Tarbela fifth extension cost jumps 285%
The government on Thursday approved the purchase of a Rs5.3 billion helicopter for the Diamer Basha dam scheme and increased the cost of another hydropower project by a staggering 285%.
The planning ministry announced that the Central Development Working Party (CDWP) cleared the Rs5.3 billion proposal to procure the helicopter and recommended the new price for the construction of the Tarbela fifth extension project at Rs316 billion. There is an increase of Rs234 billion, or 285%, in the construction cost of the World Bank?funded Tarbela project, which was first approved in 2016.
CDWP Chairman and Planning Minister Ahsan Iqbal criticised the Water and Power Development Authority (Wapda) for poorly managing the project but still gave his approval for the scheme.
The planning ministry said that while discussing the Diamer-Basha Dam project, Iqbal expressed serious concern that the revised PC?I of the project had not been submitted for the last six years despite the cost increasing manifold from the original approved cost of Rs480 billion in 2018, which showed poor project management capacity.
Wapda sought revised project approval only to the extent of adding the cost of helicopter purchase. Wapda conveyed the need for a helicopter to be used for emergency evacuation, movement of VVIPs, and providing security to foreign expatriates. Chinese nationals working on hydropower projects in Pakistan have been attacked in the past, resulting in the deaths of many foreign nationals.
Wapda requested the purchase of a helicopter instead of leasing within the provision of Rs600 million available in the contract. Two years ago, Wapda had sought permission to buy three helicopters for the Dasu hydropower project, Diamer-Basha Dam project and Mohmand Dam project with a total estimated cost of Rs13.2 billion ($44 million). However, the planning minister had then remarked that "there is a helicopter squadron under the Cabinet Division. It has necessary infrastructure for operation and maintenance of helicopters. These helicopters should be placed under the Cabinet Division, and Wapda can use them whenever required." But on Thursday he gave the go?ahead for the purchase of the helicopter.
Pakistan has already negotiated a contract for the procurement of two new Mi?17V5 helicopters with a Russian firm.
The CDWP also directed that the new chairman of Wapda should ensure that the Diamer-Basha Dam project is managed in a professional manner. Iqbal further observed that since 2020, concerns had repeatedly been raised by him during standing Committee on Planning meetings regarding the escalating cost of the project. However, despite the passage of several years, Wapda had still not submitted the revised PC?I. Iqbal emphasised that this reservation should be made part of the official record, according to the planning ministry.
Iqbal also questioned whether a holistic, integrated and professional project design and management system for mega projects existed in Wapda. Wapda should take necessary steps to improve its project management capacity.
The Diamer-Basha Dam project was conceived to address Pakistan's growing water scarcity, rising energy demand and increasing vulnerability to floods. Situated on the Indus River near Chilas, the project forms an integral part of the country's long?term water and hydropower development strategy, aimed at enhancing water storage capacity and generating affordable renewable energy.
Tarbela project
The CDWP recommended the Tarbela fifth extension hydropower project, worth Rs316.4 billion, to the Executive Committee of the National Economic Council (ECNEC) for further consideration, according to the planning ministry. The project was originally approved in 2016 at a cost of Rs82.3 billion, and within ten years its price has escalated by another Rs234 billion.
The ministry stated that Iqbal expressed serious concerns over the project's management, transparency and oversight mechanisms. He observed that the professional capability of the concerned staff appeared questionable, as the Ministry of Water had also pointed out shortcomings in its inquiry report.
According to the press statement, the minister questioned the process through which a local consultant with a dubious record was engaged for the project, stating that an international consultant had initially been hired and subsequently replaced by a local company in a non?transparent manner. He directed the concerned authorities to share the inquiry report with the ministry for detailed review.
However, despite making these observations, the minister approved the revised project, which also included a 550% increase in the cost of consultancy services. Against the original cost of Rs1.8 billion, the CDWP approved more than Rs19 billion for consulting services.
Highlighting the financial implications, the minister noted that the project was originally estimated at Rs82 billion, whereas expenditures had already crossed Rs140 billion, according to the planning ministry.
The minister further directed that all observations regarding mismanagement, weak due diligence, and the performance of contractors and consultants be formally placed before ECNEC by an inquiry committee headed by the member (infrastructure). He directed the committee to thoroughly examine these issues, review the observations raised during the meeting, and submit a comprehensive report to ECNEC.
He further directed the authorities to develop a robust institutional framework to prevent such shortcomings in future projects, emphasising that organisations like Wapda must uphold the highest standards of professionalism, accountability and project governance.