Nai Gaj Dam’s Estimated Cost Increases 277% Due to Sindh Govt’s Delay

Nai Gaj Dam’s estimated cost has increased from the initial Rs. 16.824 billion to Rs. 47 billion, following design changes and deferred financing by the federal government.

This was revealed by Special Secretary Irrigation Sindh Aslam Ansari while briefing the Senate Standing Committee on Planning, Development, and Reform which was chaired by Agha Shahzaib Durrani.

Sindh government has accused the federal government of unilateral changes in Nai Gaj Dam design as well as deferred financing, which resulted in a higher estimated cost of Rs. 47 billion compared to the initial estimate of Rs. 16.924 billion.

The committee repeatedly asked Project Director and Member WAPDA to justify the cost escalation, but they failed to do so. The committee then ordered Secretary Planning, Development and Reform Zafar Hassan to initiate an inquiry and share a report about the cost escalation in one week.

The original PC-1 cost of the Nai Gaj Dam project was Rs. 16.924 billion which was later revised to Rs. 26.236 billion. The first revision was approved by ECNEC with a reduced scope of work by deleting the essential components i.e. powerhouse, access roads, a pipeline to Manchar lake and project colony.

However, the PC-1 was revised again and submitted by WAPDA & MoWR with an estimated cost of Rs 46.98 billion while additional components included powerhouse, project colony, access roads, the actual cost of spillways and pipeline to Manchar Lake. The project was recommended by CDWP and discussed by ECNEC, however, it was deferred due to cost-sharing by the government of Sindh.

Secretary Planning informed the committee that the 2nd revised PC-1 is pending ECNEC approval regarding cost-sharing by the government of Sindh for 50 percent additional cost over the 1st revision. The government of Sindh, on the other hand, says that the work component is to be fully funded by the federal government.

Special Secretary Sindh said that the federal government is responsible for the complete funding of the project. The provincial govt. has the responsibility of land procurement, settlement and security issues. He further said that WAPDA took a unilateral decision of changing the project design and the federal government’s deferred financing led to cost escalation.

Secretary Planning told the meeting that the matter has become quite complex because of the new water policy and the best solution is to wait for the court’s decision. Chief Engineer WAPDA, who is overseeing the project, told the meeting that changes made in the design did not have any financial implications.

The committee members were surprised at the contradictory views from WAPDA and Sindh Irrigation Department on the decision being unilateral or not and the changes having financial implications.

Delayed Projects

Secretary Planning told the meeting that when several projects are included in the yearly PSDP list, the allocated funds are lower and spent over longer periods.

The committee also noted that the consultants involved in these projects can bring the projects to a meaningful conclusion and the throw forward liability of any project shouldn’t be more than 4 years.

The committee observed that the project should have been completed in three years, not ten.

Secretary Planning said that forwarding liabilities is a major challenge, which is why 353 projects were shelved last year. The committee recommended that forwarding liabilities should not exceed a certain period of time.

The chairman stressed the need for prioritizing projects and looking into resource availability before initiating the developmental projects and also asked for setting up a proper pattern for financing these projects.

Zafar Hassan apprised the meeting that the provinces’ demand for developmental projects is increasing, adding that forward liabilities are also huge.

He said that lack of resources is another reason why the timely completion of these projects increases costs. The government is formulating policies in this regard to ensure completion of all social sector developmental projects within the stipulated time-frame to avoid any unnecessary delays and price escalation, he said.

CPEC Budget Re-allocation

The committee, while discussing the matter of re-allocation of Rs. 24 billion out of Rs. 27 billion under the head of special initiative of CPEC towards other programs, was told that Senator Mina Raza Rabbani has withdrawn the matter.

The committee, however, decided to hear the officials about the breakup of the allocation of Rs. 24 billion on a yearly basis in the next meeting.

HEC’s Expenditures

Senior officials of the Higher Education Commission (HEC) informed the committee that HEC has awarded 14,175 scholarships under its ongoing programs for the financial year 2019-20 with an allocation of Rs. 6.55 billion under PSDP.

They said that 165,088 students paid their fees under Prime Minister Fee Reimbursement Scheme. Other than that, 3,000 scholarships were given to students from Afghanistan last year, 3,000 more scholarships would be provided this year.

The committee was told by Fatah Marri, Member HEC that there are 18 ongoing scholarship projects with more than 14,175 scholarships. These include 11,694 scholarships for Ph.D., 2,336 for undergraduate students, 145 for MS/MPhil. The committee was told that HEC has awarded a total of 218,602 scholarships including foreign, local and need-based scholarships as well as the Prime Minister Fee Reimbursement Programme.

The committee sought details of all students from Balochistan who have obtained scholarships, as many people from other provinces use a fake Balochistan domicile to get scholarships. The committee recommended introducing special need-based scholarships for female students of under-developed areas of the Federal capital.

The committee also recommended initiating special scholarship programs for the female students from the less developed areas of different provinces, particularly from Balochistan to promote education in these areas.