Islamabad      -     Chief Executive Officer Neelum-Jhelum Hydropower Company (NJHPC) Wednesday warned that the company may face default if its energy dues were not cleared within a month.

If the payment for the electricity sold to CPPA-G was not made within a month then the NJHPC will not have money to even pay for the salaries of the employees after December, the Chief Executive Neelum-Jehlum Hydropower Company Brig Zareen told National Assembly committee on Planning Development and Reforms here Wednesday.

The Chief Executive briefed the Committee regarding 969 MW Neelum Jhelum Hyderopower Project. The Standing committee on Planning which met here with MNA Junaid Akbar was informed that the project cost as per approved PC-1 (4th revised) was Rs506 billion and cost incurred up to June 2019 was Rs421 billion. In the current PSDP Rs34,292 million were placed.

The Standing committee was informed that 6 billion units have been delivered by the Neelum-Jhelum project to the power sector but it was being kept unaccounted for and shown as reduction in line losses.

Chief Executive Officer informed that for the Neelum Jhelum Project Rs100 billion were raised from local banks which is currently being utilised for debt servicing, payment of salaries and other expenses. He maintained that the company’s annual debt service liability amounted to Rs50 billion.

Mr Zareen said the National Electric Power Regulatory Authority (NEPRA) had given an interim tariff at the rate of Rs5.9180 per unit for one year that was notified on March 8, 2019 but NJHPC had not so far been paid a single rupee by the Central Power Purchase Agency (CPPA) against more than six billion units (kwh) it supplied to the national grid.The CPPA was not signing power purchase agreement (PPA), he added.

Giving the detail regarding the agreement, he said that the PPA between CPPA-G and NJHPC drafted and cleared by the legal section of CPPA in June 2019 and was submitted to CPPA but not being approved, Zareen added.

Therefore the NJHPC is not able to get any payment for the delivered energy. He said on NJHPC’s request, in August 2019, the Nepra had revised interim tariff to Rs9.1184 per unit but that was not also being notified. Final tariff application was currently under process, he said.

He said the CPPA was hampering the signing of PPA and invoicing mechanism by taking a stand that NJHPC’s tariff be clubbed with Wapda tariff despite the fact that NJHPC was an independent company registered under the Securities & Exchange Commission of Pakistan (SECP) and the power regulator had approved a separate tariff.

Clubbing of NJHPC tariff with Wapda was not only impractical but involved serious legal and taxation ramifications, Zareen said while responding to a query. Unlike Wapda, NJHPC had some tax exemptions while there were also legal issues relating to export of electricity from Azad Jammu & Kashmir, he further elaborated. The company is not even able to pay Rs1.10 per unit to AJK as water use charge.

Responding to another query on Neelum-Jhelum surcharge, the CEO said that about Rs60 billion had so far been collected under the head and being utilized by the company.

 The CEO further informed that Chinese contractors had left the project when the project had attained 99.6 percent completion and some minor works were left after shelling by Indian Army on dam site on July 30, October 19-20 and 24, 2019 and was not willing to return.

 The NJHPC had moved through the foreign affairs ministry that had taken up the matter with Beijing and hopefully the contractor would soon resume their job as required under warranties, he said.

 The General Manager and Project Director, Dasu Hydropower Project briefed the Committee about the Dasu Hydropower Project stage-1 (2,160 MW), district Kohistan, Khyber Pakhtunkhwa. He informed that contract agreement was signed on November 25, 2019 with JV of GE Hydro China Co. Ltd & Power China Zhongnan Engineering Corporation Limited. The project will be completed in February, 2023. He informed that revised land acquisition cost including Revised Land Rates and built up property amounting to Rs36.914 billion was approved by ECNEC and Federal Cabinet Government of Pakistan in October, 2019. The project was delayed due to problems in land acquisition, the DC/LAC Kohistan has agreed that land awards will be made between March 2020 and June, 2020. The Committee recommended that payment to land owners may be made immediately for land acquisition and completion of the project timely. The Committee directed to invitee SMBR Khyber Pakhtunkhwa and D.C Upper Kohistan for briefing regarding issue of land acquisition for Dasu dam. The Committee directed the Project Director Dasu Hydropower project to continuously update the Committee regarding progress of the project till its completion.

The “General Statistic (Reorganization) (Amendment) Bill, 2019” was deferred till next meeting as the mover did not attend the meeting.