The cost of Pakistan’s Tarbela 5th Extension Hydropower Project has surged to about Rs316 billion after ECNEC approved a major revision, despite concerns over project management and previous structural failures. The Executive Committee of the National Economic Council approved a 282 percent upward revision in the project cost. The original estimate stood at about Rs82 billion. The latest approval adds roughly Rs234 billion to the bill. Read More: $5bn Neelum-Jhelum hydropower project to stay offline until 2028 Deputy Prime Minister Ishaq Dar chaired the ECNEC meeting. The committee approved 16 development projects with a combined estimated cost of Rs1.15 trillion. Around Rs320 billion of that amount represents additional costs linked to delays and price escalation. Cofferdam Failure Raised Serious Questions The Tarbela project has faced delays, cost pressures and questions over oversight. Planning Minister Ahsan Iqbal had earlier “expressed serious concerns over the project’s management, transparency, and oversight mechanisms,” according to the Planning Commission. An official inquiry also examined the collapse of the project’s downstream cofferdam. Investigators concluded that the failure was “not caused by flood but by change in design from roller-compacted concrete to rock-fill dam”. The inquiry also identified inadequate supervision and delayed administrative action. It linked those failures to structural damage, project delays and financial losses. A separate government inquiry held the contractor, consultant and WAPDA responsible for the collapse. It also found that river flows remained within historical levels rather than reaching exceptional flood conditions. Read More: Scientists Create Solar Device That Turns Desert Air Into Drinking Water The Finance Ministry had sought justification for the cost escalation before ECNEC approval. It also asked WAPDA to explain the repayment mechanism because international lenders are financing the project. The World Bank and Asian Infrastructure Investment Bank are providing $390 million and $300 million respectively. The project will add 1,530 megawatts through three 510MW generating units at Tarbela Dam. ECNEC Approves Rs1.15 Trillion Development Package ECNEC also cleared several major transport, water and social development schemes. The committee approved the Lahore-Sahiwal-Bahawalnagar Motorway at Rs407 billion. It retained the original 295-kilometre alignment. The first 18.5-kilometre section from Lahore Ring Road to Raja Jang Interchange will cost Rs49 billion. The 48-kilometre Khwazakhela-Besham Expressway received approval at Rs116.6 billion. ECNEC also cleared a Rs29 billion road connecting Gilgit-Baltistan with Azad Kashmir. The Rathoa Haryam Bridge received approval at Rs10.8 billion. Its original estimate stood at only Rs1.4 billion. Read More: New Saudi Water Rules Could Cost Violators Up to SR200,000 Meanwhile, Lahore’s wastewater treatment project received Rs56.6 billion. A poverty alleviation programme covering 10 districts of southern Punjab secured Rs29.7 billion. ECNEC also approved Rs10.6 billion for the Fulbright scholarship programme, which aims to support 816 scholarships. The approvals underline the growing financial burden caused by delays and revised costs across major public projects. Tarbela 5 remains one of the most closely watched because of its scale, foreign financing and importance to Pakistan’s future electricity supply.
$5bn Neelum-Jhelum hydropower project to stay offline until 2028
Pakistan’s nearly $5 billion Neelum-Jhelum Hydropower Project will remain out of service until at least March 2028, extending its shutdown to almost four years and keeping one of the country’s cheapest electricity sources off the national grid. The disclosure came during a meeting of the Senate Standing Committee on Water Resources. Wapda Chairman Lt Gen (retd) Muhammad Saeed told lawmakers that repair work on the 969-megawatt project was progressing and expressed confidence that electricity generation would resume by March 2028. The project stopped operating in May 2024 after a severe rock burst damaged its headrace tunnel. Since then, consumers have continued paying the Neelum-Jhelum surcharge through electricity bills despite receiving no power from the plant. Saeed said geological studies carried out before construction had already identified the project area as a seismic zone. He added that authorities were still investigating the tunnel failure to determine its exact cause. The prolonged closure has deprived the national grid of low-cost hydropower. It has also increased dependence on more expensive thermal power generation, adding further pressure on Pakistan’s growing circular debt. Commissioned in August 2018 after nearly a decade of construction, the project cost around Rs500 billion, or about $4.7 billion at the exchange rate prevailing at the time. It was originally awarded in July 2007 and was designed to generate 969MW of electricity from the Neelum River in Azad Jammu and Kashmir. Senators seek accountability over tunnel collapse The committee meeting, chaired by Senator Jam Saifullah Khan, saw lawmakers demand a transparent investigation into the failure of one of Pakistan’s most expensive public infrastructure projects. Senators questioned whether geological conditions alone caused the tunnel collapse. They also asked investigators to examine possible design flaws, construction defects or operational failures. Lawmakers insisted that authorities should identify any negligence and hold those responsible accountable. The committee also reviewed Pakistan’s broader water security challenges. Saeed warned that the country urgently needs to expand its water storage capacity. Members noted that Pakistan has not constructed a major dam since Tarbela and Mangla, while India has built around 5,000 dams over the same period. Lawmakers also criticised a presentation by Suparco on satellite monitoring of river encroachments. They said the briefing lacked clarity and failed to answer the committee’s questions. Dam safety law advances as Nai Gaj project remains stalled The committee also received an update on efforts to strengthen dam safety across Pakistan. Officials informed lawmakers that a draft Dam Safety Council Bill, prepared with technical assistance from the Asian Development Bank, has now been finalised. The proposed law aims to establish a comprehensive legal framework for monitoring and regulating dam safety nationwide. Wapda also briefed the committee on the stalled Nai Gaj Dam project in Sindh. Officials said litigation continues after the original contractor allegedly submitted a fake bank guarantee, causing estimated losses of about Rs23 billion. Once completed, the Nai Gaj Dam will help protect Dadu and Sehwan from flooding and irrigate nearly 28,000 acres of farmland. Officials further told the committee that Wapda currently supplies electricity to the national grid at an average cost of Rs3.83 per unit. The authority also generates around 32 billion units of electricity every year.
