Pakistani 969-MW Neelum-Jhelum hydroelectric project Planning Commission seeks audit


This week, the Planning Commission for the 969-MW Neelum-Jhelum hydroelectric project (NJHP) being constructed in Pakistan has asked the government to conduct an independent audit of reported completed work on the project prior to approving new expenditures.

According to published documents, NJHP’s cost has risen from US$2.6 billion to $4.5 billion after changes were made in its design and costs were added for tunnel boring machines.

A block of lenders from the Middle East -- including the Islamic Development Bank, Kuwait Fund for Development, Saudi Fund for Development and Opec Development Fund -- pulled $433 million in collective loans in early July after learning of the escalated costs.

Reports indicate the lenders and Pakistan resolved the controversy in funding on July 18, but the project’s Planning Commission is calling for a financial audit.

In a revised public contract form the commission reviewed and submitted to the Pakistani government this month, members asked questions and about the accuracy of reports that detail completed progress on the project. They also asked for more details surrounding escalated costs.

NJHP is part of a run-of-the-river scheme designed to divert water from the Neelum River to a power station on the Jhelum River. Funding shortfalls and numerous other issues continue to delay its completion, originally scheduled to begin generating power in 2015, according to the Pakistani Water and Power Development Authority (WAPDA).

In a report published by The Nation, a source said it is up to WAPDA to hire an independent auditor to review and submit an audit of work reported complete on NJHP.

Soon after becoming Prime Minister in 2013, Nawaz Sharif, announced the project would be complete by December 2015. But since then, the completion date has been revised twice, with the first date being December 2016 and the latest announcement made in July saying the project will begin generating power the first quarter of 2017.

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