ISLAMABAD: The Auditor General of Pakistan (AGP) has declared the Rs507 billion Neelum-Jhelum Hydropower Project a complete failure. The report highlights poor planning, weak execution, tunnel collapses, delays, and massive cost overruns.

The AGP said the project failed to secure Pakistan’s water rights and did not deliver the promised cheap electricity. The power plant faced repeated tunnel collapses, raising doubts about design and construction quality.

The audit report, presented to the president and parliament, was based on Wapda’s responses. It pointed out delays despite the use of tunnel boring machines. Frequent design changes also slowed down the work.

The project missed key goals. It failed to generate the planned 5,150 GWh annually, did not establish rights over the Neelum River, and lost opportunities to earn carbon credits. Environmental safeguards were also ignored.

Although the first unit was commissioned in 2018, contractors left work incomplete. Spare parts were not supplied, and key obligations remained pending. In 2022, a major collapse in the tailrace tunnel shut down the powerhouse until March 2023, causing huge generation losses and worsening load-shedding in Pakistan.

The cost of the project jumped from Rs15 billion in 1989 to over Rs507 billion by 2018. Delays increased the cost by Rs338 billion. Resources were mismanaged, and timelines were ignored.

The AGP report also exposed financial losses. These include Rs70 billion in lost revenue due to tariff issues, Rs20 billion in generation losses from the tunnel collapse, and Rs42 billion in unsettled insurance claims. Contractors also benefited from excess payments and incomplete works.

The report concluded that the Neelum-Jhelum Project failed on every front. It did not achieve energy targets, water rights, or financial recovery. Instead, it left behind huge debts, structural faults, and unresolved disputes.