AGP Demands Probe Against Rs.700 Billion in Losses in Neelum-Jhelum Project

The Auditor General of Pakistan (AGP) has demanded an extensive probe into the mismanaged development of the Neelum-Jhelum hydropower project to fix responsibility.

The said project has caused losses of Rs. 700 billion to the national exchequer and resulted in loss of water rights over the Jhelum River to India under an international arbitration.

The AGP presented the performance audit of the 969-megawatt power project worth Rs. 510 billion in Azad Jammu and Kashmir before the parliament.

While presenting the report, the AGP said that the project had a cost overrun of around Rs. 400 billion, delay of more than 21 years, and a loss of non-accrued financial benefits of about Rs. 237 billion.


Neelum-Jhelum Project Becomes the World’s Most Expensive Hydel Project Ever

On top of that, a series of irregularities have been committed by the governments, officers, and departments causing over Rs. 60 billion in losses. These losses are other than the annual recurring loss of Rs. 5.15 billion. The AGP said that at least two dozen further investigations would be needed to fix the responsibility.

“Due to delays the envisaged benefits could not be achieved and project cost increased by Rs400bn…Moreover, due to non-completion of the project, Pakistan lost the case in the Court of International Arbitration on the rights of western rivers under the Indus Basin Treaty. NJHP is an exemplary mismanaged project resulting into heavy cost and time overrun,” stated the AGP.

The audit also reported irregular and unjustified award of construction of contract worth Rs. 90.90 billion prior to the appointment of consultants and without obtaining performance guarantees amounting Rs. 48.8 billion.

The AGP also stated that Pakistan lost water rights in international arbitration due to delays. “If the project had completed in due time, Pakistan could have obtained full rights on the water,” observed the AGP.

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