The government is said to be reluctant to accord approval to 10-paisa raise in Wapda's power tariff, conceded in principle by ECC on August 17 for generating an additional amount of Rs 6 billion per annum for financing the 960-MW Neelum-Jhelum hydropower project, due to political considerations, says a Recorder Report.
According to informed sources, the Ministry of Water and Power forwarded a summary to the cabinet about two months ago, but the issue has yet to figure on the cabinet's agenda.
It was agreed at the ECC meeting that as the project was of vital national interest, particularly in the context of sharing out the water of River Jhelum on which India is constructing Kishanganga hydroelectric project on its side of the border, it should be given top priority.
Wapda accordingly invited bids for the project on the basis of buyer's credit as per ECC's decision of February 7. After appraisal of the bids, the utility approved and forwarded the contract to the lowest bidder, CCGC-CMEC of China, for Rs 90.885 billion, out of which an amount of Rs 5.27 billion, needed for mobilisation of advance to the contractor and consultant in 2006-07, has already been provided to Wapda.
The ECC then decided that the proposed 10-paisa raise should be extended to the consumers of Kesc as well. Moreover, the debt/equity ratio was set at 50:50, and the quantum of paid-up capital was suitably enhanced, keeping in view the funding requirements.
The mega project involves diversion of Neelum flow at Nosairi in AJK, through construction of a 47-km tunnel, to take water to the power station. Approved by Ecnec way back in 1989 at an estimated cost of Rs 15.012 billion, the estimate of the project's cost went up to Rs 95.36 billion in 2006, which has since been revised to Rs 128.8 billion, including local component of Rs 81.9 billion, and foreign exchange component of Rs 46.5 billion.
As India has already started work on Kishanganga power project, any further delay on our part will irretrievably compromise our vital national interests, particularly when we are already caught up in a tightening energy squeeze. There is, meanwhile, a need to get certain facts straight about the Kishanganga hydropower project.
According to the Water Treaty of 1960, India is entitled to construct the dam only on the run of the river, as it cannot build the dam by diverting river's flow. If India diverts the flow in a bid to generate electricity by building the power project, Pakistan will receive one-third less water due to the construction of the dam. It will therefore constitute a grave violation of the Indus Basin Water Treaty.
Meanwhile, it is said that a major cause of delay in implementation of the project on our part is the soaring land prices in AJK. And it is feared that such impediments could further delay the implementation of the project, thereby jeopardising our bid to exercise our water priority right under the Indus Basin Treaty.
The Treaty says that the country first completing the hydroproject on Neelum will automatically gain priority right. And India is reported to have completed 75 percent of the work on the diversion tunnel. Though it will be politically an unpopular decision, the government should go ahead with the levy of 10 percent surcharge.
There is an urgent need for Islamabad to quickly firm up financing for the Neelum-Jhelum project, particularly as India is simultaneously pressing ahead with the construction of the 450-MW hydropower project Baghlihar dam on the Chenab River in IHK, in violation of the Indus Treaty. The project will be the first of its type utilising downstream Neelum river waters.
The diversion of water will allow flow of water into the Wullar Lake, as planned by India, in violation of the Indus Water Treaty. The government should mount two initiatives simultaneously to make up for the loss of time. First, it should arrange funds for the dam on an emergency basis. Second it should approach the World Bank or any other forum of arbitration to intervene in the matter.
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