KP agrees to withdraw case against Suki Kinari Hydropower project

Khyber Pukhtunkwa government agreed to withdraw its court battle against the construction of 840MW Suki Kinari Hydropower Project at Kunhar River in Manshera.
Documents available with Business Recorder reveal that the provincial government of KP has conveyed its agreement to withdraw its legal challenge to the Ministry of Water and Power, Private Power Infrastructure Board and related departments in the best interest of the country.
The Kinari Project is a consortium of S.K Hydro (Pvt) Ltd, Eden Enterprises, Malaysia, Faysal Bank UBL, Snowy Mountian Engg, Australia, and Don Fang China. The estimated cost of the project is $1.13 billion, which is partially funded by the World Bank. An official of the Ministry said that the long litigation would raise the earlier estimated cost of the project.
The feasibility study of the project has already been approved and NEPRA has issued a generation license while 5.94 cent tariff was fixed in November 2008. The Ministry asked the sponsor companies to fulfil all requirements for the implementation of the project.
It has been learnt that the provincial government of Khyber Pukhtunkhwa (KP) filed a petition in High Court in March 2009 against federal government. In a petition, provincial government had argued that federal government's decision to award the contract of 840MW Suki Kinari Project over Kunhar River in Mansehra was illegal and unconstitutional.
In the petition it was prayed that the right of the provincial government to build this project and award of construction contract was not honoured and amounted to depriving the province of its profit cost. Under the law the dam has to come under the administration of the province after 30 years.
Whereas, the federal government had claimed that the proposed SKHP should be constructed by the federal government, as the provincial government did not have resources to afford cost of the project. The federal government further said it should be considered as national asset and could not be abandoned as the country has already been facing power shortage.