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Chashnupp may be delayed by a year due to lack of funds

TAHIR DHINDSA

ISLAMABAD: The commissioning of 184-megawatt Chashma hydro-electric power station is likely to be delayed for another year due to financial problems, official sources said here on Wednesday. The project is already late by one year from its original completion date.

Talking to Business Recorder, sources said there was a great shortage of fund due to collapse of the Citibank loan, agreed with the consortium of companies that was handling the project.

December 1998 was the actual commissioning date of the project, which now only could be completed by the end of 2001. The delay has occurred due to shortage of rupee portion of the loan.

Sources said Wapda Chairman Lt General Zulfiquar Ali Khan took up the issue with the government after the project was virtually stalled.

Now, Wapda has requested the Economic Affairs Division for a $70 million support, for which the EAD, in turn, has requested the Asian Development Bank for support. The bank has promised to look into the matter, but has yet refrained from making any firm commitment.

The consortium, which is handling the project, consists of three major international partners. They are: Marubeni, which is responsible for power house (EM-1) project and the loan is $100 million: Hyundai, which is responsible for the civil works, involving a major portion of rupee component; and Cegelac, the French switching company, which is doing all switching work at the project.

The government had been reluctant to provide the rupee counterpart funding, which Wapda could not arrange due to its own poor financial health. But, now with the improved circumstances the government has decided to provide a liquidity injection to the utility company. Wapda in turn has promised to provide the rupee counterpart funding. Sources said that the main reason for delay was delayed custom clearance of equipment.

The energy sector team of the Asian Development Bank (ADB), which is likely to decide the fate of the project, will look into it once the discussions with the government are concluded as a whole.

The Bank mission is currently carrying on discussions with the government.