Neelum-Jhelum surcharge: government to collect Rs 57 billion from power consumers

The federal government would collect Rs 57 billion from the electricity consumers through the levy of a Neelum-Jhelum surcharge at the end of this year while the cost of Neelum-Jhelum Hydro Power Project has increased from Rs 274.9 to Rs 404.32 billion. The Ministry of Water and Power informed this during its briefing on Neelum Jhelum Hydro Power Project to the National Assembly Standing Committee on Planning, Development and Reforms which met with Abdul Majeed Khan Khanan Khail in the chair at the Parliament House on Tuesday.
The National Highway Authority (NHA) Chairman Shahid Ashraf Tarar informed the Standing Committee that the Lowari Tunnel Project would be completed in March 2017 and the Prime Minister would inaugurate the project in April 2017. He maintained that the Neelum Jhelum Hydro Power Project would be completed in February 2017. The members of the committee expressed serious concern over unnecessary delay in Neelum Jhelum Hydro Power Project and said that the project might not be completed within in next year due to its slow pace.
The sources said the surcharge collection began in 2008 and will continue till the end of 2016. The entire cost of the project is being met through loans from banks, including Exim Bank and through collection of surcharge from electricity consumers. According to demounts, second revision of PC-I of the project was approved by ECNEC on 03-07-2013 at a total cost of Rs 274.88 billion with Foreign Exchange Component (FEC) of Rs 158.37 billion. The third revision of PC-I of the project was also approved by the ECNEC on 19-12-2015, a total cost of Rs 404.321 billion.
A joint venture of five international and national firms was engaged as Neelum Jhelum Consultants comprising (i) Montgomery Watson Harza (USA) (ii) NORPLAN, Int. (Norway) (iii) National Engineering Services (NESPAK), Pakistan (iv) National Development Consultants (NDC), Pakistan and (v) Association Consulting Engineers (ACE), Pakistan.
Construction contract was awarded to a Joint Venture of China Gezhouba of Companies and China Machinery Corporation (CGGC-CMEC) at a cost of Rs 90.90 billion and construction work on the project commenced on January 30, 2008.
About the project implementation status, the documents further revealed that construction activities are at the critical stage, with day and night working in shifts is being simultaneously executed on all sites. The progress at Dam site is 84.5 per cent and 66.35 km (96.71 per cent) of tunnels has been excavated. 20.16 km out of 26.64 km of HRT Concrete Lining has been completed (77.10 per cent). The Powerhouse has been excavated 100 per cent and concrete work (99 per cent) is in progress. Physical progress of the project is 85.3 per cent while financial progress is 63.74 per cent (as per 3rd Revised PC-I 2015).
The issues of the project are (i) Due to non-signing of Exim Bank Loan of US $576 million, an amount of $114.273 million is payable to the contractor by NJHPC, payment could not be made due to non-availability of foreign component and (ii) EMH contractor is in dispute with tax authorities of AJK and if the tax issue is not resolved, it is likely the EMH contractor may not deliver according to the work plan.
While briefing about Lowari Tunnel Project, the NHA Chairman Shahid Ashraf Tarar said that the total cost of the project is Rs 26.86 billion including Rs 20.985 billion local component and Rs 5.87 billion Foreign Exchange Component (FEC). He said that in the past, the project was delayed due to lack of funds. We got enough fund of (Rs 6 billion) this year due to the directives of the Prime Minister, he said, adding that almost 80 per cent project has been completed.