TARBELA 4TH EXTENSION HYDROPOWER PROJECT FACES FURTHER DELAY

Harvesting of the already delayed Tarbela 4th Extension Hydropower Project (T4HP), will take another year in generating 1,410 MW of electricity, as the World Bank has extended the completion date till 2019.

The latest World Bank documents available with Pakistan Today indicate that the delay was caused because the Water and Power Development Authority (WAPDA) took unnecessary time in awarding contracts, which decelerated the funds flows from the bank. However, the release of funds will accelerate in 2017 when major shipments for electro-mechanical contracts are expected to arrive on site.

The downtime of the project not only deprived annual benefits of the project Rs.30.7 billion but substantial savings of about USD. 115 million were also cancelled from the project’s IDA allocation as of June 2, 2016, leaving an IDA amount of 325 million USD.

The documents further revealed that the loss could be measured by the fact that during the high flow months of JulyOctober, the flow in the Indus River was much higher that could be passed through the existing generation facilities and the remaining was discharged over the spillways and therefore does not provide any ‘power benefits’.

The documents held WAPDA responsible for failing to pursue NEPRA for review motion ‘and therefore WAPDA Hydel tariff has not been notified’, resulted in shortfall of about Rs. 67 billion in fiscal 2016.

Opening and ‘improper usage’ of escrow account for the project was also the major reasons for delay, but they are not overly complex or extraordinarily challenging and experience has been gained recently in executing such works under T4HP.

The documents point out that WAPDA has been hesitant in implementing the decision of making further decentralising to the project director level, which were to ensure efficiency and transparency in procurement, financial, environmental and social management is crucial for successful implementation of the project.

The delay majorly attributed on account of the ‘change in results framework, change in legal covenants, change in loan closing date, change to components and cost, change in institutional arrangements, change in financial management and change in implementation schedule.’

The T4HP became effective on April 27, 2012 and financing included and the International Bank for Reconstruction and Development (IBRD) Loan of USD 400 million and IDA Credit of USD 440 million. Disbursements made as of August 22, 2016 were about USD269.7 million (37 per cent), about USD128.4 from IDA and USD141.3 million from IBRD. “This is less than the original projections for disbursements, the documents states.”

Pointing to health and safety management at the project site, the documents mention: “There was an accident at T4HP construction site on July 2 that caused four fatalities. The contractor was largely in compliance with Health and Safety Management Plan which is updated periodically in the light of findings and recommendations of various audit reports, site experiences and corrective actions. This additional safety measures will be undertaken to improve safety and accident free implementation of T4HP, the documents said.

Tarbela 4th Extension Hydropower Project is being developed to enhance the generation capacity of Tarbela Hydel Power Station to 4,888MW after installation of another three units of 1,410MW on Tunnel No. 4. Main Dam, intake and tunnel already exist. Only the construction of powerhouse, penstock, and extension of the switchyard and installation of electrical and mechanical equipment are to be undertaken for the project.