ISLAMABAD: Water and Power Development Authority (Wapda) on Wednesday signed two agreements worth Rs 179.4 billion with a Chinese firm, China Gezhouba Group Company (CGGC), for construction of main civil works of stage-I of Dasu hydropower project which will have an installed capacity of 2160MW with six units ( 360 MW each).

The worth of contract on MW-01 is Rs 115 billion and MW-02 Rs 64.4 billion. The contract MW-01, which would be completed in about five years, includes construction of main dam, appurtenant structures and hydraulic steel structures. The contract MW-02 comprises construction of underground power complex, tunnels and hydraulic structures. MW-Dasu Hydropower Project is being constructed by Wapda on River Indus upstream of Dasu Town in Kohistan District of Khyber Pakhtunkhwa (KP) province.

Dasu Hydropower Project General Manager/Project Director Javed Akhtar and CGGC representative Tan Bixuan signed contracts on behalf of their organizations. Federal Water and Power Minister Khawaja Muhammad Asif was the chief guest at the ceremony. Water and Power State Minister Chaudhary Abid Sher Ali and WAPDA Chairman Lt Gen Muzammil Hussain (retd) also attended the ceremony. WAPDA Member (Water) Nasir Hanif, Dasu Hydropower Project management, representatives of the project Consultants and CGGC were also present on the occasion.

The project having a cumulative generation capacity of 4320MW will be completed in two stages in five years - each stage having a generation capacity of 2160 MW. The project would contribute more than 12 billion units per annum to the national grid. The Stage-II, after its completion, will also provide another 9 billion units to the system every year.

Addressing the ceremony, Federal Minister Khawaja Muhammad Asif said that the government is committed to optimal utilization of hydropower resources for generating low-cost electricity to eliminate load-shedding and provide relief to people. Dasu Hydropower Project, he said, is a manifestation of this commitment.

The minister said, the World Bank is partially financing stage-I for which a loan agreement of $ 580.40 million IDA-I credit and partial credit guarantee of $460 million were signed (effective from November 2014). Wapda is in process of arranging commercial financing from foreign sources for the remaining project process. An agreement with local commercial banks of Rs 144 billion will be signed during the current month. International banks would provide $ 800 million. An agreement with banks for the credit of $ 350 million will be signed next month.

According to Chairman Wapda, the complete 3420MW run of the river project requires $ 6.2 billion financing, of which $ 4.2 billion is for stage-I. The phase -II of the project would be completed after Diamer-Bhasha is completed.

In reply to a question, the minister said that KPK would get Water Usage Charges (WUC) in accordance with the current mechanism being implemented by Wapda.

Answering another question, Khawaja Asif said the government has provided improved power supply to consumers during summer every year starting from 2013. He acknowledged that the government has not overcome power crisis so far.

"There was a lot of noise on non provision of electricity in 2013 but it was subsequently lowered in 2014, 2015 and 2017 and will further reduce during next summer," he continued.

The minister further stated that 969MW Neelum-Jehlum hydropower project would start generation during the first quarter of 2018, adding that work would also start on two more mega projects i.e. 1.2 MAF Mohmand hydropower project and ground breaking of Daimar Bhasha dam. He said, financing is available for both projects and the government intends to start work on both projects immediately.

Khawaja Asif was reluctant to speak about expected tariff of Dasu hydropower project, saying that it is premature to discuss tariff which is to be determined by the National Electric Power Regulatory Authority (Nepra).

Minister for Water and Power dispelled the impression that China is sending its prisoners as workers to Pakistan.

Khawaja Asif said he would not blame anybody for delay in Dasu hydropower project, saying that when PML (N) came into power, they had the choice to either do Dasu or Diamer-Bhasha but the government opted to work on both projects. Now both projects are a reality, he added.

Answering another question, he said he would not comment on the Indus Water Treaty, "which is a sacrosanct document." He added that the Treaty should be implemented in letter and spirit and if India deviates from the Treaty at any stage, a mechanism is always available with Pakistan to stop that deviation and ensure treaty's enforcement.

Khawaja Asif further said that transmission lines are available for those projects which are under construction. He said transmission lines have not been upgraded in some areas on grounds that some people take very little time to steal old silver wires.

He further stated that the government's target is to add 10400MW to the system by 2018. Presently, the gap between demand and supply is around 5000MW or 5500MW but by early 2018, there would be sufficient generation to bridge demand-supply gap.

Earlier, Wapda Chairman Lt-Gen Muzammil Hussain (retd) in his welcome remarks said that today is an important day for Dasu Hydropower Project. Underlining the significance of the project, he urged upon CGGC to complete the contracts within the stipulated timeframe by adhering to the quality of work specified for the project

The representative of CGGC said that Dasu is one of the most challenging projects and it would be beneficial for the socioeconomic development of the people of the area.