ISLAMABAD: Major hydropower and transmission line projects are reportedly facing Rupee cover issues due to less allocation in the Public Sector Development Project (PSDP) 2023-24, well informed sources in Ministry of Water Resources told Business Recorder.
During discussion on Dasu Hydropower Project (phase-1) at a recent meeting on World Bank funded projects, Chairman Wapda stated that the project faced some initial delays but it is on track now. The implementation of the project is in full swing and disbursement of $ 157m is planned by end June 2024. Constraints were being faced due to environment in Kohistan area and in demolition of houses (to be completed by May 2024). The construction of 132-kV line was also on track and should be completed by March 31, 2024. No further slippages were envisioned.
The World Bank Task Team Leader (TTL) for the project noted that Chairman Wapda had given very close attention to the project. It was highlighted that the disbursement target under the project is at risk due to non-availability of sufficient rupee cover allocation.
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To a question posed by caretaker Finance Minister regarding raising own funding, Chairman Wapda stated that Wapda was given tariff at a highly discounted rate. If unit rate was raised by Rs. 2/- over a two-year period, PSDP allocation would not be needed.
The meeting decided that caretaker Minister for Planning will be requested to chair a meeting on Wapda projects with participation of Minister for Finance, Ministry of Water Resources, Deputy Chairman Planning Commission, CGA, Wapda, Finance Division, EAD and World Bank. For the short term Government would go beyond the ceiling for the first quarter and in second quarter there will be specific release for foreign funded projects by M/o PDS&I and Wapda to also look into possibility of re-appropriation of funds within its portfolio to support the fast moving projects to avoid delays.
During discussion on Tarbela-5 Hydropower Project (T5HP), Senior Joint Secretary EAD informed the participants that rupee cover issue was also affecting T5 HPP project. Chairman Wapda informed that budget allocation for the current financial year is $ 123 million whereas the project is capable of spending $ 170 million. Caretaker Finance Minister suggested raising the required funding from the financial markets.
To a query, Chairman Wapda informed that majority of funding was made available through the PSDP while the remaining was secured by Government of Pakistan through financial support provided by development partners. The Secretary EAD proposed holding a separate meeting of stakeholders to discuss and address the issues of rupee cover.
Representative of Asian Infrastructure Investment Bank (AIIB), being a co-financier for T5HP, highlighted the security issues and restriction of movement for foreign consultants and contractors in the project area and requested Chairman Wapda to take up the matter with Ministry of Interior to address it. He also requested that the revised timelines conveyed to contractors may be closely monitored to ensure no slippages occurred moving forward.
Chairman Wapda replied that contractor was four months behind schedule but expressed confidence that actions could be taken to recover lost time. With regard to security issue he said that efforts were being made to ensure best possible security measures by the government.
The meeting decided that Minister for Planning will be requested to chair a meeting on Wapda projects with participation of Ministry for Finance, Ministry of Water Resources, Deputy Chairman Panning Commission, CGA, WAPDA, Finance Division, EAD and World Bank to address the issue of rupee cover. On National Transmission Modernization (Phase-D) Project, Senior Joint Secretary, EAD pointed out the critical issue of fast approaching closing date of the project i.e., January 31, 2024. He informed that after opening of bids for Islamabad West Substation (IWS) NTDC was now aware of the associated costs which need to be reflected in the revised PC-1 and revision is also necessary to timely apply for extension for the project. Formal request from Power Division for taking up the matter of restructuring and time extension with World Bank was still awaited. The representative of NTDC informed that the PC-1 had been uploaded on iPAS in first week of November, 2023, and that NTDC had already made the request for extension up to December, 2026 to Ministry of Energy (Power Division) which has been linked with uploading of PC-1 and award of contract for IWS. On query regarding status of award of IWS contract, NTDC informed that it was in final stages. The NTDC Board will accord approval after WB review.
Representative from Planning Commission highlighted rupee cover issue for the project as only Rs. 700 million cover had been allowed in current financial year. Secretary EAD stated that rupee cover issue had already been highlighted for projects previously discussed and revised PC-1 should be considered at the earliest, further that mid-year review was coming up where allocations could be ensured for foreign funded projects as substantial inflows were expected.
Secretary Planning informed that mid-year review was likely to be held in mid-January 2024.
The meeting decided that NTDC would be invited to discuss rupee cover and related issues in meeting to be chaired by Minister M/oPD&SI with participation of Minister for Finance, Ministry of Water Resources, Deputy Chairman Planning Commission, CGA, WAPDA, Finance Division, EAD and World Bank. It was decided that PD&SI would advance the mid-year review of PSDP in December, 2023 to better address the allocation issue of fast moving foreign funded projects.
