Finance Minister Ishaq Dar has reportedly not cleared the World Bank's favoured $7 billion Dasu hydropower project because of differences in cost estimates of key stakeholders, well informed sources told Business Recorder. The project was discussed by the Executive Committee of National Economic Council (ECNEC) in its previous meeting but could not sail as Planning Commission, Water and Power Ministry and Water and Power Development Authority (Wapda) presented different cost estimates.
The meeting was informed that construction of 4320 MW run-off-river hydropower project was being proposed on main Indus river in District Kohistan, Khyber Pukhtoonkhwa. The main objective of the project was to provide cheap electricity in the local area as well as to the national grid thereby bringing down the demand-supply gap of electricity. The stages and phases of the project were also explained. It was stated that the total cost of the project was Rs 685.4932 billion with a Foreign Exchange Component of Rs 358.8253 billion. The PSDP allocation (2013-14) for the project is Rs 1.745 billion.
It was further stated that the CDWP in its meeting held on January 16, 2014 considered the project and recommended, in principle, for ECNEC's approval with a condition that the sponsors would submit a modified PC-I after incorporating the following: (i) stage-II of the project may be categorically linked with construction of Diamer Bhasha Dam and the same be cleared/elucidated in the modified PC-I. Similarly, corrected stage/phase wise calculations of Internal Rate of Return, benefit cost ratio and other assumptions supporting the viability of the project be mentioned in the modified PC-I; (ii) cost of land acquisition be rationalised on actual basis as decided in the CDWP's earlier meeting on November 29, 2013. Moreover, the cost of relocation of KKH in the vicinity of proposed hydel projects (ie Dasu, Diamer & Bunji) be rationalised by WAPDA in consultation with National Highway Authority (NHA) and other concerned authorities; (iii) a separate PC-I for evacuation of power from the proposed project be submitted and the cost of transmission line accordingly subtracted from the subject PC-I; and (iv) recurring cost of the project be rationalised in comparison with existing hydro power projects like Mangla & Tarbela HPPs. It was pointed out that the Ministry of Water and Power indicated its inability to modify the PC-I and desired that the PC-I be placed before the ECNEC. Similarly, WAPDA has not complied with the observations/conditions of CDWP decision including rationalisation of the project cost. However, considering the importance of the Dasu Hydropower Project, it was placed for consideration of the ECNEC with observations of CDWP.
After detailed discussion and arguments and counter arguments, the Finance Minister deferred consideration of the summary submitted by Ministry of Planning, Development and Reform on "Dasu Hydropower Project" with the direction that Ministries of Water and Power, Planning, Development & Reform and WAPDA should be on the same page with regard to the cost of the project, its viability and period of implementation. ECNEC also directed that the summary relating to acquisition of land, resettlement and pre-construction activities of Dasu hydropower project be integrated with the main summary of Dasu project.
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