Mega hydel projects being made lucrative for investment

ISLAMABAD: The provinces and territories of AJK, GB and Fata on Tuesday agreed on a draft policy specifically designed for mega hydel projects by Wapda under which indicative projects of 24,200MWs of electricity, including the Diamer-Bhasha Dam and Bunji on the Indus Cascade, would be extended to private foreign firms, mainly Chinese companies, for swift implementation after facing a poor response from multilateral donors.

The Indus Cascade with the drop of 7,030 feet starting from Shyok hydropower project to Kalabagh Dam has an identified hydro generation potential of 40,000MWs whereas the Indus Basin has a total potential of hyro generation of 100,000MWs.

To tap the untapped hydro generation potential, in the new policy, exemptions in duties and taxes during the construction phase and income tax holiday for the initial five years of operation will be offered to private investors.

However, major stakeholders in mega hydropower projects — AJK, G-B and Fata — had come up with the demand to raise the hydel tariff rate like KP to increase their share in net hydel profit in the new draft policy for development of mega hydel power projects.

Zafar Mehmood, the Chairman Wapda, while sharing the broad contours of the draft policy with a select group of journalists here on Tuesday, said that Wapda has come up with an innovative draft policy specifically designed for mega hydel projects laced with two options i.e. encouraging the private sector to exploit the untapped hydro potential by offering attractive incentives and sharing of responsibilities between the public sector entities and private investors.

He said a meeting was held here on Tuesday for consultations on the proposed draft policy with stakeholders that include the provincial governments, territories of Fata, G-B and AJK, and federal entities such as Private Power Infrastructure Board (PPIB), Central Power Purchasing Agency (CPPA), and Nepra in which the provinces asked what will be the fate of the project after 30 years and will it be handed over to the provinces or territories like G-B, AJK and Fata? They were told legally it was not possible and the projects will be placed with Wapda.