Govt to implement $51m plan for Tarbela project

Written by  Published by:Pakistan Views Friday, 20 February 2015 08:34

ISLAMABAD: In order to fulfill Prime Minister’s plan to add 1,410 megawatts (MW) of electricity in the system before the next elections, the government has decided to implement a $51-million plan for executing the Tarbela fourth extension project seven months ahead of its planned completion.

The $51-million is over and above the existing estimated cost of the project –a spending that the Water and Power Development Authority (Wapda) claims would help generate $300 million worth electricity by speeding up the plan of completion.

Under the new schedule, the project should be completed by June 2017, ahead of the high water flow season, said Wapda official. The additional funds will be either given by the federal government or arranged by Wapda.

During the ground breaking ceremony of Tarbela fourth extension project, Prime Minister Nawaz Sharif desired an accelerated completion of the project. According to the original plan, three machines of the project were to be commissioned till February 2018, said the officials.

Wapda – which is executing the project – had asked the contractor to finish the project seven months ahead of schedule. The contractor sought roughly an additional $80 million; the World Bank’s panel of experts recommended $51 million as the reasonable price.

The WB board had approved a mix of concessionary and expensive loan of $840 million to add 1,410MW to the existing generation capacity of the Tarbela hydropower project. After completion, Tarbela’s generation capacity will increase to 4,888MW.

The government is desperate to take measures that could bring an end to the energy crisis ahead of February 2018 general elections. The inability to control power outages was also one of the reasons behind the humiliating defeat of the Pakistan Peoples’ Party during the last general elections.

The incumbent government had also planned to implement an additional $68-million plan to finish work on the Neelum Jhelum hydro power project with a generation capacity of 969MW. However, the plan was shelved after the government did not provide the requisite resources.

As the main financier of the project, the WB has also given a waiver for incurring additional cost of $51 million on the Tarbela project. The original total cost of the project was estimated at $914 million.

Out of the $840 million loan, the WB has so far provided roughly $143 million, which is 17% of the original cost. However, Wapda said its project was on track, as the cost of the civil contract was $651 million, out of which, $312 million were on account of provision of equipment and machinery.

Against the $312 million, Wapda has so far paid $27.3 million and the remaining amount will be spent once the equipment is handed over.

One of the biggest Germany’s economic champions; Voith Hydro Company is providing machinery and equipment for the project through its Chinese partners. The Voith is a family owned company since 1867 and its annual sales last year amounted to €5.7 billion.

The Tarbela fourth project showed a saving of $150 million that the WB has indicated to divert for the Tarbela fifth extension project that the government is planning to start from February next year. The initial estimated cost of Tarbela fifth extension is $700 million and may generate up to 1,400MW electricity.

New funding

The Austrian ambassador to Pakistan has offered $400 million loan for Tarbela fifth extension, according to the Ministry of Finance. However, the Austrian government wanted the contract for providing machinery and equipment to be awarded to an Austrian firm, Andritz Hydro, according to a Wapda official.

He said Austria wanted that the contract should be awarded on a government-to-government basis without international competitive bidding despite the fact the Andritz was a private firm. It will be difficult for the government to waive the competitive bidding condition, said the official.


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