ISLAMABAD - The government is likely to waive off the Central Development Working Party’s (CDWP) condition regarding Public-Private Partnership (PPP) for the construction of Hanzil Hydropower project at Gilgit.

Gilgit Baltistan has requested the federal government to remove the CDWP condition of Public-Private Partnership (PPP) for the construction of Hanzil Hydropower project, the working paper of the project said.

The proposed project is a medium head run of the river scheme which envisages construction of 20 MW hydropower project located on the right bank of Gilgit River a tributary of Indus River at about12 km from Gilgit town. The total cost of 20 Megawatts (MW) Hanzil Hydropower Project , would be Rs 6.248 billion and would be completed in four years. Rs 1 billion have already been allocated in the PSDP 2015-16, while the project has a Foreign Exchange EC component of Rs 948.37 million.

The Ministry Water and Power Gilgit Baltistan requested that the condition of PPP mode be deleted from the CDWP decision because PPP mode is not possible in GB due to various reasons.

The reason forwarded by Gilgit Baltistan (GB) government for waiving off the CDWP conditions includes; National Grid is not connected to GB and Nepra jurisdiction cannot be extended to the area. There also exists no local policy for PPP or IPP mode. The load and diversity factor are very low in the area as there exists no heavy industries due to which repayment to the investors through tariff is not possible.

In October 2013 a meeting was held on the request of GB where the representative of IPDF, Finance Division also acknowledged that PPP mode is not viable option for the implementation of these projects.

“The proposed project will help to exploit the potential of hydropower available on Gilgit river to generate 20 MW output, which will augment power to existing electricity network of areas to resolve power shortage to consumers at Gilgit and its surrounding towns,” the working paper explained.

In the CDWP meeting held last month, the Planning Commission has raised several questions about the project financing, annual energy generation of the project, cost per megawatt, civil works cost, plant factor, sedimentation removal technique, detail engineering design, validation of the feasibility, dispersal of power, land requisition etc. CDWP has recommended the project to the approval of ECNEC, as the project was above the authorised limit of forum which is up to Rs. 3 billion. The CDWP also asked the sponsor of the project to remove the concerns raised by the planning ministry.