 87 billion against the electricity being provided to CPPA from Wapda Hydel Company. Wapda provides electricity at the Rs 1.54 per unit, but CPPA is not paying the dues of Wapda. “If CPPA ensures Rs 2 billion per annum for the project, then the ongoing construction would continue with existing pace.” Meanwhile, the Chinese company which is responsible for completing the project has refused to operate the high tech tunnel boring machines (TBM) unless the insurance cover of $ 15 million is arranged. “Now we are trying from pillar to post to get the insurance cover of $ 15 million so that the two TBMs could be operated soon. He said that both the high tech machines have been imported at the cost of $93 million and if the said machines get operational, then Pakistan would be able to complete the project by 2016.
Gen Zubair said that project badly needs $ 1 billion to get completed by 2016 and if the said amount is not arranged in time then the project would delay and India would easily get the water priority rights over Neelum river. The Chief Executive told the participants of the meeting that 30 percent work has got completed. He said that China had committed $ 448 million which is not yet delivered.