The Nation, Oct 1
ISLAMABAD – Foreign fanciers’ reluctance to release committed funds has risked timely completion of 969MW Neelum-Jehlum Hydropower project (NJHPC) facing Rs 90 billion shortfall as 59 per cent physical work is still pending.
Both the notable external financiers namely Export Import (Exim) Bank of China (committed $448 million) and Abu Dhabi Fund ($100 million), are dillydallying on the release of funds they had agreed to contribute to the critical project in wake of growing electricity shortfall in the country.
According to the document available with this agency, Exim Bank was waiting for final approval from the China State Council while the Abu Dhabi Fund was holding back its commitments for not that clear reason. It hinted that Fund was trying to link the Neelum-Jehlum financing with some previous UAE investment facing settlement issues.
“Therefore, NJHPC has not been able to open the Letter of Credit(LC) of US$ 113 million, for Islamic Development Bank(IDB) financed equipment,” the document said. “The Company managing the project would not be able to open the letter of credit unless the co-financing agreements are signed with both the Exim Bank of China and the Abu Dhabi Fund,” the document reveals.
According to the document the revised total cost of the Neelum Jehlum project without interest during construction is $2583.43million and the total financing and requirement from local source is $1291.71million each. The surplus deficit of Rs.90 billion of the Neelum Jehlum Project will be met through 50 per cent government’s share and the remaining 50 per cent would be met with foreign loans.
It further mentioned that the feasibility in detailed engineering design was completed in 1997 as per seismic parameters established before earthquake 2005.After earthquake revised PC-1 of the project escalated to Rs.274.882 billion recommended by Central Development Working Party (CDWP) for Executive Committee of National Economic Council (ECNEC) approval on 18th June, 2012 whereas the original PC-1 was approved in 2002 for an amount of Rs. 84.502billion.
According to technical experts, better way to get this project completed was to form a commercial consortium that could build the dam on Build Own and Transfer (BOT) basis. They referred to estimated annual revenue Rs 45 billion once the project is complete.
It clearly indicates that the total cost of the project Rs 274.882 billion was recoverable even on the existing electricity prices within five to six years. For that, they mentioned, the government needs to have an independent hydropower generation policy to encourage private investment in this field. According to the experts, the German think tank GTZ had already pointed out as much as 45000 megawatt potential of the Indus River alone in case an independent hydropower generation policy is in place in Pakistan.
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