According to reliable sources, the tariff for the Neelum-Jhelum hydro-power project (NJHP) could see a decrease in wake of a reduction in re-lending rate. This request was put forward to the concerned authorities by the Water and Power Development Authority (WAPDA) in which they petitioned the government to decrease the mark-up on foreign loans as the re-lending for the NJHP project is being provided at high interest rates.
It has been learnt that Economic Affairs Division (EAD) is charging 15pc interest on re-lending to different government organizations, although these loans are being secured at much lower mark-up from foreign entities. Provinces are being charged a lower mark-up in comparison to that being offered to other government organizations. And for the NJHP project, the government is charging a mark-up of 15pc per year on the re-lending of foreign loans to WAPDA. This request to reduce the mark-up rate could ensure a decrease in the production cost of electricity from the NJHP project. If the mark-up rate reduction request is accepted, the cost of electricity per unit could fall to Rs 9.32 per unit from the Rs 13.12 per unit originally estimated.
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