LAHORE, Dec 9: The Ghazi Brotha Hydel Power Project has already suffered a loss of over Rs80 billion — Rs70 billion due to delays in its completion and more than Rs10 billion have been misappropriated.

A report prepared by the director-general (audit), Wapda, has pointed out that as per the feasibility report, the estimated cost of the project was Rs42.045 billion as of July 1990 ($1=Rs22) and was expected to be completed by 1997-98.

Thereafter, the PC-I of the project was approved on July 19, 1994 with a cost of Rs89.840 billion with a completion period of 56 months. The main works were awarded in December 1995. The project, therefore, had to be completed by September 2000.

A World Bank Review Mission expected on June 15, 2000 that “commissioning of the first turbine and generator would begin on August 14, 2002. Test on the last 5th unit will begin on April 1, 2003 and the project will commence on July 15, 2003.”

The report indicates a delay of about 24 months. Due to the suspension and slow pace of work, the project will not be functional even on the expected date of the World Bank Review Mission.

However, if the 24-month delay is considered definite, the report said, even then the annual loss due to increase in the cost of project comes to $190 million (Rs11,400 million) and the authority has to bear the extra cost of Rs22,800 million on account of a delay of two years as admitted by the consultants in their letter dated Sept 16, 1997.

Apart from this, the consultant also highlighted the generation loss of Rs24 billion per year. Thus, Wapda has to bear a loss of Rs35.400 billion (Rs24+11.400 billion) per year due to the increased cost of the project and generation loss (over Rs70 billion for two years, and still counting).

The person responsible for this has no excuse, the report added. Therefore, the report says, the issue of delay requires high-level investigation.

The project is of immense importance and is intended to contribute0 1,450mw to the Wapda system, which is more than any other power house of Wapda system, except Tarbela.

On-time completion of such projects is of great significance, specially where foreign funds are involved. Unfortunately, the mega project has become a classic example of poor management with undue and irregularities, it said and pleaded for fixing responsibility on those for the delay and the guilty be taken to task.

In addition to the above-mentioned loss, the report has also pointed out misappropriation of over Rs10 billion in payments and other heads of the projects.

A huge loss of Rs1.247 billion was caused by ignoring the funding offer from local donors.

The report also pointed out a loss of Rs1.590 billion due to non-imposition of late delivery (LD) charges against Ms GBC — the contractor of barrage and power channel.

A huge amount of Rs1.036 billion was paid to Ms GBC against its claims, which, according to the auditor, were avoidable. A payment of Rs943 million was made to a local company under the head of doubtful consultancy and another Rs849 million to a third company over and above the contractual provisions.

Another loss of Rs528.309 million was suffered due to the non- recovery of interest on a revolving account of the project consultant. A huge loss of Rs2.456 billion has been pointed out by the DG Audit report due to non-maintenance of inventory records.

The report has also looked into land requisition involving misappropriation of Rs2.9 billion. But since the cases have already been referred to different agencies for investigation, they were not included in the main report.

It may be mentioned that the DG Audit report would now be sent to the authority and for discussion with it.

The chances of dropping some parts of the 30-para report cannot be ruled out. But, an audit official of Wapda claimed that the report was prepared carefully and after thorough investigation.

According to him, there might be some minor adjustments here and there, but chances of any big drop were little.