ISLAMABAD - Asian Development Bank is likely to finance Naulong Dam project, located in Balochistan province, it was learnt reliably here Sunday.

The water and power ministry has also recommended that a contract should be awarded on EPC (Engineering, Procurement and Construction) basis for the early completion of Naulong Dam project, official sources told The Nation.

In a meeting held in the ministry of planning, development and reforms, it was informed by an official of the EAD that, after a long time, ADB had taken water sector projects on the request of EAD, so Wapda should avail this opportunity to develop hydropower infrastructure in the country.

Naulong Dam, a medium-sized reservoir, is proposed to be constructed across Mula River in district Jhal Magsi of Balochistan. The project, with a water storage capacity of nearly 250,000 acres feet, will irrigate 47,000 acres of land. Some 4,300 employment opportunities will be generated during the construction, operation and maintenance of the project. Benefits of the project have been calculated as more than Rs 2 billion per annum.

Jhal Magsi is a huge plain-sharing Magsi tribal area between Sindh and Balochistan with minimum sources of water available to local residents. The project was approved by the CDWP with a cost of Rs 11.77 billion and then Rs 18 billion during the PPP government. Balochistan is water-starved region of Pakistan and, instead of constructing more and more water reservoirs, the departments concerned are creating hurdles in the execution of already approved projects, official maintained.

The meeting was further informed the project was originally approved at a cost of Rs 11.7 billion, but the work could not be started and the project was first revised at a cost of Rs 18 billion in 2012. As the work again could not be started, the sponsors of the project have now submitted another PC-I at a cost of Rs 26.55 billion, the sources maintained.

During the meeting, a Wapda official revealed when the cost of the project was Rs 11.7 billion, it had received a bid of Rs 18 billion, but when its cost was revised as Rs 18 billion, it received a single bid of Rs 28 billion, which was rejected. Later, the bid was reduced to Rs 19 billion by the contractor.

The planning ministry showed concern over the huge increase in the cost of the project and said that it was due to acute deficiencies and flaws in the PC-I. The ministry was also concerned over the drastic reduction of Rs 9 billion by the same contractor from Rs 28 billion in 2012 to Rs 19 billion in 2016 and said there might be discrepancies in the bid submitted by the contractor.

The ministry of water and power recommended that there was a need of thorough reconsideration as there was no cushion available for siltation in the reservoir. The water and power ministry further recommended that the contract should be awarded on EPC basis for the early completion of the project.

The planning ministry further recommended that the ministry of water and power should conduct objective study to ascertain/propose soundness of design and requisite correction in view of futuristic needs. The ministry of water and power was also asked to look into the possibility of cost-sharing option between the federal and provincial government.

It is pertinent to mention here that the Naulong Dam project was approved by the CWDP and Ecnec in 2012 and the planning ministry released an amount of Rs 2 billion, to the executor of the project in 2014, but so far no construction work on the project been has started.