ISLAMABAD: The Auditor General of Pakistan has reported that the Neelum-Jhelum Hydropower Company incurred losses exceeding Rs29.41 billion, highlighting persistent operational disruptions and financial challenges facing the major hydropower project.
According to the audit report, the prolonged shutdown of the project’s powerhouse resulted in an estimated loss of Rs99.17 billion. The report also noted that investigations into the repeated collapses of the headrace and tailrace tunnels have yet to be completed.
The audit found that the company’s financial performance has been in decline since the 2022–23 fiscal year, largely due to repeated operational interruptions and the high costs associated with repairing damaged infrastructure.
The report stated that electricity generation remained completely suspended from July 2022 to August 2023 following the collapse of the tailrace tunnel, resulting in a significant loss of revenue and affecting the project’s financial sustainability.
According to the audit, the powerhouse has remained out of operation since May 1, 2024, after the collapse of the headrace tunnel. The continued closure has further compounded the project’s financial difficulties.
The report added that the costs of repairing and rehabilitating both tunnels have substantially increased the financial burden on the company.
Another challenge identified by the Auditor General was the project’s inability to obtain approval of its reference tariff from the National Electric Power Regulatory Authority (NEPRA), a factor the report said has contributed to the company’s ongoing financial problems.
The audit also pointed out that insurance claims related to the losses caused by the tunnel failures and operational disruptions had not been secured, leaving the company without compensation for a significant portion of the damages.
The Neelum-Jhelum Hydropower Project is one of Pakistan’s major hydroelectric generation facilities and plays an important role in the country’s energy sector. Repeated technical issues affecting the tunnels have raised concerns about the project’s long-term operational reliability and financial viability.
In its recommendations, the Auditor General called for the pending investigations into the tunnel failures to be completed without further delay and urged the relevant authorities to take the necessary measures to restore the powerhouse to full operation as soon as possible.
The report emphasized that timely completion of the investigations and restoration of electricity generation are essential to reducing further financial losses and improving the project’s overall performance.
The audit findings are expected to draw attention from policymakers and the energy sector as authorities consider measures to address the project’s technical challenges, strengthen oversight, and restore one of the country’s key hydropower assets.
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