150 megawatts Patrind Hydropower Project in doldrums: dispute over 'water use charges' between KP, AJK

Any further delay in resolving a long pending dispute of 'water use charges' between Azad Jammu & Kashmir and Khyber Pakhtunkhwa may shelve 150 MW Patrind Hydropower Project, located near Muzaffarabad in AJK.
The documents made available to the Business Recorder show that three renowned Korean companies having 49 percent share in the $331 million Independent Power Project (IPP), have shown serious concern in this connection, saying that the project execution companies would be unable to complete it within the stipulated cost.
The reason, they said, any further delay in the execution would also escalate the cost of construction. The federal government failed in convincing both the governments to agree on the distribution of net hydel profit despite several attempts. The AJK government filed a petition with federal government claiming that hydro power project should be handed over to it after 25 years, as per power policy 2002. But KP has not shown any flexibility in accepting the demand of AJK government. The project was initiated in 2005 on Kunhar River of KP and its water was diverted to fall from height through a tunnel for power generation on AJK side.
The consortium of K-Water, Sambu Construction and Daewoo E&C and UAE's Al-Ghurair Group signed the agreement for share purchase and shareholding of the project. The project is expected to be financed by Asian Development Bank and Korean Export-Import Bank on a non-recourse basis. The signing ceremony of the project to be set up at Muzaffarabad was held in Korea. Although, the Private Power and Infrastructure Board (PPIB) issued Letter of Intent in 2005 in favour of the Star Hydro Ltd, the project company and power tariff was approved by National Electric Power Regulatory Authority (Nepra) under the power policy 2002, but federal government is not optimistic of kicking off the project after examining the stand of both the governments ie, AJK and KP over net hydel profit. The project is a run-of-river hydel power development project catering the energy need of 200,000 households of Muzaffarabad area, along with promoting regional economic development of AJK.