Tarbela cost jumps 282% to Rs316b

ECNEC approves Rs1.15tr projects including Lahore-Bahawalnagar motorway

ISLAMABAD:

The government has approved 16 projects costing Rs1.15 trillion, including the politically controversial Lahore-Bahawalnagar motorway and a 282% upward revision in the Tarbela fifth extension scheme that is facing serious setbacks.

The Executive Committee of the National Economic Council (ECNEC), headed by Deputy Prime Minister Ishaq Dar, approved these schemes – some of which came before the committee more than once and saw significant cost escalation.

The ECNEC approved the projects at an estimated cost of Rs1.15 trillion, including Rs320 billion in additional costs to offset the impact of delays and price escalation. Despite the significance of the event, the government did not release a detailed statement.

The office of the deputy prime minister released a brief statement and did not disclose all the names of the schemes and their costs. The notable omission was the approval of the Lahore-Sahiwal-Bahawalnagar motorway project, which is opposed by the Pakistan Peoples Party (PPP).

The ECNEC approved the Rs407 billion Lahore-Sahiwal-Bahawalnagar Motorway project. It approved package-I of 18.5 km from Lahore Ring Road to Raja Jang Interchange with federal government financing at a cost of Rs49 billion.

The committee decided that the original alignment of the project – 295 km – will be retained, as per the prime minister's directive of March this year. For the remaining sections, in view of the massive throw forward of the Public Sector Development Programme, the Public-Private Partnership (PPP) mode of financing for viable sections should be explored by the National Highway Authority (NHA).

The NHA will arrange its share out of its revenue as Viability Gap Funding (VGF) for sections considered viable on PPP mode. For sections found non-viable, the NHA would explore alternate financing options, including sharing by the Punjab government, financing from international financial institutions (IFIs), and execution on federal government funding, subject to availability.

The ECNEC approved the 5th Tarbela extension project at a 282% upward revised cost of Rs316 billion. The original cost of the project was Rs82 billion.

During the Central Development Working Party (CDWP) meeting that cleared the extension scheme, Planning Minister Ahsan Iqbal had "expressed serious concerns over the project's management, transparency, and oversight mechanisms". Iqbal observed that the professional capability of the concerned staff appeared questionable, adding that the Ministry of Water Resources had also pointed out shortcomings in its inquiry report.

The CDWP had been informed that an inquiry into the breach of the downstream cofferdam at the T5 project had found that "the collapse of T5 downstream cofferdam was not caused by flood but by change in design from roller-compacted concrete to rock-fill dam, inadequate supervision and delayed administrative actions leading to structural failure, project delays and financial losses".

The Ministry of Finance had sought justifications for the 282% cost escalation and pointed out that the project was being financed through international financial institutions. It asked Wapda to furnish the repayment mechanism, but the project was still approved by the ECNEC.

The ECNEC approved the Khwazakhela-Besham Expressway (48 km) at a revised cost of Rs116.6 billion, 47% higher than the original cost. It also approved an interprovincial road project for connectivity of Gilgit-Baltistan with Azad Kashmir at Rs29 billion, Rs10 billion higher than original estimates.

The Rathoa Haryam bridge across the reservoir channel on Mirpur-Islamgarh Road was approved at Rs10.8 billion, up from the original Rs1.4 billion. The Wastewater Treatment Plant in Lahore was approved at Rs56.6 billion, higher by Rs4.2 billion.

The ECNEC approved the southern Punjab Poverty Alleviation Project for 10 districts – Bahawalnagar, Bahawalpur, Bhakkar, Dera Ghazi Khan, Khushab, Layyah, Mianwali, Muzaffargarh, Rahim Yar Khan and Rajanpur – at Rs29.7 billion, with an additional Rs6.8 billion cost escalation.

It approved the Rs10.6 billion Fulbright scholarship programme, which aims to award 816 scholarships. Of these, 550 MS and 141 PhD scholarships will be awarded by the United States Educational Foundation in Pakistan (USEFP), while the Higher Education Commission (HEC) will award 125 PhD scholarships from PSDP funding.

The ECNEC approved the Mazarani Dam in Qambar Shahdadkot, Sindh at Rs16.1 billion and directed that Command Area Development (CAD) be initiated by the province in sync with the main dam to accrue project benefits in Phase-II.

It also approved the Winder dam at Rs21.6 billion, with the federal government contributing Rs15.6 billion.

The Mashkel Dam at Washuk was approved at Rs41 billion, to be financed by the Balochistan government, with an environment assessment report to be made part of the project documents.

The ECNEC approved the Supply, Installation, Testing and Commissioning of Asset Performance Management Systems for Lahore Electric Supply Company (LESCO) at Rs24 billion. It also approved the Rs19 billion Electricity Distribution Efficiency Improvement Project for Hyderabad Electric Supply Company (HESCO) and a Rs30.2 billion similar project for Peshawar Electric Supply Company (PESCO).

The Rs28 billion Improving Workforce Readiness in Punjab Project was approved to modernise the technical and vocational education and training (TVET) sector, supporting economic growth and youth employability in Punjab.