Ecnec approved an increase in the cost of Tarbela 4th Extension hydroelectric power project to Rs 122.9 billion, up Rs40.5 billion or nearly 50% within four years of the project’s execution.
The government approved six projects costing Rs 216.4 billion, including four schemes that were being executed but their construction cost had jumped significantly due to ill planning, scarcity of funds and flawed implementation strategies.
Adviser to Prime Minister on Finance Dr Abdul Hafeez Shaikh headed the Executive Committee of the National Economic Council (Ecnec) which approved the schemes put forth by the Ministry of Planning, Development and Special Initiatives. Planning Minister Asad Umar also attended his first Ecnec meeting.
Ecnec approved an increase in the cost of Tarbela 4th Extension hydroelectric power project to Rs 122.9 billion, up Rs 40.5 billion or nearly 50% within four years of the project’s execution.
The Public Sector Development Programme (PSDP) is riddled with schemes that are facing years of delay. The factors contributing to the delay remain unaddressed, including a lack of fiscal resources.
The Tarbela 4th Extension project is aimed at increasing the project’s power generation capacity from 3,478 megawatts to 4,888MW by installing three units of 470MW each on the existing irrigation tunnel four. The World Bank is providing financing for the project. Ecnec also approved the Southern Punjab Poverty Alleviation project at a cost of Rs 15.52 billion, which had been revised upwards three times.
The government of Punjab and the International Fund for Agricultural Development are financiers of the project and the aim of the project is to contribute to poverty reduction in the southern Punjab region by improving living standards of people, boosting agricultural production and providing infrastructure such as water supply, irrigation, access roads, sanitation and drainage facilities to the population.
The project is expected to be completed by 2023. Ecnec was briefed that the main cause of the cost revision was the change in the exchange rate.
Ecnec approved the Renewable Energy Development Sector Investment Programme (REDSIP) at a three time upward revised cost of Rs 12.8 billion, including foreign loan of Rs 8.84 billion.
The project is sponsored by the government of Punjab with financial assistance from the Asian Development Bank (ADB).
The main objective of REDSIP is the construction of hydel projects ie Marala (7.64MW), Chianwali (5.38MW), Deg-Outfall (4.04MW) and Pakpattan (2.82MW) at canal falls of Punjab. The project also envisaged capacity building of the energy department, Punjab.
Ecnec approved a scheme at a cost of Rs 13.4 billion to transmit power from projects at Jhimpir and Gharo wind clusters. The cost of this project was revised too.
Ecnec endorsed the report of a committee for the determination of tariff for PC-I-based public-sector power projects.
It was decided that in future all power projects, irrespective of fuel technology, and funded through the PSDP, should comply with the National Electric Power Regulatory Authority’s (Nepra) tariff regime by applying to Nepra for tariff determination at feasibility, EPC and COD stages, including the Balakot hydroelectric power project.