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Govt to launch Rs515 billion Neelum-Jhelum hydropower project

27 November, 2017

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ISLAMABAD: The government is ready to launch the Rs515 billion Neelum-Jhelum hydropower project in February next year, even though the Water and Power Develop­ment Authority (Wapda) is far from completing its basic requirements.

This has unnerved the key government institutions directly or indirectly which fear that technically and legally ill-planned launch of the strategic project could lead to an embarrassing repeat of the Nandipur power project.

Informed sources said the executing agency of the project — Wapda — had still not applied to the National Electric Power Regulatory Authority (Nepra) for tariff setting — a process that can consume at least one month. In fact, it has yet to be decided whether Wapda as an authority should apply for the tariff as an umbrella organisation of many other projects or the Neelum-Jhelum Hydropower Project Company (NJC) — a special purpose vehicle (SPV) — should file the tariff petition.

On top of that, Wapda and NJC have also not concluded or entered into talks with the Central Power Purchasing Agency (CPPA) for signing of the Power Purchase Agreement (PPA) — a prerequisite for sale of electricity from any plant and its payment by the power purchaser.

The filing of tariff by Wapda or NJC involves a separate regulatory process and entails different treatments but tariff approval by Nepra is a basic requirement for the project to send out units to the grid against a price.

In the absence of a PPA, Nepra cannot even take up the petition. In case Wapda opts for tariff petition on behalf of the SPV, the NJC would also need a generation licence that would also consume at least three to four months.

Interestingly, a project that has consumed almost 15 years under implementation also lacks a formal mandatory tripartite agreement between three major stakeholders — the Azad Kashmir government, Wapda and the federal government — to cover past and future arrangements over rights and responsibilities.

On the technical side, the Wapda authorities, project contractors of China and the National Transmission and Dispatch Company (NTDC) are far from being prepared on a series of issues like completion of a 525kV transmission line, energising 525kV switchyard, third party testing validation, revenue metering and protection relay setting.

A meeting of Chinese contractor CMEC, Wapda, NJC and NTDC on Nov 14 noted a total of six incomplete tasks on part of various parties.

Informed sources said the 525kV switchyard required to operationalise first unit of the plant was not yet ready. The switchyard has to receive electricity from the generation unit and send it to the national grid. But to do that the authorities have to secure a third party certification to confirm that the switchyard and transmission lines are accurately synchronised and safe and would not harm the grid spanning across the country in case of a back-feed.

An official, who attended the Nov 14 meeting, told Dawn that having been leading Wapda for more than a year, its chairman was surprised to know that a third party validation for the switchyard was also mandatory. The switchyard completion could consume another two to three months, while its testing and third party certification process requires another two to three months.

It was also noted during the meeting that the NTDC was still working on three lots of transmission lines, but promised to deliver them by Dec 15. The meeting noted with concern that in the absence of PPA, a tariff petition could not be filed or tariff approved but then energy meters were still not installed to monitor electricity units produced and sent out.

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