Prime Minister Shehbaz Sharif has established a judicial commission, led by a former judge, to investigate the ongoing issues surrounding the Neelum Jhelum Hydropower Project (NJHP), which has seen massive cost overruns exceeding Rs500 billion, according to Federal Minister for Planning Ahsan Iqbal.
The commission is tasked with identifying the individuals responsible for the delays and alleged mismanagement, holding them accountable for the failure to bring the project into operation.
Planning Minister Ahsan Iqbal explained on Thursday that two committees were initially formed to address the issue—one chaired by himself and another led by Shahid Khan. These committees were later merged, and the combined report was submitted to the Prime Minister.
Now, the newly constituted judicial commission will further investigate the matter and initiate proceedings against those found negligent in their duties.
In January, a government committee, chaired by the Federal Minister for Power, revealed that consumers had been forced to bear an additional cost of Rs167.787 billion—equivalent to Re0.7551 per unit—due to the unavailability of the 969 MW NJHP from FY 2022-23 to 2024-25. This financial burden resulted from the need to rely on more expensive power sources in place of the hydropower project.
Despite the extra cost on consumers, sources said that Neelum Jhelum Hydro Power Company (NJHPC) has not received capacity payments during the plant’s closure, due to the “take and pay” tariff structure.
The Neelum Jhelum Surcharge (NJS) funds have been treated as grants, reducing the plant’s tariff and excluding capacity payments, which contributed to the financial challenges.
The issue began after the collapse of the headrace tunnel, prompting Prime Minister Sharif to establish a high-level committee on July 14, 2024, to assess the financial impact of the closure on end-user tariffs and ensure consumers were protected from further charges. The committee, led by the Federal Minister for Power, consists of key stakeholders, including the Federal Minister for Water Resources, the Chairman of Wapda, and the Chairman of Nepra, among others.
At its first meeting on July 19, 2024, the committee reviewed the impact of the headrace tunnel collapse on the plant’s operations and finances. The committee also explored measures to shield consumers from future financial losses stemming from structural flaws in power projects.
