Pakistan’s 969-MW Neelum-Jhelum Hydropower Project will remain offline for at least two more years due to a rock burst fault that occurred last year, the National Electric Power Regulatory Authority (NEPRA) was informed. The extended shutdown has already resulted in significant financial losses and deprived consumers of low-cost electricity.
The Neelum-Jhelum Hydropower Project has been out of operation since May 2024 due to the structural fault that damaged its underground tunnel system. The absence of the plant from the national grid continues to drive up generation costs and exacerbate Pakistan’s circular debt crisis. Project management had already informed the government about the extended downtime.
The project, which was awarded in July 2007, was completed in 10 years at a cost of Rs. 500 billion ($4.7 billion at the then exchange rate) and was commissioned in August 2018.
According to a news report, the update came during a NEPRA hearing on a petition filed by the Central Power Purchasing Agency (CPPA), which is seeking a Rs. 0.65 per unit reduction in June’s fuel cost adjustment, which could save consumers around Rs. 8 billion if approved.
CPPA attributed the reduction to cheaper fuel prices, which lowered generation costs to Rs. 7.68 per unit from a reference cost of Rs. 8.33.
During the hearing, private-sector representatives criticised the government for not fully passing on the previously announced Rs. 1.71 per unit reduction linked to petroleum levies, with industrial tariffs rising to Rs. 35 per unit. “The cost of doing business is unbearable,” one participant remarked.
NEPRA officials also faced questions regarding preferential gas supply to the Jamshoro Power Plant and tariff hikes for bagasse-based sugar mill projects. A NEPRA case officer defended the revised rates, stating they were necessary to address outstanding dues, not to provide special treatment.
NEPRA chairman instructed power distribution companies to present detailed statistics on loan defaults and the impact of circular debt at a quarterly adjustment hearing scheduled for August 4.
