Hydropower Project Mismanagement

The recent session of the National Assembly’s Public Accounts Committee (PAC) revealed significant deficiencies and extensive financial mismanagement in major hydropower projects. This has sparked concerns about transparency, accountability, and the responsible use of public funds within the energy sector.

Dasu Hydropower Project

The Dasu Hydropower Project was a key focus, with substantial revisions to its scope, inadequate oversight, and considerable delays. These issues have resulted in a significant increase in costs, raising serious questions about the project’s planning and the capabilities of the agencies involved.

During the PAC session, it was highlighted that fundamental issues such as land acquisition and the resettlement of affected communities remain unresolved, even more than ten years after the project’s initial approval.

While the Water Resources secretary attributed the land acquisition delays to the Khyber-Pakhtunkhwa government, it is important to understand why a project of such significant financial scale was allowed to proceed without securing land ownership, especially since Planning Division guidelines stipulate that no water project should commence until land acquisition is complete.

As a result of this mismanagement, the project, initially planned to start in 2014 and conclude by 2019 at an estimated cost of Rs486 billion, only commenced in 2020 and is now projected for completion in 2029.

The cost has also increased to Rs1.7 trillion, a 240 percent rise in projected expenditure, making it the most expensive hydropower venture in Pakistan’s history.

Neelum-Jhelum Hydropower Project (NJHPP)

The PAC also addressed the case of the beleaguered Neelum-Jhelum Hydropower Project (NJHPP), which has been non-operational since May 2024 due to the collapse of its headrace tunnel.

The project’s future remains uncertain, with no clear indication of whether its structural and technical challenges have been resolved or when operations might resume. The NJHPP is plagued by repeated delays, cost overruns, technical setbacks, design flaws, and mismanagement in its construction and upkeep. Despite the prime minister forming a committee in July to investigate the shutdown and assign blame for design and construction shortcomings, the committee’s report timeline remains unclear.

Procurement Lapses

Further underscoring the neglect in managing critical national projects, the PAC session revealed that used concrete testing equipment had been procured for the Diamer-Bhasha Dam, from the very contractor tasked with conducting the tests. This highlights lapses in procurement oversight and raises concerns about potential conflicts of interest, questioning the integrity and credibility of the quality assurance process.

Nepra’s 2024 State of Power Industry report, released in December, also revealed inefficiencies affecting smaller plants – six of them operating below 50 percent of their designed capacity. If smaller projects cannot be efficiently managed, there is little confidence in the successful operation of larger projects like Diamer-Bhasha and Dasu, especially given the mismanagement of NJHPP post-completion.

A systemic transformation is required in how hydropower projects are planned, commissioned, and executed to improve the nation’s hydropower operations.

Transparent and competent planning processes, adherence to timelines and budgets, and stronger accountability mechanisms are essential. The repeated failures also reflect shortcomings in leadership within the water and power sector, highlighting the need to assess whether the required vision and capacity are in place to steer crucial national undertakings.