3 مارچ، 2015

Delay in release of funds: Golan Gol power project cost escalates to Rs 28 billion

 



The cost of 106 MW Golan Gol hydropower power project has escalated to Rs 28 billion from Rs 07 billion largely due to delay in release of funds by the Finance Ministry. Sources revealed that various factors are responsible for slow implementation and cost escalation of the project including delay in release of funds. 

The cost of 106 MW Golan Gol hydropower power project has escalated to Rs 28 billion from Rs 07 billion largely due to delay in release of funds by the Finance Ministry. 

The Public Sector Development Programme (PSDP) releases for the project declined substantially in the current fiscal year with sources attributing the decline to compulsions associated with concerns of a rising fiscal deficit with the consensus that tax authorities will be unable to achieve even the downward revised revenue collection target of Rs 2,691 billion. As a result, sources maintained, the PSDP, as in the past is going to be slashed. 

According to WAPDA officials, a shortfall in on-hand funding arrangement is $71.69 million. Officials have requested the Economic Affairs Division (EAD) the through Ministry of Water and Power for additional financing. Delayed release in payment to contractors and consultants by the donors is affecting the progress of the project. Total expenditure on the project to date has been Rs 64 million in the current fiscal year against total budgeted allocation of Rs 3.169 billion in the PSDP. 

A copy of the brief on the project made available to Business Recorder reveals that the local expenditure on the project stood at Rs 5.089 billion up to June 2014, however, since then there has been a substantial decline in local expenditure. The project was approved by the Executive Committee of National Economic Council (ECNEC) in 2002 at a total cost of Rs 7.035 billion. The foreign exchange component (FEC) was projected at Rs 2.638 billion. The revised cost of the project is Rs 28.202 billion with FEC component of Rs 10.047 billion and tentative completion date is April 2017. 

The foreign funding of the project includes: $97 million by the Saudi Fund for Development (SFD) with $91 million for civil works and $5.86 million for consultancy services, $37 million by Kuwait Fund for Development and $30 million by the Opec Fund for International Development. 

Land acquisition for the project is also an issue as the area for switchyard is being acquired through the District Management of Chitral and the matter is being pursued for early site possession. The authorities have also requested local and provincial governments to increase the security of foreigners given the present security alert issued by the government. WAPDA officials made a presentation to the National Assembly's Standing Committee on Planning and Development on the progress of the Golan Gol project a couple of days ago, an official added. 

Business Recorder, 03 March 2015

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