Project Completion Report

PCR: PAK 26409

Ghazi Barotha Hydropower Project (Loan 1424-PAK) in Pakistan

August 2005

CURRENCY EQUIVALENTS

Currency Unit – Pakistan Rupee/s (PRe/PRs)

At Appraisal At Project Completion (October 1995) (January 2005) PRe1.00 = $0.0314 $0.0169 $1.00 = PRs31.79 PRs59.00

ABBREVIATIONS

ADB – Asian Development Bank BUP – built-up property EA – executing agency EIRR – economic internal rate of return EOT – extension of time FIRR – financial internal rate of return GBTI – Ghazi Barotha Taraqiati Idara ICB – international competitive bidding IDB – Islamic Development Bank JBIC – Japan Bank for International Cooperation LVC – land valuation committee M&E – mechanical and electrical PCR – project completion review RAP – resettlement action plan T&D – transmission and distribution TA – technical assistance TOC – taking over certificate WACC – weighted average cost of capital WAPDA – Water and Power Development Authority

WEIGHTS AND MEASURES

A (ampere) – unit of electric current GWh (gigawatt-hour) – 1,000,000 kWh KA (kilo ampere) – 1,000 A km (kilometer) – 1,000 meters kV (kilovolt) – 1,000 V kW (kilowatt) – 1,000 W kWh (kilowatt-hour) – 1,000 Wh MW (megawatt) – 1,000,000 W W (watt) – unit of active power Wh (watt-hour) – unit of energy V (volt) – unit of electrical voltage

NOTES

(i) The fiscal year (FY) of the Government and WAPDA ends on 30 June. FY before a calendar year denotes the year in which the fiscal year ends, e.g., FY2005 ends on 30 June 2005. (ii) In this report, "$" refers to US dollars. vii

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CONTENTS Page

BASIC DATA i

MAPS vi I. PROJECT DESCRIPTION 1 II. EVALUATION OF DESIGN AND IMPLEMENTATION 1 A. Relevance of Design and Formulation 1 B. Project Outputs 2 C. Project Costs 3 D. Disbursements 4 E. Project Schedule 4 F. Implementation Arrangements 6 G. Conditions and Covenants 6 H. Related Technical Assistance 7 I. Consultant Recruitment and Procurement 7 J. Performance of Consultants, Contractors, and Suppliers 9 K. Performance of the Borrower and the Executing Agency 9 L. Performance of the Asian Development Bank 10 III. EVALUATION OF PERFORMANCE 10 A. Relevance 10 B. Efficacy in Achievement of Purpose 11 C. Efficiency in Achievement of Outputs and Purpose 11 D. Preliminary Assessment of Sustainability 11 E. Environmental, Sociocultural, and Other Impacts 11 IV. OVERALL ASSESSMENT AND RECOMMENDATIONS 14 A. Overall Assessment 14 B. Lessons Learned 14 C. Recommendations 15 APPENDIXES 1. Chronology of Main Events 16 2. Principal Project Data 18 3. Appraisal and Actual Project Costs 24 4. Currency Equivalents 25 5. Summary of Contracts Funded 26 6. Projected and Actual Disbursements 28 7. Implementation Schedule 29 8. Project Coordination Chart 30 9. Status of Compliance with Loan Covenants 31 10. Financial Statements 35 11. Water and Power Development Authority Electricity Tariffs 38 12. Planned and Actual Procurement Schedule 39 13. Financial and Economic Reevaluation 41 14. Data on Land, Resettlement, Income Loss, and Compensation 46 15. Quantitative Assessment of Overall Project Performance 48

BASIC DATA

A. Loan Identification

1. Country Pakistan 2. Loan Number 1424-PAK 3. Project Title Ghazi Barotha Hydropower Project 4. Borrower Pakistan 5. Executing Agency Water and Power Development Authority 6. Amount of Loan $300 million 7. Project Completion Report PCR: PAK 893 Number

B. Loan Data 1. Appraisal – Date Started 3 July 1995 – Date Completed 20 July 1995

2. Loan Negotiations – Date Started 10 November 1995 – Date Completed 13 November 1995

3. Date of Board Approval 16 January 1996

4. Date of Loan Agreement 11 March 1996

5. Date of Loan Effectiveness – In Loan Agreement 9 June 1996 – Actual 20 June 1996 – Number of Extensions 1

6. Closing Date – In Loan Agreement 30 June 2002 – Actual 20 January 2004 – Number of Extensions 1

7. Terms of Loan – Interest Rate Currency-specific lending ($) – Service Charge 1% per annum – Maturity (number of years) 25 – Grace Period (number of years) 6

8. Terms of Relending – Interest Rate 14% per annum – Maturity (number of years) 25 – Grace Period (number of years) 6 – Second-Step Borrower Water and Power Development Authority

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9. Disbursements

a. Dates Initial Disbursement Final Disbursement Time Interval

28 June 1996 20 January 2004 7 years, 7 months

Effective Date Original Closing Date Time Interval

20 June 1996 30 June 2002 6 years

b. Amount ($ million)

Categorya Original Last Revised Amount Amount Undisbursedb Allocation Allocation Increased/ Disbursed Balance (Cancelled) 01 140.00 183.50 43.50 166.45 17.05 02 28.60 20.70 (7.90) 14.00 6.70 03 8.00 12.90 4.90 8.59 4.31 04 31.00 29.00 (2.00) 15.47 13.53 05 50.00 50.00 0.00 50.00 0.00 06 42.40 3.90 (38.50) 0.00 3.90 Total 300.00 300.00 0.00 254.51 45.49 a 01 = civil works for the barrage, 02 = gates equipment, 03 = cranes, 04 = transmission lines, 05 = interest and commitment charges during construction, 06 = unallocated, and 07 = local expenditure—civil works for the barrage. b An undisbursed loan amount of $45,493,361.98 was cancelled at loan closing (20 January 2004).

10. Local Costs (Financed) - Amount ($ million) 18.6 - Percent of Local Cost 2.6 - Percent of Total Cost 1.0

C. Project Data

1. Project Cost ($ million)

Cost Appraisal Estimate Actual

Foreign Exchange Cost 1,394.00 1,207.55 Local Currency Cost 806.00a 719.00b

Total 2,200.00 1,926.55 a $20.0 million of which is Asian Development Bank funds. b $18.6 million of which is Asian Development Bank funds. iii

2. Financing Plan ($ million)

Cost Appraisal Estimate Actual Foreign Local Total Foreign Local Total Exchange Currency Cost Exchange Currency Cost

ADB Financed 280.0 20.0 300.0 235.9 18.6 254.5 Cofinancing 884.3 62.7 947.0 764.8 38.6 803.4 WAPDA 229.7 723.3 953.0 206.9 661.8 868.7 Total 1,394.0 806.0 2,200.0 1,207.6 719.0 1,926.6 ADB = Asian Development Bank, IDC = interest during construction, WAPDA = Water and Power Development Authority.

3. Cost Breakdown by Project Component ($ million)

Component Appraisal Estimate Actual Foreign Local Total Foreign Local Total Exchange Currency Cost Exchange Currency Cost A. Base Cost 1. Land and Preparatory Works 0.9 117.9 118.8 0.0 174.4174.4 2. Civil Works 591.5 254.2 845.7 767.4 157.0 924.4 3. Electromechanical Equipment 307.1 62.7 369.8 147.7 6.7 154.4 4. Transmission Lines 51.8 13.0 64.8 30.1 6.6 36.7 5. Engineering and Administration 27.9 58.8 86.7 16.5 113.7 130.2 6. Import Duties 0.0 31.1 31.1 0.0 34.6 34.6 Subtotal (A) 979.2 537.7 1,516.9 961.7 493.0 1,454.7

B. Contingencies 1. Physical 116.1 53.5 169.6 150.0 20.0 170.0 2. Price 96.7 39.8 136.5 0.0 0.0 0.0 Subtotal (B) 212.8 93.30 306.1 150.0 20.0 170.0

C. Interest During Construction 202.0 175.0 377.0 95.9 206.0 301.9

Total Project Cost 1,394.0 806.0 2,200.0 1,207.6 719.0 1,926.6

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4. Project Schedule Item Appraisal Estimate Actual

Land Acquisition Dec 1994–Nov 1995 May 1996–Aug 2001 Relocation and Resettlement May 1995–Oct 1999 Oct 1994–present Preparatory Works (Construction) Jun 1995–Dec 1996 Aug 1994–Sep 1998 Main Civil Works (Construction): C1 Barrage Dec 1995–Mar 2000 Dec 1995–Dec 2003 C2 Power Channel Dec 1995–Mar 2000 Dec 1995–Dec 2003 C3 Power Complex Mar 1996–Jun 2001 Feb 1997–Dec 2004 Mechanical and Electrical Works: ME-01 Turbines and Auxiliaries Jun 1996–Jun 2001 Nov 1997–Apr 2004 ME-02 Generators and Auxiliaries Jun 1996–Jun 2001 Dec 1997–Apr 2004 ME-03 Transformers and Misc. Equipment Jul 1997–Sep 2000 Oct 1999–Jul 2004 ME-04 Cranes Dec 1995–Dec 1999 Dec 1996–Jun 2004 ME-05 High-Voltage Switchgear, Sep 1996–Dec 1999 Apr 1999–Apr 2004 Control, and Protection ME-06 Medium- and Low-Voltage Switchgear Mar 1997–Sep 1999 ME-07 Elevators Feb 1998–Mar 2000 ME-08 Diesel Generating Standby Sets Mar 1997–Sep 1999 Aug 1998–Oct 2004 ME-09 Gate Equipment Dec 1995–Jan 2000 Nov 1997–Apr 2004 ME-10 Isolated Phase Bus Aug 1997–Sep 2000 Jan 1997–Jul 2004 ME-11 Switchyard Steel Structures May 1997–Nov 1999 ME-12 Cables and Accessories Oct 1996–Jan 2000 ME-13 Miscellaneous Auxiliaries Sep 1996–May 2000 ME-14 Supervisory Control and Data Jun 1996–Mar 2001 Aug 1998–Oct 2004 Acquisition and Telecommunications ME-15 Transmission Lines Aug 1997–Mar 2000 Oct 1999–Nov 2004 ME-16 Penstocks Jul 1996–Dec 2000 Jan 1999–Jun 2003 . Misc. = miscellaneous. Note: In the actual schedule, ME-06–ME-08 and ME-10–ME-13 in the original appraisal were merged in ME-03 (Transformers and Misc. Equipment) for financing by Kreditanstalt für Wiederaufbau, and ME-14 and ME-15 were redesignated as ME-08 and ME-10, respectively.

5. Project Performance Report Ratings Ratings

Development Implementation Implementation Period Objectives Progress From 1 January 1996 to 31 December 1996 Satisfactory Satisfactory From 1 January 1997 to 31 December 1997 Satisfactory Satisfactory From 1 January 1998 to 31 December 1998 Satisfactory Partially Satisfactory From 1 January 1999 to 31 December 1999 Satisfactory Partially Satisfactory From 1 January 2000 to 31 December 2000 Satisfactory Partially Satisfactory From 1 January 2001 to 31 December 2001 Partially Satisfactory Satisfactory From 1 January 2002 to 31 December 2002 Partially Satisfactory Satisfactory From 1 January 2003 to 31 December 2003 Partially Satisfactory Satisfactory From 1 January 2004 to 20 January 2004 Partially Satisfactory Satisfactory

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D. Data on Asian Development Bank Missions No. of No. of Specialization Name of Mission Date Persons Person-Days of Membersa Fact-Finding Mission 08–23 Mar 1995 6 80 a, b, c, d, f Appraisal Mission 03–20 July 1995 5 80 a, b, c, e Inception 16–21 Nov 1996 2 12 a, c Review Mission 1 3–10 Aug 1997 2 16 c Review Mission 2 26 Nov–10 Dec 1997 1 5 c Review Mission 3 15–20 Dec 1998 2 10 c, g Review Mission 4 11–24 April 1999 2 14 c, d Review Mission 5 21 Sept–1 Oct 1999 5 10 d, j, k Review Mission 6 29 May–1 June 2000 1 4 j Review Mission 7 15–21 Feb 2001 3 12 h, i, j Review Mission 8 26 Aug–2 Sept 2002 3 21 c, g, i Review Mission 9 26–28 May 2003 1 3 c Review Mission 10 26 Sept–2 Oct 2003 2 14 c, i Project Completion Reviewb 17–28 Jan 2005 3 33 c, d, i a a - financial analyst, b - programs officer, c - engineer, d - economist, e - counsel, f - environment specialist, g - project implementation officer, h - resettlement specialist, i - project analyst, j - project specialist. b The project completion report was prepared by Pil-Bae Song, senior energy specialist/mission leader; and Anicia Q. Rullan, associate operations analyst, and an infrastructure economist (staff consultant).

o 73 o 00'E 64 00'E

P A K I S T A N 35 o 00'N 35 o 00'N Peshawar

GHAZI BAROTHA HYDROPOWER PROJECT Barotha (as completed) Tarbela Dam N.W.F.P. ISLAMABAD Lahore

Topi PUNJAB Quetta D.I. Khan

ahangira Galla To J PAKISTAN BARRAGE BALOSCHISTAN

Ghazi Khalo SINDH Isa 26o 00'N 26 o 00'N Jallo Hyderabad Bhai R Karachi VE RI ARABIAN S SEA K DU a IN o b 64 00'E o u 73 00'E l

R i v Banda Feroze To e Pe r sh Ghurghushti aw ar POWER CHANNEL Hazro Punjwana N

Musa 0 2 4 6 8 10 Kudlathi Gondal GT Ro ad Kilometers Haji Shah Hattian Kamra Complex

R

E Lawrencepur To Rawalpindi National Capital V RS Rumian

I

R

Provincial Capital

S

U District Capital D Dakhner North

N I Headpond Village ad Ro ess Power Channel Acc Barotha Attock City Railway South r Headpond ive ro R Road Ha River Gariala Provincial Boundary T o F

0 a International Boundary te 5 h M - ja 0 n 9 g Boundaries are not necessarily authoritative. a 4 p 3 POWER COMPLEX

R 1 M Map 2

P A K I S T A N GHAZI BAROTHA HYDROPOWER PROJECT BARRAGE LAYOUT (as completed)

Right Flank Road Link

Fuse Plug

N Barrage Pond

Spur

Right Guide Bank

Left Guide Bank

Dividing Island

Control Building

Standard Byas Skimming Platform

Power Channel

Head Regulator Undersluice

Cunette

Separating Dyke GHAZI

Road

05-0943b RM Map 3 BARRAGE N Power Channel Bridge Railway Road

To Islamabad

. Road

G.T POWER CHANNEL N K I S T A (as completed)

P A I N D U S R I V E R E V I R S U D N I POWER CHANNEL AND ANCILLARY WORKS POWER CHANNEL GHAZI BAROTHA HYDROPOWER PROJECT BAROTHA HYDROPOWER GHAZI

asal To B To Peshawar

ar aw sh

Pe POWER o COMPLEX T

05-0943e RM P A K I S T A N GHAZI BAROTHA HYDROPOWER PROJECT POWER COMPLEX LAYOUT (as completed)

Power Channel

North Headpond

Intake

Forebay Tail Regulator

Powerhouse

I Switchyard N

D South Headpond

U Spillway S

R

I Barotha V

E Bridge Road R Tailrace Channel N 0 5 M - 0 9 a 4 3 p c

R 4 M

I. PROJECT DESCRIPTION

1. The Ghazi Barotha Hydropower Project was set up in the public sector by the Water and Power Development Authority of Pakistan (WAPDA), a government-owned utility. The Project was to divert water from the Indus River at Ghazi (Map 1), which is 7 kilometers (km) downstream from Tarbela dam, to a 52 km power channel. The channel was to then transport the water to Barotha, where a capacity of 1,450 megawatt (MW), consisting of five units of 290 MW each, was to be installed to generate 6,600 gigawatt-hours (GWh) of power annually. The Project was a run-of-the-river project, with far less environmental and social impact than is often associated with large dams and reservoirs. The Project comprised three main components: (i) a barrage at Ghazi (Map 2), which is 7 km downstream from Tarbela dam; (ii) a 52 km channel from Ghazi to Barotha (Map 3); and (iii) a power complex at Barotha, with a 1,450 MW generating capacity (Map 4). Approximately 340 km of transmission lines were also to be installed by the Project.

2. The main objectives of the Project were to meet the demand for electric power in Pakistan by generating hydropower in an environmentally sustainable and socially acceptable manner, with minimal environmental and resettlement impacts. The power generated by the Project was also to help moderate the impact of higher costs of thermal generation in the private sector.

3. As energy was in short supply in Pakistan, a cost-effective approach to improving efficiency in transportation, conversion, and consumption of energy needed to be addressed. Technical assistance (TA) was therefore associated with the loan to formulate the Power Efficiency Project, to improve demand-side management and reduce power losses.1

4. Pakistan was the Borrower, with WAPDA acting as the Executing Agency (EA).2 An Asian Development Bank (ADB) loan of $300 million, from ordinary capital resources, was approved on 16 January 1996. Cofinancing of $947 million was also provided, comprising $350 million from the World Bank, $350 million from the Japan Bank for International Cooperation (JBIC),3 $147 million from Kreditanstalt für Wiederaufbau, $60 million from the European Investment Bank, and $40 million from the Islamic Development Bank (IDB).

II. EVALUATION OF DESIGN AND IMPLEMENTATION

A. Relevance of Design and Formulation

5. Pakistan was suffering from a severe shortage of generating facilities in year-round power generating capability. As a result, power supply restrictions (load shedding)4 had been resorted to since 1982. To overcome this, additional generating capacity of 7,000 MW was required by 2001. Although significant private sector thermal generating capacity, up to 5,792 MW, was hoped to be installed during 1995–2000, new hydropower capacity was also required. The Project was identified to support the Government’s least-cost development program of expansion of electricity generation, enhancement of reliability of power supply, and

1 Asian Development Bank. 1996. Technical Assistance to the Islamic Republic of Pakistan for the Power Efficiency Project. Manila. (TA No. 2525-PAK, for $850,000, approved on 16 January 1996). 2 The loan was re-lent by the Government to WAPDA at a rate of 14% interest, with a 25-year maturity and a 6-year grace period. 3 Formerly the Overseas Economic Cooperation Fund. 4 This had extended to as much as 39% of peak power demand during critical periods of the year. 2 improvement of power system control, thereby alleviating the acute power shortage situation in the country through the provision of urgently needed power generating plant additions.

6. ADB’s association with the Project started with the November 1994 development partner meeting in Paris, at which stage WAPDA had already commenced advance procurement action. In June 1994, prequalified bidders for the civil works packages were identified, and bid documents were issued in August 1994. Subsequently, the Government and the World Bank requested ADB to participate in the ongoing procurement. ADB recognized that the Project had been well prepared and agreed to support the Government’s efforts for early implementation of the Project.

B. Project Outputs

7. Appendix 1 provides a chronology of major events during project implementation. Due to the size and complexity of the Project and the various sources of financing, the Project was divided into various packages comprising civil works for the barrage, power channel, and power complex (C-01, C-02, and C-03, respectively). Detailed project data on the barrage, power channel, and power complex are shown in Appendix 2. A series of mechanical and electrical (M&E) works, in association with the civil works, were also undertaken.

8. The Barrage. The barrage across the Indus River, located near Ghazi, downstream from Tarbela, consists of several major components: gated head regulator, skimming platform, undersluices, open flume standard bays, dividing island, right and left guide banks, fuse plug embankment, separation dyke, cunette, road bridge over the barrage, control building, workshops, offices, and M&E installations. A taking over certificate (TOC) for works essential for impounding was issued on 16 June 2003, and the TOC for works not essential for impounding was issued in November 2003 (effective from 22 August 2003). Impounding of the barrage pond commenced in February 2003, and the maximum level was reached on 20 May 2003.

9. The Power Channel. The power channel is 52 km long and lined with reinforced concrete. The capacity is 1,600 cubic meters per second. Seventy-nine structures of different categories are on the channel, including bridges, superpassages, culverts, inlets, and escapes. The TOC for works essential for impounding was issued on 9 August 2003 (effective from 30 July 2003). Impounding of the power channel commenced on 9 April 2003.

10. The Power Complex. The power complex is located near the confluence of the Indus and Haro rivers, at Barotha. It consists of several components: powerhouse, with five 290 MW capacity generating units, having a total generating capacity of 1,450 MW; tail regulator; forebay; intake structure; penstocks (five); headponds (two); sill structures (two) and low-level outlets (two); spillway; tailrace channel; switchyard; and other associated installations. Most of the work, including the powerhouse and installation and testing of turbines, generators, and M&E equipment, has been completed. Several minor items at the power complex, however, have yet to be completed. Impounding of the forebay and south head pond was started in April 2003, simultaneously with the impounding of the channel. The tailrace channel was flooded on 18 April 2003, and its downstream cofferdam was removed.

11. The Mechanical and Electrical Work. The M&E works covered the manufacture, supply, and installation of turbines, generators, and transformers, as well as associated powerhouse and switchyard equipment and gate equipment and cables and accessories. Transmission facilities, to connect the powerhouse to WAPDA's 500 kV grid (involving two 500 kV transmission lines of 100 km between Barotha and Rewat [lot 1], financed by IDB, and about 3

150 km of lines that loop in and out of the existing 500 kV lines between Tarbela and Gatti [lot 2], financed by ADB) were also included.

12. The 500 kV Barotha-Rewat transmission lines (lot 1), the supply of towers, conductor, insulators and hardware, and accessories had been substantially completed and were expected to be in full operation by 31 March 2005. The 500 kV Tarbela-Gatti transmission lines (lot 2) were completed in February 2003 and commissioned and fully operational on 6 June 2003.

13. The Project’s components did not change, except for the transmission facilities required for the reliable evacuation of power. Load flow studies carried out by WAPDA identified the need for additional lines and/or substations. These were for (i) a 500 kV transmission link between Rewat and Lahore, along with extensions of the (existing) Rewat and Lahore substations; (ii) a new 500 kV substation at Gakhar; and (iii) a 220 kV transmission line linking the powerhouse at Barotha to Nowshehra.5

14. As envisaged at appraisal, all the components have now been installed and commissioned, and all five generating units are in commercial operation. The first mechanical run of Unit No. 1 was on 13 May 2003, and trial generation started on 16 June 2003. Official inauguration of Unit No. 1 and Unit No. 2 took place on 19 August 2003. These two units commenced commercial operation on 28 August 2003 and 18 September 2003, respectively. For Unit No. 3, the testing started in September 2003 and was completed in October 2003. The unit was put into commercial operation on 20 November 2003. Unit No. 4 had its first run on 3 December 2003. Reliability runs continued for this unit from mid-December 2003 to January 2004, and the unit started commercial operation on 18 January 2004. The commissioning tests and reliability runs for Unit No. 5, the final unit, were started in April 2004, and the unit was formally commissioned and began commercial operation on 14 May 2004.

15. The Project Completion Review (PCR) Mission made visits to the Project site and examined each of the major civil works components and the ancillary works that had been undertaken. At all of the locations visited, all equipment installation had been done in a satisfactory manner and all facilities were being well maintained. However, at the power complex, several small items such as some of the internal access roads and general cleaning of the power complex had still not been completed, and work was ongoing.6 The PCR Mission was nevertheless pleased to note that all components of the Project, as conceived at appraisal, had been successfully implemented, meeting the intended objectives.

C. Project Costs

16. At Appraisal, the project cost was estimated to be $2.20 billion, of which $1.39 billion (63%) was estimated to be the foreign exchange cost, and the total local currency cost was $0.81 billion (37%). ADB’s loan at appraisal was $300 million, comprising $280 million (93%) in foreign exchange cost and $20 million (7%) in local currency cost, to be financed from the ordinary capital resources. Total cofinancing sources amounted to $947 million, of which $884 million was estimated to be the foreign exchange cost and $63 million was estimated to be the local currency cost. The remaining foreign exchange cost of $230 million and local currency cost of $723 million were to be met by WAPDA.

5 These transmission line extensions are being financed and constructed by WAPDA, under a separate project (i.e., Transmission Arrangements for Dispersal of Ghazi Barotha Power). 6 All of the outstanding work required is being financed by WAPDA.

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17. The Project’s actual completion cost, estimated by the PCR Mission, was $1.93 billion, with a foreign exchange cost of $1.21 billion (63%) and a local currency cost of $0.72 billion (37%). ADB financed $254.5 million, of which $235.9 million (93%) was foreign exchange cost and $18.6 million (7%) was local currency cost. Cofinancing accounted for $803.4 million, of which $764.8 million (95%) was foreign exchange cost and $38.6 million (5%) was local currency cost. The Project’s actual completion cost was $273.4 million less than that envisaged at appraisal, which represented an overall 12% reduction in the cost estimated at appraisal. Actual local costs were approximately 11% lower and foreign costs were approximately 13% lower than at appraisal. The Project benefited from lower-than-expected bid prices, in particular for the power complex and M&E equipment packages.

18. Although local costs decreased in dollar terms, land prices increased significantly. At appraisal the total cost of land acquisition was estimated at $37 million. Actual costs amounted to approximately $115 million, a 300% increase from appraisal estimates. In terms of foreign costs, two of the civil works contracts (C-01 and C-02) cost more than envisaged at appraisal, because contractors filed numerous variation orders and claims, due to implementation delays.7 The actual cost of contract C-03, however, was approximately 27% below that estimated at appraisal. The M&E contract’s actual costs were also below appraisal estimates, by approximately 58%, due to lower bid prices.

19. The detailed costs for each project component compared to appraisal estimates are shown in Appendix 3. A summary of these costs is also shown in the basic data. For cost comparison, the local currency costs incurred by WAPDA were converted into dollars at the rate prevailing during each transaction. The average rates of exchange used are given in Appendix 4. A summary of contracts financed by ADB is given in Appendix 5.

D. Disbursements

20. A comparison of projected and actual disbursements under the loan is provided in Appendix 6. Loan proceeds were disbursed in accordance with ADB’s Loan Disbursement Handbook. Disbursement of the loan proceeds was slower than expected, because of delays in project implementation.

21. Due to counterpart funding problems, the Government requested that ADB’s disbursement be temporarily increased from 77.4% to 90.0% of the total cost for contract C-01. ADB approved this on 9 June 1997 for all expenditures incurred from that date to 30 June 1998. This change in disbursements was subject to the condition that cumulative loan withdrawals against local currency costs would not exceed the limit of $20 million. The availability of counterpart funds was caused by delays in tariff increases and budgetary constraints of the federal Government. On 15 June 1998, the Government requested that ADB maintain the increased disbursement proportion of 90.0% until 30 June 1999. The request was approved by ADB. In July 1999 the disbursement proportion reverted back to 77.4%, as specified in the Loan Agreement.

E. Project Schedule

22. The actual and appraisal implementation schedules of major project activities are compared in Appendix 7. At appraisal, the Project was envisaged to be implemented within 6

7 An estimate of the outstanding claims still to be made is included in the cost estimate in the basic data (and in Appendix 3), under physical contingencies of $170 million. 5 years, with construction commencing in early 1996 and project commissioning taking place in mid-2001. ADB’s Board approved the loan on 16 January 1996. The date of the Loan Agreement and the Project Agreement was 11 March 1996. The loan became effective on 20 June 1996 and was extended once from the original closing date of 30 June 2002 to 31 December 2003, due to implementation delays.

23. Project implementation was delayed by 3 years, due to (i) late handover of land for the power channel and the power complex, which caused resettlement delays;8 (ii) various contract delays for the main components, mainly due to WAPDA’s financial shortfall in counterpart funding; (iii) some difficulties arising from labor unions and various contractors not having been paid for several months; and (iv) necessary repatriation of foreign consultants from the site, owing to the events of 11 September 2001 in the United States.

24. The start of works on the barrage and power tunnel contracts was delayed to September 1996, due to delays taking place in the release of the contractor’s equipment from customs and in the acquisition of land, the latter being due to disputed land valuation prices and the lack of counterpart funds.

25. The permeability of the riverbed material was found to be much higher than expected, and this led to delays in the construction of the undersluices and standard bays. As a result, the barrage and auxiliary works had only reached a physical progress of 53%, against the planned 77%, by September 1999. The original duration of the contract was 51 months, with a completion date of 10 March 2000. A request for an extension of time (EOT) was made by the contractor on several occasions. The contractor cited several reasons for the delay, including (i) liquidity problems; (ii) delays by WAPDA in handing over employer furnished equipment; (iii) ground conditions that were unforeseen resulting in dewatering problems; and (iv) delays in the availability of design drawings for gates and other M&E equipment.

26. Due to the events of 11 September 2001, the civil works contractor undertaking contracts C-01 and C-02 stopped work on the site on 25 September 2001. A supplementary agreement9 with the contractor was made on 14 April 2002, extending the completion date to 31 July 2003, which enabled resumption of the work on both contracts. As a result of the demobilization of the contractor, the construction work was delayed by about 12 months.10 Due to this, the Borrower, through the Ministry of Finance, requested on 28 May 2002 that ADB extend the loan closing date by 17 months, from 30 June 2002 to 31 December 2003. ADB approved the extension on 12 August 2002.

27. The original duration of contract C-02 was 51 months, with completion expected by 10 March 2000. The contractor submitted an EOT request of 21 months, due to the late turnover of land by WAPDA, with a cut-off date of 30 November 1997 for the turnover of land to the contractor. Several further EOT requests were made, and the completion date was extended to 24 May 2001. As with contract C-01, the events of 11 September 2001 halted work. Supplementary Agreement No.1-2002 extended the completion date of the contract to 31 July 2003.

8 At appraisal, land acquisition was expected to be completed by the end of 1995; however, this was not accomplished until almost 4 years later. 9 Supplemetary Agreement No. 1-2002 provided an advance to the contractors of $18 million and PRs120 million and an on account payment of $22 million and PRs180 million. 10 While the calendar duration of this stoppage was about 8 months, the stoppage in fact led to a 1 year delay, since the next few months after the contractors returned to site were the high flow season of the Indus River, which made working at full speed impossible until October 2002, when the high water flows had passed.

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28. Contract C-03 had an original duration of 64 months, with an expected completion date of 16 June 2002. The first EOT request was made on 8 February 1999, due to the late turnover of land. Other requests for EOT culminated in Supplementary Agreement No.2-2002 on 9 February 2001, extending the completion date to 15 July 2003.

F. Implementation Arrangements

29. Apart from the delays in project implementation, the implementing arrangements were as envisaged at appraisal, with WAPDA as the EA. As required under the Loan Agreement, WAPDA, with the Water Wing bearing the responsibility for implementing the Project, established a Ghazi Barotha project office for the Project’s day-to-day implementation. WAPDA also reestablished the panel of experts, to review all technical and safety aspects of the Project.11 Overall project coordination was carried out by a WADA team based in the WAPDA colony at Hattian, located near the center of the project area, and no formal mechanism existed for coordination among financers. The environmental aspects of project implementation were monitored by WAPDA’s Environmental Cell. An independent environmental and resettlement review panel also monitored the Project’s environmental aspects. A project coordination chart is shown in Appendix 8.

G. Conditions and Covenants

30. Compliance with the covenants under the loan is presented in Appendix 9, and WAPDA’s financial statements are provided in Appendix 10. The deterioration in WAPDA's finances, particularly from FY1997 onward, impacted adversely on the Project. Up to FY1996, WAPDA's financial performance was largely satisfactory, and WAPDA complied with the financial covenants under previous ADB projects. Specifically, WAPDA financed 40% of its average investment program from its own resources. However, by mid-FY1997, WAPDA faced a large increase in operating costs,12 while its revenues, particularly power tariffs, did not increase in line with power purchases. To cover the increased costs, power tariffs needed to rise steeply (by more than 30%) in FY1998. Although the impact of the independent power producers program on WAPDA's finances was assessed at appraisal, the (political) risks entailed in implementing the required tariff increases were not fully recognized. The present tariff levels are shown in Appendix 11.13

31. Covenant compliance was not satisfactory, particularly relating to transmission and distribution (T&D) losses,14 accounts receivable,15 ratio of self-financing,16 and debt service coverage ratio.17 WAPDA has been the beneficiary of several ADB loans in the past and is aware of the importance of loan covenant compliance. WAPDA needs to monitor covenant compliance regularly and more rigorously. ADB suggested that (i) a coordinator be assigned for centralized monitoring of all covenants under ADB loans; (ii) reports be provided quarterly to

11 The panel of experts was originally appointed at the feasibility and design stage. 12 Due to power purchases from independent power producers, which were contracted by the Government under the 1994 Private Power Policy. 13 Tariffs have been regulated by the National Electric Power Regulatory Authority since FY1997. 14 The maximum covenanted system losses were to be 18% from 2001 onward (Loan Agreement, Schedule 6, para. 10). 15 The average of WAPDA’s overall accounts receivable was not to exceed at any time the equivalent of 3 months of energy sales (Loan Agreement, Schedule 6, para. 7). 16 The self-financing ratio was to not be less than 40% of the annual average of WAPDA’s capital expenditures incurred (Loan Agreement, Schedule 6, para. 4). 17 WAPDA’s net revenue was to be at least 1.5 times the debt service requirements on all debt (Loan Agreement, Schedule 6, para. 5). 7

ADB on key covenants, such as T&D losses and accounts receivable; and (iii) a time bound action plan be created to improve T&D losses and accounts receivable payment rates, as well as explain the low self-financing ratio and debt service coverage ratio.

32. Audited and unaudited accounts were continually submitted late, on average 4–5 months behind the required date. Quarterly progress reports on project execution were submitted on time. ADB requested on several occasions that WAPDA submit its project completion report by July 2004. WAPDA did not, however, submit this report until the PCR Mission was in Pakistan in January 2005.

H. Related Technical Assistance

33. ADB included a TA grant in the Project. ADB commenced with the engagement of consulting services and made a final selection in October 1997, in anticipation of the signing of the TA agreement. ADB informed the Ministry of Water and Power and the Economic Affairs Department of this on 15 October 1997 and requested advice regarding the TA. As the TA agreement was not signed, the TA lapsed automatically.18 ADB informed the Economic Affairs Department on 27 August 1998 that it intended to cancel the TA and requested a reply. No reply was received, and the TA was cancelled on 24 June 1999.

I. Consultant Recruitment and Procurement

1. Consultant Recruitment

34. The consultants who formulated and designed the Project were retained by WAPDA, using their own funds, to assist in project implementation and supervise the construction of the main civil works; supervise the manufacture, supply, installation, and commissioning of M&E equipment; and coordinate and manage various contracts. The consultants were a joint venture of two local and three international consulting engineer firms. The contract between the consultants and WAPDA was signed on 14 August 1996, for a period of 84 person-months. Due to delays in project implementation, the contract was extended through three amendments: Amendment 1, on 10 July 2001, to extend the contract to 111 person-months; Amendment 2, on 15 April 2003, to extend the contract to 123 person-months; and Amendment 3, on 31 December 2005, to extend the contract an additional 16–17 person-months.

2. Procurement

35. Procurement financed by ADB was undertaken in accordance with ADB’s Guidelines for Procurement. Procurement of other packages was in accordance with the procurement guidelines of each particular funding agency. To facilitate the Project’s timely implementation, ADB approved on 9 March 1995 (i) advance procurement action for the C-01 contract and barrage-associated equipment and (ii) retroactive financing of up to 10% of ADB’s loan amount for procurement expenditures under ADB’s loan. ADB approved retroactive financing for the costs incurred after 20 July 1995.19 The planned and actual procurement schedule is shown in Appendix 12.

18 The validity of the TA expired after a 12-month period. The TA was apparently cancelled because a similar study was to be carried out under a separate funding arrangement. 19 The last date of appraisal.

8

36. As envisaged at appraisal, procurement was subdivided into two categories: (i) packages to be financed solely by WAPDA and to be procured on the basis of local competitive bidding and (ii) packages to be financed from foreign loans and to be procured on the basis of international competitive bidding (ICB). Local competitive bidding packages comprised preparatory works, while ICB packages covered the main civil works and M&E equipment. The Project’s civil works components, for the purpose of procurement and execution, were divided into three ICB packages: (i) contract C-01 (barrage and ancillary works), (ii) contract C-02 (power channel and ancillary works), and (iii) contract C-03 (power complex and ancillary works). Contract C-01 was financed by ADB, contract C-02 by the World Bank, and Contract C- 03 by JBIC and the World Bank.

37. The prequalification and tender documents for the civil works contracts were prepared by consultants after the completion of the feasibility study in 1992. In response to prequalification, 81 companies from 20 countries submitted applications. Of these, 33 firms sought prequalification for contract C-01 (barrage and ancillary works). Based on the evaluation report of 30 June 1994, prequalification of 12 firms was approved by WAPDA and/or the World Bank for contract C-01. Of these, five firms were also approved for prequalification for tendering for the combination of contracts C-01 and C-02 (power channel). Tender documents were issued to the prequalified firms in August 1994, and the tender opening date was set for 14 December 1994. This opening date was postponed at a development partners meeting on 21 November 1994 in Paris, to facilitate review of the procurement and other relevant documents by development partners in light of their respective guidelines. Contracts C-01 and C-02 were awarded to the same contractor on 10 December 1995. As Contract C-03 (power complex) was partly financed by JBIC, JBIC guidelines required the procurement documents to be cleared by JBIC before they were issued. This was, however, not undertaken, and JBIC could not provide funding, until the contract was rebid. The rebid, followed by JBIC’s approval, meant that the award of this contract was almost 12 months after the award of the other two civil works contracts, and there was a serious risk that the powerhouse would not have been completed until well after the other project facilities had been completed. However, due to delays that were experienced in contracts C-01 and C-02, this did not occur. The contract for C-03 was awarded on 18 December 1996.

38. A total of 16 M&E contract packages (ME-01–ME-16) were created. Package ME-04 (cranes), ME-09 (gate equipment), and ME-15 (transmission lines) were financed by ADB.20 The other M&E packages were financed by European Investment Bank, IDB, JBIC, Kreditanstalt für Wiederaufbau, and the World Bank. The procurement process for the M&E equipment followed the award of contract C-03 (power complex).

39. For the evacuation of power from Barotha hydropower station, taking into account the availability of WAPDA funds, a scenario was selected that, although not the best option, reflected the design approved by the financers, which consisted of (i) an in-out arrangement of the existing 500 kV Tarbela-Gatti lines 1 and 2 at Barotha, financed by ADB; (ii) two 500 kV single circuit transmission lines from Barotha-Rewat, financed by IDB; (iii) a 500 kV Rewat substation for two Barotha-Rewat 500 kV lines, financed by IDB; and (iv) several Rewat-Lahore transmission lines and the extension of existing Rewat and Lahore substations, financed by the Kuwait Fund.21 WAPDA subsequently realized that commissioning all units in the Barotha hydropower station under the selected configuration would not sustain a reliable power supply.

20 Package ME-15 (transmission lines) was financed in association with IDB. 21 The Rewat-Lahore transmission lines and the extension of the substations were not in the original project scope, and WAPDA was using alternative sources of finance (i.e., the Kuwait Fund) to undertake this work. 9

WAPDA therefore decided to build 220 kV twin bundle lines from Barotha to Peshawar, through Shahibagh, together with an extension of Barotha switchyard, and sought financing from development partners for these components.22 WAPDA also requested ADB to reallocate loan proceeds to meet the foreign exchange cost for the expansion of the 500/200 kV switchyard at Barotha, to enable evacuation of power to these transmission lines. ADB reallocated $10 million on 11 February 2002 to undertake this. Although the work financed by JBIC had contracts awarded in June and July 2002, ADB procurement was substantially delayed due to the slow progress in preparing and finalizing the bidding documents. The bidding documents were approved by ADB only in September 2003. However, as the loan account was closed in January 2004, and the work had not started, ADB did not finance the component. WAPDA, through its own financing arrangements, is now undertaking this work.

J. Performance of Consultants, Contractors, and Suppliers

1. Consultants

40. The EA reported that the performance of the consultants was satisfactory and that the consultants performed their tasks professionally and in accordance with the terms of reference.

2. Contractors

41. In executing the different civil works contracts, the performance of the various contractors was satisfactory. However, several disputes occurred regarding contractors’ claims, and these are still being resolved according to the contract procedure. After the 11 September 2001 incident in the United States, the contractors working on the barrage (C-01) and power channel (C-02) stopped work. As a result of WAPDA’s efforts, culminating in the signing of Supplementary Agreement No.1-2002 between WAPDA and the contractors on 14 April 2002 and the extension of the completion date to 31 July 2003 for these civil works, the contractors restarted work in April 2002.

K. Performance of the Borrower and the Executing Agency

1. The Borrower

42. The performance of the Borrower overall was rated satisfactory. During project preparation, the Borrower made every effort to expedite the project preparation process, as this was a high priority project for the Government. The feasibility and design study had a major emphasis on minimizing the Project’s adverse environmental and social impacts, even when this involved higher costs. The Borrower’s processing and approval of the feasibility study was relatively fast, and the Project was ready for development partner appraisal within 36 months. The Borrower’s performance during the preparation phase was rated highly satisfactory. However, during the Project’s implementation phase, the Borrower’s performance was not so good. The Borrower could have taken steps to insulate the EA from the increases in generation costs when the EA’s financial position deteriorated following the induction of independent power producers under the 1994 policy. However, the Borrower did not allow the EA to increase its tariffs and it did not provide other resources to the EA to enable it to cover costs. During the Project’s implementation phase, the Borrower’s performance was rated as unsatisfactory. Taking into account the Borrower’s performance during the Project’s preparation and the

22 A loan was obtained from JBIC for construction of the 220 kV transmission lines and a conventional substation.

10

Borrower’s performance during project implementation, an overall rating of partly satisfactory has been given.

2. Water and Power Development Authority

43. The performance of the EA is rated partly satisfactory. Although the EA achieved project objectives, delays in project implementation, caused by (i) the availability of counterpart funds and (ii) delays in land acquisition and compensation, affected the Project’s efficiency and effectiveness. The EA was also not able to consistently meet its financial covenants of (i) keeping overall accounts receivable from exceeding the equivalent of 3 months of energy sales, (ii) maintaining a 40% self-financing ratio, and (iii) maintaining a debt service coverage ratio of at least 1.5 times the estimated debt service requirements. This affects the sustainability of the Project and has resulted in the EA’s performance being rated partly satisfactory.

L. Performance of the Asian Development Bank

44. The Borrower and the EA appreciated the assistance and cooperation extended to them by ADB and considered the performance of ADB to be fully satisfactory. Project formulation was relatively quick, taking 6 months from fact-finding to Board approval in January 1996. ADB undertook 1 inception mission and 10 review missions,23 monitored progress closely, and provided valuable assistance in resolving conflicts with some contractors. These missions included visits to the Project’s site and the EA’s headquarters in Lahore, where coordination meetings were held to discuss and solve problems. The number of review missions, however, could have been greater, due to the fact that the implementation period spanned approximately 9 years. Also, ADB had only one review mission involving a resettlement specialist considering the problems related to resettlement throughout the Project. ADB had a total of seven project officers during the loan handling project implementation. ADB also reorganized its organization during project implementation, which did not contribute to a smooth handover of the Project from one officer to another. The role performed by ADB’s missions in providing advice regarding technical issues and preparation and evaluation of bid documents, as well as matters of loan administration, was recognized by the EA. The EA indicated to the PCR Mission that some disbursement applications sent to ADB were delayed. As a result, the EA had to pay additional interest on delayed payments to contractors. Overall, ADB’s performance was rated partly satisfactory.

III. EVALUATION OF PERFORMANCE

A. Relevance

45. The Project’s rationale—to ease the acute power supply shortage situation in the country and reduce load shedding through the provision of an urgently needed power generating plant— was sound. The Project was in line with ADB’s operational strategy at the time of appraisal. It supported the Government’s least-cost development program to expand electricity generation,24 enhance the reliability of the power supply, and alleviate the acute power shortage. The Project is rated highly relevant.

23 The World Bank, however, undertook a total of 16 supervision missions. 24 The Project provided a total incremental generation capacity of 1,450 MW, which accounts for 22% of total WAPDA generation capacity as of FY2003. 11

B. Efficacy in Achievement of Purpose

46. Except for delays, project implementation followed the arrangements envisaged at appraisal. The Project is considered successful in achieving its objective of meeting the demand for electric power in Pakistan at the least cost and in an environmentally sustainable and socially acceptable manner. Although the Project faced significant delays in implementation, which resulted in a postponement of project benefits, and WAPDA’s weak financial sustainability, the additional electric power provided by the Project is substantial. The Project was rated as efficacious.

C. Efficiency in Achievement of Outputs and Purpose

47. The Project was considered efficient in achieving its outputs and purpose, despite delays in implementation. In estimating the financial internal rate of return (FIRR) and economic internal rate of return (EIRR) for this project completion report, the Project was evaluated using a similar methodology to that used at appraisal. The FIRR was estimated at 14.2%, which is above the weighted average cost of capital of 6.5%. The FIRR at appraisal was estimated at 13.0%. The recalculated EIRR was 31.4%, compared to 17.9% at appraisal. The EIRR is greater than the opportunity cost of capital of 12.0% and thus enables the Project to be rated efficient. Appendix 13 provides details on the methodology that was used, assumptions, and workings underlying the FIRR and EIRR estimates and discusses the differences in the results from those at appraisal.

D. Preliminary Assessment of Sustainability

48. WAPDA’s financial position remains problematic. For the Project to be maintained properly, WAPDA must improve its financial position, which will ensure that resources are available for proper and adequate maintenance. The Project is well constructed and should last as long as its economic life, if regular maintenance is carried out. WAPDA’s debt service coverage ratio25 and system losses26 continue to be problems. These need to be urgently overcome. Certain improvements, however, have been made (e.g., accounts receivable have reached the target of 3 months of energy sales for 3 consecutive fiscal years). However, WAPDA, still needs to make further improvements. At this stage, the Project has been given a rating of less likely for sustainability.

E. Environmental, Sociocultural, and Other Impacts

49. The Project was specially designed to minimize environmental and social impacts. Throughout the Project’s studies, emphasis was placed on the early identification of environmental and resettlement impacts. The adopted alignment of the power channel caused minimal resettlement, as it avoided all villages by shifting the power channel to higher ground away from the river. The Project also resettled project affected persons in the project area near their homes on new spoil bank land provided by the Project along the power channel. Frequent interaction with local people during the project planning stage kept the project team attuned to

25 The debt service coverage ratio has only been greater than the covenanted 1.5 in 1 year during project implementation (i.e., 1999). 26 Total system losses rose from 24.13% in 1997 to 27.87% in 2003. Out of total system losses, transmission losses have been declining, but distribution losses have been rising.

12 public concerns. The PCR Mission visited the project area and observed no adverse environmental impacts of significance.27

50. Environmental mitigation measures included (i) releasing a minimum of 28 cubic meters per second of water from the barrage at all times, so as to not have any impact on downstream ecosystems and riverine conditions; (ii) implementing downstream of the barrage a program of regular water quality monitoring, as well as monitoring of local flora and fauna; (iii) providing an underdrainage system under the channel, to minimize seepage losses and adverse impacts on local groundwater levels; and (iv) implementing safety measures for the power channel, including chain-link fences near populated areas; cattle grids, to prevent livestock from wandering onto the service roads and/or accidentally falling into the channel; hand rails, floating booms, and grab rails along points of public access; and public education programs, to inform residents of potential safety risks, etc. In addition, the Project included the construction of 46 bridges and crossings over the channel.

51. The Government and WAPDA were committed to improve or restore the current standard of living and earning capacity of all affected people. This was reflected in entitlement packages that clearly identified the type of land (or asset) loss and defined entitled people, rights, and entitlements to compensate for various categories of loss, etc. Compensation for land and other assets was at current market prices, including compensation for improvements made by the owners. The relocation of houses was coordinated with the allocation of agricultural lands, to minimize out-of-area resettlement. Efforts were made to compensate affected people through redeveloped land in the same area, as far as possible. This involved placing about 30 million cubic meters of spoil from the channel excavation in spoil banks28 along the channel, which were graded, covered with top-soil, provided with tube well irrigation, and offered for resale to affected people at prices consistent with the rates at which the land was originally acquired.

52. An integrated regional development program, Ghazi-Barotha Taraqiati Idara (GBTI), promoted participatory development of the affected communities for land compensation, rehabilitation, and resettlement works. GBTI was paid PRs99.38 million from the agreed integrated regional development program funds of PRs176 million to prepare a development program for the affected communities. GBTI began 150 productive physical infrastructure schemes with the participation of community organizations benefiting more than 40,000 households.

53. The Project fell under two sets of official environmental and resettlement regulations, (i) those established by the Government of Pakistan and the Government of Punjab and (ii) those of the international development partners. ADB has its own environmental and resettlement requirements, which are similar in approach to those of the World Bank. However, the development partners agreed that the environmental and resettlement procedures of the World Bank were to be used for all project components, to allow for a uniform approach. The World Bank financed the Resettlement Action Plan (RAP),29 and ADB funds were not used for this

27 The main effect of the barrage was a partial redirection of the flow of the Indus River, and the groundwater inflow- outflow relationships were slightly altered. The reduction of flow, however, has not affected local livestock, as substantial pools remain. The main effect of the power complex on water resources was the disruption of a small irrigation system near Barotha. Minimal effect was noticed on the flora and fauna of the riverine area. Although transmission lines passed through three forest reserves, the impact was minor due to the degradation already caused by the rural population. 28 A total of 159 spoil banks have been constructed along the both sides of the power channel. 29 September 1994. 13 purpose. The RAP set out (i) resettlement policy for the Project; (ii) resettlement-related baseline data collected for the Project; (iii) entitlements established for the Project (i.e., compensation); (iv) milestone dates related to when resettlement actions were to have taken place; (v) emphasis on monitoring, to ensure the plan’s provisions were effectively implemented; and (vi) assessment of the costs of resettlement-related activities.

54. The Project’s physical implementation started with the land acquisition process. For all three civil works components about 4,309 hectares of privately owned land were acquired.30 The total compensation for this land amounted to about PRs4.6 billion. The land acquired, along with other data on resettlement for each of the Project’s components, is shown in Appendix 14. About 261 built-up properties were affected in the construction of the civil works components. For all the affected households, three resettlement villages (one near Ghazi town, one near Feroze Banda village, and one near Barotha village) were constructed by WAPDA. The locations of these resettlement villages are also in proximity to the sites of the affected houses. In these villages, all the basic amenities (i.e., water supply, sewerage system, roads, electric supply, schools [primary] for girls and boys, and dispensary and mosque) have been provided by WAPDA. The main objective for providing all these facilities was that the standard of living of the affected families should be better than the preproject scenario. While project implementation disrupted the local community, the construction works also employed about 13,500 local people and many local companies. Over the course of the construction, this influx of capital into the local economy has had a significant effect on improving business opportunities and economic growth, particularly in the project area.

55. In accordance with the RAP, the land cost was to be assessed by a land valuation committee (LVC) comprising one representative each from WAPDA and a nongovernment organization and two representatives from the village concerned, with the local assistant commissioner as chair. To give importance to the recommendations and/or assessments of the LVC, the Punjab 1983 Land Acquisition Rules were relaxed to give power to the land acquisition collector, for assessing the cost of land with due consideration to the recommendations of the LVC. Due to pressure from local politicians and those affected, the LVCs were recommending high prices for land, almost 3–4 times the fair prices previously estimated.31 The National Accountability Bureau investigated to determine if corruption was taking place. This was not the case, but the National Accountability Bureau based its land prices on historical prices, to determine a fair market value of the land. This was against the legal agreements in the RAP. The ADB-financed components of the Project did not involve any resettlement.32 The World Bank-financed power channel, however, involved 35,974 affected people and led to a number of representations by affected people as well as certain nongovernment organizations. On 17 December 2002, the World Bank alerted the Government and made it clear that the RAP had to be implemented by the Government. The World Bank considered suspending loan disbursements. Following discussions with the Government and WAPDA, a time bound action plan for resolving the issues involved was agreed upon, and the threat to invoke remedies under various loan agreements was withdrawn.

30 An additional 952 hectares of government land was also acquired. 31 At feasibility, the original land cost was estimated at PRs1.8 billion, which increased to over PRs5 billion, due to price hikes and manipulation by land owners. 32 The environmental and social aspects of the Project had been looked after by the World Bank, with ADB playing a minor role in their supervision. In informal discussions with the World Bank, the World Bank intimated that ADB should be providing more support. ADB’s mission in May 2000 agreed with this. However, only one ADB mission, in February 2001, included a resettlement specialist. No missions had environmental specialists, apart from the Fact-Finding Mission.

14

56. The PCR Mission was advised during its visit to the resettlement villages that interviewing project affected persons and the beneficiaries of the Project would be difficult, due to the security situation. The PCR Mission therefore only visited these areas to observe the facilities that were in place (i.e., schools and medical facilities and others). The PCR Mission was pleased to note that these facilities had been implemented.

57. A panel of experts on environmental and social issues was appointed for the feasibility and design stage. The Project was the first example of a World Bank-financed hydropower project where an environmental and social panel of experts was appointed from the feasibility study stage to project completion.

IV. OVERALL ASSESSMENT AND RECOMMENDATIONS

A. Overall Assessment

58. The Project is considered successful, based on a review of its relevance, efficacy, efficiency, and sustainability, and impact on institutional development. Appendix 15 includes the quantitative assessment of project performance according to ADB's criteria for determining project rating.

B. Lessons Learned

59. The Project was successful in many aspects, except for significant delays with various causes. An important lesson from the Project concerns that of the availability of counterpart funding. At appraisal, WAPDA was to finance approximately 43% of the total project cost. However, due to the declining performance of WAPDA and the impossibility of increasing tariffs, the level of funds available declined. The foreign development partners increased their disbursements in June 1997, to assist in covering WAPDA’s shortage of funds. This continued until June 1999. Due to WAPDA’s not being able to generate its share of the finances, project implementation suffered. In the future, the availability of counterpart funds needs to be guaranteed more fully, and ADB assistance to the power sector in the country should take this into account.

60. A key lesson of the Project relates to environmental and social impacts. The environmental aspects are mainly positive, in that they obviate the need for a comparably sized (thermal) generation plant and thereby reduce the damaging atmospheric impacts of such plants. However, as demonstrated in the Project, reducing the potential social impacts to manageable levels is also possible, through rigorous evaluation of alternatives and public consultation and awareness building. In this context, the selection of the final power channel alignment (and the conscious decision to avoid existing villages and settlements, even at somewhat higher costs) and locations of the barrage and powerhouse deserve to be highlighted. These decisions substantially reduced the scale of the resettlement and relocation under the Project without adversely affecting its economic and financial viability.

61. ADB should have been more involved with the environmental and resettlement aspects. Although the World Bank was responsible for the environmental and resettlement aspects of the Project, ADB could have taken a more active role, as was noted in discussions with a World Bank mission. ADB had a total of seven different project officers throughout the Project’s duration, and this was detrimental to overall project coordination. Furthermore, coordination among financers could have been more efficient, if a mechanism was established for regular meetings among financers. Coordination among financers was done informally. 15

C. Recommendations

1. Project-Related

a. Financial Control

62. WAPDA has not always submitted audited project accounts and corporate financial statements on time, as required by the loan covenants. The PCR Mission had difficulty determining how much WAPDA spent each year on each project component. Significant improvements in WAPDA’s financial record keeping must be made, and financial accounts need to be submitted promptly, in accordance with the covenants.

b. Future Monitoring

63. The generation and transmission distribution facilities that have been added under the Project are critical to reliable power supply in the country, and maintaining these facilities is essential. The PCR Mission recommended that the facilities should be operated and maintained properly, to keep them in good working condition and ensure the long-term success of the Project. ADB should keep in close contact with WAPDA through ongoing loans, to ensure that maintenance is being undertaken correctly.

c. Covenants

64. WAPDA has had difficulty complying with some of the financial loan covenants, such as maintaining a minimum 40% self-financing ratio and a minimum 1.5 times DSR. Both ratios have been improving, but ADB should continue to monitor and review WAPDA’s financial viability. The Borrower and WAPDA need to make further efforts to fulfill the major loan covenants, including those related to the financial and operational performance of WAPDA, such as system losses, so that WAPDA’s operations and commercial and financial performance can be elevated. This will eventually improve the country’s capability to tap domestic and international capital markets for additional financial resources, which can be used increase the power supply.

d. Further Action or Follow-Up

65. The Project does not require any specific future actions. The reliability and continuous performance of the Project will be closely monitored by WAPDA’s general. Because the Project is part of the Government’s least-cost development program of expansion of electricity generation, enhancement of reliability of power supply and improvement of power system control will be closely monitored during the implementation of any subsequent loans.

e. Timing of Project Performance Audit Report Preparation

66. A mission to prepare a project performance audit report, if required, could be fielded after 31 March 2005, by which time the 500 kV Barotha-Rewat transmission lines will be in full operation.

2. General

67. It should be ensured that adequate counterpart funding is available in future projects, to avoid project implementation delays.

16 Appendix 1

CHRONOLOGY OF MAIN EVENTS

Date Event

1994

21–22 November Development partner meeting in Paris, France.

1995

8–23 March Fact-finding mission fielded.

3–20 July Asian Development Bank (ADB) appraisal mission fielded. Other development partners participated in the appraisal of the Project.

31 July Summary environmental impact assessment prepared by the Government was circulated to the Board.

10–13 November Loan negotiations, ADB headquarters, Manila.

6 December Contract C-01 (civil works for barrage) was awarded.

1996

16 January ADB approved loan for $300 million.

11 March Loan Agreement signed.

14 May Subsidiary Loan Agreement between the Government and the Water and Power Development Authority (WAPDA) was signed.

20 June ADB loan became effective.

17–21 November Inception mission fielded.

1997

18 July ADB approved a change in disbursement proportion from 77.4% to 90.0%, comprising 68.4% for foreign exchange cost, up to $120 million, and 21.6% for local cost financing, up to $20 million, for all expenditures incurred until 30 June 1998 under contract C-01.

1998

8 June Amicable dispute settlement for contract C-01 signed between WAPDA and the contractor.

8 July ADB approved the extension period of disbursement proportion to 30 June 1999.

Appendix 1 17

Date Event

1999

23 April Development partners requested the Government and WAPDA to develop realistic financing options to assure the full and continuous availability of local counterpart funds to be submitted by 30 June 1999.

2000

19 April WAPDA reverted to original ADB disbursement percentage of 77.4% (WAPDA 22.6%) from July 1999.

2001

11 June WAPDA requested the reallocation of $10 million in the unallocated category of the loan, to evacuate power from Barotha power station.

2002

14 April Supplementary Agreement No. 1 was signed by WAPDA and the contractor completing contracts C-01 and C-02, extending the completion date to 31 July 2003.

12 August ADB approved the extension of the loan closing date to 31 December 2003.

2003

6 February In-and-out arrangement for Tarbela-Gatti 500 kilovolt line (lot 2) was commissioned.

17 February Impounding of the barrage commenced.

16 June Taking over certificate was issued for barrage impounding.

19 August Official inauguration of Units 1 and 2 of the Ghazi Barotha Hydropower Project.

12 December Government informs ADB of its intention to prepay the loan.

31 December Loan closing date.

19 January Request for prepayment by the Government.

20 January Undisbursed balance of nearly $45.5 million was cancelled. The loan account was closed. Source: Asian Development Bank.

18 Appendix 2

PRINCIPAL PROJECT DATA

A. Barrage

1. Main Data

• Normal Pond Level 340.00 m • Maximum (Survival) Pond Level 341.50 m • Design Flood Discharge Capacity 18,700.00 m3/s • Survival Flood Capacities: 3 − Gated Sections 23,000.00 m /s 3 − Fuse Plug 23,200.00 m /s 3 − Combined 46,200.00 m /s 3 − Construction Flood 14,500.00 m /s

2. Standard Bays

• Number of Gates 20 • Gate Size (Opening) 18.3 x 7.8 m (W x H) • Gate Type Radial • Sill Level 332.20 m

3. Undersluices

• Number of Gates 8 • Gate Size (Opening) 18.3 x 2.8 m (W x H) • Gate Type Radial • Sill Level 326.00 m • Gantry Crane 75/10 t

4. Head Regulator

• Number of Gates 8 • Gate Size (Opening) 18.3 x 7.0 m (W x H) • Gate Type Radial • Sill Level 333.00 m • Gantry Crane 75/10 t

B. Power Channel

Main Data

• Design Flow 1,600 m3/s • Longitudinal Slope 1:9,600 • Length 51,906 m • Full Supply Depth 9.00 m • Bed Width 58.4 m • Side Slope 1V:2H • Free Board 1.5 m • Total Excavation 76 million m3 Appendix 2 19

C. Power Complex

1. Main Data

• Annual Average Energy Output 6,600 GWh • Headponds and Forebay

− Area 540 hectares 3 − Live Volume 25.50 million m − Full Supply Level 334.00 m

2. Tail Regulator

• Number of Gates 4 • Gate Size (Opening) 18.3 x 9.0 m (W x H) • Gate Type Radial • Sill Level 324.75 m • Gantry Crane 75/10 t

3. Penstocks

• Number of Penstocks 5 • Intake Diameter 10.60 m • Length 222.00 m • Reducer From 10.60 m to 8.70 m

4. Power Intake

• Number of Intake Gates 10 • Gate Size (Opening) 5.37 x 10.75 m (W x H) • Gate Type Fixed Wheel • Sill Level 305.50 m • Number of Bulkhead Gates 4 Sets (2 Sections per Set) • Bulkhead Gate Size (Opening) 5.66 x 10.75 m (W x H) • Trashrack Panels 10 Sets (6 Sections per Set) • Trashrack Size (Opening) 10.96 x 19.21 m (W x H) • Elevation of Sill of Trashrack 305.50 m • Gantry Crane 60/10 t 5. North Sill

• Number of Stoplogs 10 Sets (5 Sections per Set) • Size of Stoplog (Opening) 10 x 14.5 m (W x H) • Type of Stoplogs Vertical-Lift Type • Sill Level 321.00 m

6. South Sill

• Number of Stoplogs 3 Sets (4 Sections per Set) • Size of Stoplog (Opening) 10.0 x 12.5 m (W x H) • Type of Stoplogs Vertical-Lift Type • Sill Level 323.00 m

20 Appendix 2

7. North Low Level Outlet

• Intake Trashrack 1 No. (3.0 x 3.5 m) • Removable Trashrack 1 No. (2.0 m x 3.5 m) • Flap Gate 1 No. (1.2 m dia) • Guard Valve 2 Nos. (1.2 m dia) • Howell-Bunger Valve 1 No. (0.9 m dia)

8 South Low Level Outlet

• Intake Trashrack 1 No. (3.0 x 3.5 m ) • Removable Trashrack 1 No. (2.0 m x 3.5 m) • Flap Gate 1 No. (1.2 m dia) • Guard Valve 2 Nos. (0.6 m dia) • Howell-Bunger Valve 1 No. (0.6 m dia)

9. Siphon Spillway

• Type Siphon • Discharge Capacity 1,600 m3/s • Operational Requirement Fully Automatic • Crest Level 334.50 m • Upstream Stoplogs 1 Set (8 Sections per Set) • Size of Upstream Stoplogs (Opening) 13.5 x 16.5 m (W x H) • Upstream Stoplogs Sill Level 319.00 m • Downstream Stoplogs 1 Set (9 Sections per Set) • Size of Downstream Stoplogs (Opening) 13.5 x 3.4 m (W x H) • Downstream Stoplogs Sill Level 325.60 m • Intake Trashracks 32 Nos. • Size of Trashracks 3.0 x 1.0 m (W x H)

10. Powerhouse

10.1 Turbines and Governors • Number of Turbines 5 • Type of Turbines Francis • Rated Head 69.00 m • Rated Flow 465.348 m3/s • Runner Discharge Diameter 6.783 m • Speed 100 rpm • Elevation of Distributor 256.30 m

10.2 Generators • Number of Generators 5 • Capacity of Generators 290 MW • Synchronous Speed 100 rpm • Number of Poles 60 • Rated Frequency 50Hz Appendix 2 21

10.3 Cranes • Powerhouse Main Bridge Cranes 2 x 450/60 t • Powerhouse Auxiliary Bridge Cranes 2 x 70/10 t • Unloading Bay Crane 1 x 145/20 t • Workshop Crane 1 x 6/2 t • Draft Tube Gantry Crane 1 x 100/10 t • Mobile Crane 1 x 100 t • Truck Trailer 1 x 50 t 10.4 Draft Tube Gates

• Number of Draft Tube Gates 4 Sets (for 2 Units) • Gate Size (Opening) 9.5 x 9.05 m (W x H) • Gate Type Vertical-Lift Type • Sill Level 238.00 m • Sill Cleaning Device 1 No. Scraper and Water Jet Type

10.5 Powerhouse Transformer Deck Bulkhead Gate

• Number of Bulkhead Gates 1 • Gate Size (Opening) 6.0 x 6.0 m (W x H) • Gate Type Bulkhead, Vertical-Hinged Type • Sill Level 282.50 m

10.6 Generator Transformers

• Continuous Rated Output 3 x 107.5 megavolt-ampere • Winding Rated 1 Minute Power Frequency Withstand Voltage

− High-Voltage Line Terminal 630 kV − Low-Voltage Terminals 50 kV • Winding Rated Lightning Impulse Withstand Voltage

− High-Voltage Line Terminal 1,425 kV (peak) − Low-Voltage Terminals 125 kV (peak) • Winding Rated Switching Impulse Withstand Voltage of High-Voltage Terminal 1,180 kV (peak)

10.7 Unit Transformers

• Rated Power 4,000 kilovolt-ampere • Rated Voltage HV:LV 18:11 kV

10.8 Generator Isolated Phase Bus

• Rated Voltage 18 kV • Rated Current 12 KA • Short Circuit Current Rating 237 KA • Power Frequency Withstand Voltage 50 kV • Switching Impulse Withstand Voltage 125 kV (peak)

22 Appendix 2

10.9 Medium Voltage Switchgear

• Rated Voltage 12 kV • Rated Current 1,250 A • One Minute Power Frequency Withstand Voltage of Circuit Breakers 36 kV • Rated Lightning Impulse Withstand Voltage of Circuit Breakers 95 kV (peak) 10.10 Low-Voltage Switchgear

• Rated Operational Voltage 400/230 V • Rated Insulation Voltage 1,000/600 V • Busbar Ratings 4,000/3,000 and 1,000/630 A

11. Switchyard

• Number of 500 KV Bays 6 • Scheme of Layout Breaker and Half Scheme • Bay Width 32 m • Rated Voltage 550 kV • Rated Lightning Impulse Withstand Voltage 1,550 kV (peak) • Rated Switching Impulse Volt to Earth 1,175 kV (peak) • Rated P Frequency Withstand Volt to Earth 620 kV • Busbars Rated Current 3,150 A • Bay and/or Circuit Connection Rated Current 2000 A

11.1 500 KV Circuit Breakers

• Rated Voltage 550 kV • Rated Current 4,000 A • Rated Short Circuit Breaking Current 50 KA • Rated Short Circuit Making Current 125 KA • Rated Duration of Short Circuit 3 Second

11.2 Generator Circuit Breakers

• Rated Voltage 24 kV • Rated Current 12 KA • Rated Breaking Current 100 KA • Rated Making Current 300 KA

11.3 500 KV Disconnectors

• Rated Voltage 550 kV • Rated Current 3,150 A • Rated Short Time Withstand Current 40 KA Appendix 2 23

• Rated Peak Withstand Current 100 KA

11.4 500 KV Current Transformers

• Rated Voltage 550 kV • Rated Primary Current 3,000 A • Rated Secondary Current 1 A • Transformation Ratio 3,000, 2,500, 2,000, 1,500, 1,250, 1,000, and 750/1 • Number of Secondary Cores 5 • Rated Burden of Each Secondary Winding at the Lowest Tap 30 VA 11.5 500 KV Capacitive Voltage Transformers

• Highest Voltage 550 kV • Rated Voltage Factor 1.2 • Transformation Ratio 500/√3 110√3 • Number of Secondary Windings 2 • Rated Output of Each Secondary Winding 200 VA

11.6 500 KV Line Traps

• Rated Voltage 500 kV • Rated Current 3,150 A • Rated Short Circuit Symmetrical Current 40 KA • Frequency Bandwidth 84–500 KHz at 600 Ohms and 65–500 KHz at 450 Ohms

24 Appendix 3

APPRAISAL AND ACTUAL COSTS ($ million )

Appraisal Actual Description Foreign Local Total Foreign Local Total Unit Unit Exchange Currency Cost Exchange Currency Cost A. Land

1. Land acquisition 0 37.0 37.0 0 114.9 114.9 2. Relocation and resettlement 0.2 51.6 51.8 0 29.9 29.9 Subtotal (A) 0.2 88.6 88.8 0 144.8 144.8 B. Preparatory Works 1. Colonies and access road 0 27.7 27.7 0 28.5 28.5 2. Grid station for construction 0.7 1.6 2.3 0 1.1 1.1 Subtotal (B) 0.7 29.3 30.0 0 29.6 29.6 C. Main Civil Works C1 Barrage and ancillary works 120.0 52.0 172.0 189.2 79.7 268.9 C2 Power channel and ancillary works 206.6 88.5 295.1 362.7 3.0 365.7 C3 Power complex and ancillary works 264.9 113.7 378.6 203.2 72.1 275.3 C3 Penstock 12.4 2.1 14.5 Subtotal (C) 591.5 254.2 845.7 767.4 157.0 924.3

D. Mechanical and Electrical Works d ME-01 Turbines and auxilliaries 78.5 12.8 91.3 37.0 3.1 40.1 ME-02 Generators and auxilliaries 96.0 15.6 111.6 36.1 1.3 37.3 ME-03 Transformers and reactors (inc SCADA revised) 23.9 4.9 28.8 25.8 2.0 27.8 ME-04 Cranes 8.0 1.2 9.2 8.6 - 8.6 ME-05 High voltage switchgear, control and protection 42.7 10.6 53.3 19.0 0.3 19.3 ME-06 Medium voltage and low voltage switchgear 2.1 2.6 4.7 0 0 0 ME-07 Elevators 0.6 0 0.6 0 0 0 ME-08 Diesel generating standby sets 0.6 0.6 1.2 0 0 0 ME-09 Gate equipment 28.6 10.1 38.7 14.0 0 14.0 ME-10 Generator isolated phase bus 2.2 0.3 2.5 0 0 0 ME-11 Switchyard steel structure and powerhouse masts 0.7 1.8 2.5 0 0 0 ME-12 Cables and accessories 2.3 0.2 2.5 0 0 0 ME-13 Miscellaneous power plant auxilliaries 6.6 1.2 7.8 0 0 0 ME-14 Control, instrumentation, supervisory control 14.3 0.8 15.1 7.2 0.2 7.4 and data acquisition, and telecommunication ME-15 Transmission 51.8 13.0 64.8 30.1 6.6 36.7 Subtotal (D) 358.9 75.7 434.6 177.8 13.4 191.2 E. Engineering, Administration 1. Project management consultancy 24.0 34.0 58.0 16.5 52.8 69.2 2. Other consultancy services 3.0 1.5 4.5 0 0 0 3. WAPDA's engineering and administration - 21.8 21.8 0 57.0 57.0 4. Studies, field investigations and others 0.9 1.5 2.4 0 3.9 3.9 Subtotal (E) 27.9 58.8 86.7 16.5 113.7 130.2 F. Duties 0 31.1 31.1 0 34.6 34.6

Base costa 979.2 537.7 1,516.9 961.7 493.0 1,454.7 Physical contingenciesb 116.1 53.5 169.6 150.0 20.0 170.0 Base cost + physical contingenciesc 1,095.3 591.2 1,686.5 1,111.7 513.0 1,624.7 Price contingencies 96.7 39.8 136.5 - - - Interest during construction (including financial charges) 202.0 175.0 377.0 95.9 206.0 301.9 Total Project Cost 1,394.0 806.0 2,200.0 1,207.6 719.0 1,926.6 SCADA = supervisory control and data acquisition, WAPDA = Water and Power Development Authority. a Base costs for C1 and C2 are based on the lowest evaluated/accepted bid prices. Base costs of all other contract packages and items are based on December 1994 prices. b Physical Contingencies (in percent): Land and preparatory works - 5; Civil works - 15 for C1, C2, and C3; Mechanical and electrical equipment - 5; Switchyard steel structure - 10; Cables and accessories - 10; Transmission - 15; and Engineering and administration - 5. c Price contingencies for Fiscal Year 1996 onwards have been estimated at an annual escalation rate of 2.2% for foreign currency costs and 7.5% for local currency costs. d In the revised estimate, ME-06 to ME-08 and ME-10 to ME-13 in the original appraisal were merged in ME-03 Transformers & Miscellaneous Equipment for financing by KfW, and ME-14 and ME-15 redesignated as ME-08 and ME-10. Sources: Asian Development Bank and WAPDA estimates. Appendix 4 25

CURRENCY EQUIVALENTS

Fiscal Year PRs to $1.00 (1 July–30 June)

1996 34.50 1997 40.30 1998 44.32 1999 48.06 2000 51.90 2001 58.41 2002 61.46 2003 58.46 2004 57.62 $ = US dollars, PRs = Pakistan rupees. Source: Asian Development Bank and Water and Power Development Authority estimates.

26 Appendix 5

SUMMARY OF CONTRACTS FUNDED

PCSS Currency of Category Contractor Supplier Description Contract Amount Equivalent ($) No. Contract 0001 01-Civil Works Impregilo JV S.P.A. Construction of Barrage PRs 2,423,097,216.41 53,659,808.73 Italy $ 83,667,696.28 83,667,696.27 € (Lit) 30,355,980,692.05 17,438,713.21 € (Fmk) 27,388,273.21 4,510,627.62 € (DM) 14,076,253.85 7,173,791.89 Total (Category 01) 166,450,637.72 0002 02-Gates Equipment China National Supply and Installation, PRs 443,607,930.38 14,002,265.09 Machinery and Supervision of Gate Equipment Equipment Total (Category 02) 14,002,265.09 0003 03-Cranes China National Supply of Gantry Cranes PRs 91,666,400.73 2,893,601.44 Construction and Agr, for Barrage and Power Import, Export Corp., Complex Beijing, People’s Republic of China 0004 03-Cranes Waagner Biro, Austria Supply and Installation of € (S) 37,864,299.51 3,051,392.12 185T for Unloading Bay and 550T for Powerhouse and Bridge Cranes € 23,165.38 26,216.80 PRs 3,550,044.93 68,122.18 0005 03-Cranes Heavy Mechanical Supply of 70T and 6T PRs 40,991,429.38 1,072,716.32 Complex Ltd., Pakistan Bridge Cranes and Misc. Hoisting Equipment 0016 03-Cranes Mitsui and Co., Japan Supply and Installation of PRs 36,669,558.05 689,468.70 Mobile Cranes 0017 03-Cranes Officine Macaniche Supply & Installation PRs 26,161,835.29 574,909.55 Galileo, Padova, Italy Supervision of Trashrack Cleaning Machine (1 unit) 0018 03-Cranes Volvo, Supply of 50-ton Truck Skr 1,502,795.00 210,328.20 Lahore, Pakistan Trailer Total (Category 03) 8,586,755.31 0006 04-Transmission Newage Cables (Pvt) Supply of ACSR Drake $ 3,111,001.07 3,111,001.07 Lines Ltd., Lahore, Pakistan Conductor PRs 43,178,782.00 810,055.99 0007 04-Transmission Newage Cables (Pvt) Supply of Galvanized $ 57,594.43 57,594.43 Lines Ltd., Lahore, Pakistan Overhead Shieldwire PRs 800,443.87 14,935.16 0008 04-Transmission Sefag Export AG Supply of Dampers $ 273,532.50 273,532.50 Lines 0009 04-Transmission Pakistan Engineering Supply of Galvanized Steel $ 3,159,613.17 3,159,613.17 Lines Co. Ltd., Lahore, Towers Pakistan PRs 63,959,163.56 1,064,096.65 Appendix 5 27

PCSS Currency of US Dollar Category Contractor Supplier Description Contract Amount No. Contract Equivalent 0010 04-Transmission Mitsui & Co. Ltd, Porcelain Insulators $ 1,680,480.00 1,680,480.00 Lines Japan 16,300 kg 0011 04-Transmission Mitsui & Co. Ltd, Porcelain Insulators $ 1,432,800.00 1,432,800.00 Lines Japan 11,300 kg 0012 04-Transmission Sicamex, France Accessories for € (Fmk) 1,003,244.57 141,852.46 Lines Conductors & Shieldwire 0013 04-Transmission Various Supply of Hardware $ 440,041.99 440,041.99 Lines 0014 04-Transmission ICC Pakistan, Construction, Testing, & PRs 177,913,608.71 3,054,423.16 Lines Lahore, Pakistan Commissioning of Trasmission Lines 0015 04-Transmission EMCO Industries Manufacturing, Testing, PRs 5,905,480.00 98,033.95 Lines Lahore, Pakistan Furnishing, Delivering ex Works $ 128,519.37 128,519.37 Total (Category 04) 15,466,979.90 Grand Total 204,506,638.02 € = euro, € (DM) = deutsche mark, € (S) = Austrian schilling, € (Fmk) = French franc, € (Lit) = Italian lira, ACSR = aluminum conductor steel reinforced, Co. = Company, kg = kilogram, PRs= Pakistan rupees, SKr = Swedish krona, PCCS = procurement contract summary sheet. Source: Water and Power Development Authority.

28 Appendix 6

PROJECTED AND ACTUAL DISBURSEMENTS ($ million)

Year Projected Actual

1996 17.70 28.56 1997 25.50 29.81 1998 54.00 38.28 1999 67.50 36.48 2000 70.50 53.34 2001 41.40 34.04 2002 23.40 20.13 2003 13.00 2004 0.87

Total 300.00 254.51

Source: Asian Development Bank Loans Financial Information System.

IMPLEMENTATION SCHEDULE

Description 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 1212345678910111212 3 456789101112123456789101112123456789101112123456789101112123456789101112123456789101112123456789101112123456789101112123456789101112 Land acquisition

Relocation and resettlement

Preparatory works (Contractors)

Main civil works (Construction): C1 Barrage

C2 Power channel

C3 Power complex

Mechanical and electrical works: ME - 01 Turbines and auxiliaries ME - 02 Generators and auxiliaries ME - 03 Transformers and reactors ME - 04 Crane

ME - 05 HV Switchgear, control, and protection ME - 06 MV and LV switchgear

ME - 07 Elevators

ME - 08 Diesel generating standby sets ME - 09 Gate equipment

ME - 10 Isolated phase bus

ME - 11 Switchyard steel structures ME - 12 Cables and accessories ME - 13 Miscellaneous auxiliaries ME - 14 SCADA and Appendix 7 Appendix telecommunications ME - 15 Transmission lines

ME - 16 Penstocks 29 HV - high voltage, LV - low voltage, MV - medium voltage; SCADA - Supervisory Control and Data Acquisition. Legend: - Appraisal

- Actual Sources: Asian Development Bank and Water and Power Development Authority estimates.

PROJECT COORDINATION CHART 30

Appendix 8 Appendix WAPDA Ministry of Water Government of Funding and Power Pakistan Agencies

Member (Water) Panel of Experts

Environmental Aspects Construction Aspects

Environmental General Manager Consultants Chief Executive/ Resettlement and and Project Director Construction Manager Review Panel Hattian Barotha

WAPDA Chief Engineer Environmental Cell Ghazi

Project Information Center Corporate & Construction Barrage and Power Complex Environmental Hattian Liaison Management Power Channel Office at Monitoring Consultants Office at Lahore Office at Barotha Office at Hattian Barotha Director (Contracts) Hattian Ghazi Barotha Taraqiati Chief Engineer (Civil) Idara Hattian Hattian Mechanical and Electrical (M&E) Chief Engineer (Power) Contracts NGOs Barotha Standing Committee Chief Engineer (M&E) Barotha

Superintending Engineer I Barotha

Superintending Engineer II Barrage

WAPDA = Water and Development Authority. Appendix 9 31

STATUS OF COMPLIANCE WITH LOAN COVENANTS

Covenant Reference Status of Compliance Project Implementation 1. The Water and Power Development Authority Loan Complied with. (WAPDA) shall be the Executing Agency, and Agreement the Water Wing of WAPDA shall form a (LA), Schedule project group that shall have overall 6, para. 1 (a) responsibility for project implementation. 2. The Ghazi Barotha project office shall be LA, Schedule 6, Complied with. responsible for day-to-day implementation of para. 1 (b) the Project and, as soon as implementation of the Project commences, be expanded and restructured as agreed between the Asian Development Bank (ADB) and WAPDA. 3. The Borrower and WAPDA shall not establish LA, Schedule 6, Complied with. the project entity unless and until they inform para. 1 (d) ADB of the details of the proposed arrangements of the establishment and operation of the project entity and obtain the prior written consent of ADB as to such proposed arrangements. Counterpart Funding WAPDA shall LA, Schedule 6, Not fully complied with. 4. (i) provide sufficient allocation to finance the para. 2(a) Project in its annual development plan each year from fiscal year 1995–1996 until completion of the Project; and (ii) provide by 31 March of each year an LA, Schedule 6, Not complied with. updated investment program and financial para. 2(b) projections for its Power Wing for the next 5 years for ADB's review. 5. The Borrower shall provide sufficient bridge LA, Schedule 6, Not complied with. financing to WAPDA for advance para. 3 procurement action, until effectiveness of the loan and cofinanciers' loans. Financial, Accounting, and Related Matters 6. WAPDA shall produce in each fiscal year LA, Schedule 6, Not fully complied with. funds from internal sources equivalent to not para. 4 (a) less than 40% of the annual average of Year Self-Financing Ratio (%) WAPDA's capital expenditures incurred, or 1998 43.4 expected to be incurred, for that year, the 1999 76.5 previous fiscal year, and the following fiscal 2000 (2.1) year. 2001 (2.9) 2002 36.2

32 Appendix 9

Covenant Reference Status of Compliance 7. WAPDA shall not later than 30 September LA, Schedule 6 Complied with. 1996 appoint management consultants to para. 6 assist WAPDA in designing and implementing a set of managerial, financial, and technical efficiency objectives by which to measure and improve the operational, managerial, and financial performance of WAPDA's power operations. 8. WAPDA shall furnish ADB not later than 12 Project Partly complied with. months after the close of the fiscal year Agreement Delays in submission of accounts. certified copies of audited accounts and (PA) Section financial statements and the report of the (Sec.) 2.09 (a) auditors. 9. In addition, WAPDA shall furnish ADB not PA Sec. 2.09 Partly complied with. later than 6 months after the close of the (b) (i) Delays in submission. fiscal year unaudited financial statements on the operations of its Power Wing. 10. By 1 March of each fiscal year, WAPDA shall PA, Sec. 2.09 Not complied with. furnish ADB financial projections of its Power (b) (ii) Wing. Debt Service 11. WAPDA shall not incur any debt unless a LA, Schedule 6, Not fully complied with. reasonable forecast of the revenue and paras. 5 (a) and expenditure shows that the estimated net (b) Year Debt Service Coverage revenue of WAPDA for each fiscal year Ratio during the term of the debt to be incurred 1998 0.9 shall be at least 1.5 times the estimated debt 1999 1.6 service requirements of WAPDA in such year 2000 0.9 on all debt of WAPDA incurred. 2001 0.6 2002 0.4 2003 0.5 System Loss 12. WAPDA shall ensure that its transmission LA, Schedule, Not complied with. and distribution losses do not exceed the 6, para. 10 level of 21.0% by 30 June 1996, 20.0% by 30 Year Percent June 1997, 19.5% by 30 June 1998, 19.0% 1996 24.4 by 30 June 1999, 18.5% by the 30 June 1997 24.1 2000, and 18.0% by 30 June 2001. 1998 26.0 1999 27.5 2000 27.3 2001 25.8 2002 25.7 2003 25.7

Appendix 9 33

Covenant Reference Status of Compliance Accounts Receivable 13. The Borrower and WAPDA shall ensure that LA, Schedule 6 Not fully complied with. the average accounts receivable shall not para. 7(a) exceed at any time the equivalent of 3 Year Receivables (months) months of energy sales. 1998 4.6 1999 4.5 2000 5.0 2001 2.7 2002 2.5 2003 2.5 14. WAPDA shall submit to ADB a quarterly LA, Schedule 6 Not complied with. report on its accounts receivable due from para. 7 (b) both federal and provincial consumers as well as nongovernment consumers. Tariffs 15. WAPDA shall ensure that any tariff LA, Schedule 6, Complied with. adjustments made in the case of those para. 8 (a) consumer categories for which the electricity tariff rates are below the overall average electricity tariff rates are higher in percentage terms than in the case of those consumers for which the average tariff rates are above the overall average electricity tariff rates. Environmental 16. The Borrower and WAPDA shall ensure that LA, Schedule 6, Complied with. all social and environmental aspects receive para. 11 (a) due consideration in the design, construction, Environmental impact assessment and operation and maintenance of the was prepared at the feasibility Project, in accordance with the provisions in stage and mitigation actions were the summary environmental impact incorporated in the project design. assessment and related environmental Environmental and settlement documents. actions were implemented and monitored by the World Bank. 17. The Borrower and WAPDA shall undertake LA, Schedule 6, Complied with. additional studies to update the para. 11 (b) environmental assessment of the transmission lines and ensure implementation of all mitigation and monitoring measures. 18. The Borrower and WAPDA shall promptly LA, Schedule 6, Complied with, but late. and efficiently carry out the agreed para. 11 (c) resettlement action plan. Although the resettlement action plan was carried out, its implementation was delayed due to problems in land acquisition price agreement. 19. WAPDA shall appoint consultants to the LA, Schedule 6, Complied with. Environmental Cell and Resource Division of para. 11 (d) Ghazi Barotha project office.

34 Appendix 9

Covenant Reference Status of Compliance 20. The Borrower shall carry out a LA, Schedule 6, Complied with. postconstruction environmental impact audit, para. 11 (h) a copy of which is to be furnished to ADB, and ADB’s comments should be taken into account. Social 21. The Borrower shall establish a project LA, Schedule 6, Complied with. nongovernment organization, to assist the para 11 (e) local population during implementation. 22. The Borrower and WAPDA shall finance the LA, Schedule 6, Complied with. agreed Integrated Regional Development para 11 (f) Plan.

Reporting 23. WAPDA shall furnish to ADB quarterly PA, Sec. 2.08 Complied with. reports on the execution of the Project and on (b) the operation of project facilities. 24. WAPDA shall prepare and furnish to ADB, PA, Sec. 2.08 Complied with, but late. after physical completion of the Project, a (c) report on the execution and initial operation of the Project.

Appendix 10 35

FINANCIAL STATEMENTS

1. The financial statements for the Water and Power Development Authority (WAPDA) are included here to highlight the agency’s performance in recent years. A balance sheet and income statement are provided for 1997–2003.

2. Although operating revenue increased by 12.7% per year during 1997–2003, operating expense rose 16.7% per year over the same period. Operating income has been falling and after 2001 became negative. Net income for 1997–2003 was consistently negative. The transmission and distribution losses during 1997–2003 show the continued trend of being greater than 18.0%, as in the covenants of the loan. Total equity and liabilities have increased annually at approximately 5.0%. Long-term debt also increased, at approximately 2.0% per year. Tariff level increases, including a hydel surcharge, have declined since 1998. In 1998, the tariff increased by approximately 15.0%, while in 2000 the tariff levels actually declined by 2.5%. In 2002, however, the tariff level increased by 10.0%. Year-end tariff levels declined from a 21.0% increase in 1998 to a 9.0% increase in 2002. These reductions in tariff levels have translated into operating revenue rising at a slower rate than operating expense. This, combined with a high percentage of transmission and distribution losses, has hampered efforts to improve WAPDA’s financial situation.

3. Despite increases in cash collection, WAPDA faced an acute shortage of funds. The main reasons for this were (i) revenue and cost mismatch, (ii) slackness of the public sector in payment of past and current energy dues, and (iii) a tremendous increase in the price of furnace oil and the resultant higher payment of independent power producers. During 2001–2002, WAPDA improved its recovery of receivables from the public sector. Operation and maintenance expenditure increased due to a revision of national pay scales in December 2001. In summary, all major cost components (i.e., cost of fuel, cost of independent power producers, and debt service and accumulated accounts receivable of the public sector) have contributed to the adverse financial conditions of WAPDA.

36 Appendix 10

Table A10.1: WAPDA Income Statement (PRs million)

Fiscal Year 1997 1998 1999 2000 2001 2002 2003

Electricity generation (GWh) 50,782 53,261 53,683 56,259 58,416 60,849 63,318 Import 10,740 13,580 15,326 17,864 24,446 23,242 24,378 Hydel 20,858 22,060 22,448 19,285 17,190 18,940 20,232 Thermal 19,184 17,621 15,909 19,110 16,781 18,667 18,708 Auxilliary consumption 1,270 1,332 1,074 1,125 1,168 1,217 1,342

Losses (%) Auxiliary 2.41 2.01 1.74 2.15 2.01 2.17 2.13 Transmission 8.21 8.46 7.79 7.19 7.86 7.79 7.80 Distribution 13.51 15.51 18.01 17.44 15.91 17.74 17.94 System loss 24.13 25.95 27.54 26.78 25.78 27.70 27.87

Electricity sold (GWh) 38,529 39,422 38,900 40,910 43,384 45,168 47,463

Average revenue (PRs/kWh) 2.330 2.715 3.150 3.060 3.226 3.572 3.816 Average revenue (% increase) 16.5 16.0 -2.9 5.4 10.7 6.8

Operating revenues 90,824 109,429 123,816 131,268 144,193 165,763 186,044 Base sales 34,743 37,604 40,553 39,365 47,718 50,894 60,567 Additional surcharge 40,325 53,955 66,473 67,928 72,782 93,242 106,501 Fuel surcharge 14,702 15,469 15,527 17,876 19,453 17,217 14,040 Other sales revenues 1,054 2,401 1,263 6,099 4,240 4,410 4,936

Operating expenses 82,281 102,197 85,580 107,486 142,741 176,334 187,292 Purchase of energy 35,311 53,148 42,532 54,150 84,612 109,101 114,907 Fuel cost 24,118 23,085 19,536 26,457 29,895 37,365 39,707 Maintenance 3,848 3,753 3,445 4,509 4,815 5,117 5,377 Operation and maintenance 9,875 11,072 9,515 10,642 10,859 12,144 13,932 Depreciation 6,371 7,212 8,398 9,753 10,872 11,343 12,481 Amortization 2,758 3,927 2,154 1,975 1,688 1,264 888

Operating income 8,543 7,232 38,236 23,782 1,452 (10,571) (1,248)

Non-operating income 4,699 6,479 5,474 2,383 2,622 10,225 10,233

Net income before fixed charges 13,242 13,711 43,710 26,165 4,074 (346) 8,985

Non-operating expenses 26,563 25,419 30,958 29,715 30,682 32,056 33,343 Interest expenses 14,277 13,177 18,413 16,443 16,844 17,238 17,553 Bad debt provision 957 1,145 1,345 1,395 1,531 1,830 2,040 Add: Hydel surcharge 4,869 5,097 5,200 5,877 6,307 6,988 7,750 Hydel payment 6,460 6,000 6,000 6,000 6,000 6,000 6,000

Net income (3,583) (1,514) 23,152 8,204 (13,994) (18,426) (8,858)

Ratio (%) Return on Net Fixed Assets (70.1) (179.0) (789.3) (69.9) (24.4) (61.2) (72.5) Return on Equity 22.3 21.0 26.2 26.1 24.0 25.9 25.2 Return on Equity w/out Revalued Asset (34.4) (34.3) (35.9) (28.6) (41.6) 59.5 (80.7)

GWh - gigawatt-hour, PRs - Pakistan rupees, kWh - kilowatt-hour. Source: Water and Power Development Authority audited financial statements. Appendix 10 37

Appendix 10 37

Appendix 10 37

Table A10.2: WAPDA Balance Sheet (PRs million)

Fiscal Year 1997 1998 1999 2000 2001 2002 2003

Assets

Net fixed assets in operation 138,340 161,171 189,034 220,449 232,334 225,153 273,546 Gross fixed assets in operation 187,999 221,808 258,069 299,237 321,994 326,155 387,029 Less: Accumulated depreciation 49,659 60,637 69,035 78,788 89,660 101,002 113,483

Capital work - in - progress 75,687 68,323 51,246 35,993 38,376 52,545 21,759

Total fixed assets 214,027 229,494 240,280 256,442 270,710 277,698 295,305

Currency fluctuation 4,296 3,699 3,520 3,233 2,808 2,434 1,643 Long-term investment 6,965 7,076 7,076 7,076 7,076 7,076 7,076 Notes receivable 25,736 24,040 23,197 23,197 23,197 21,558 19,952

Current assets 46,624 71,025 84,512 84,538 65,861 69,318 79,339 Cash 4,195 6,162 14,755 5,368 7,619 9,088 12,807 Inventories 10,926 11,964 12,442 12,442 12,442 12,442 12,442 Accounts receivable 17,671 41,104 45,520 54,183 32,456 33,591 38,985 Water wing account 5,881 5,382 5,382 5,651 5,933 6,230 6,541 Other current assets 7,951 6,413 6,413 6,894 7,411 7,967 8,564

Total Assets 297,648 335,334 358,585 374,486 369,652 378,084 403,315

Liabilities

Equity 121,732 127,961 151,346 198,866 176,138 161,073 175,811 Government contributions 18,128 28,122 28,122 64,505 66,505 66,505 86,505 Consumer capital contributions 22,288 19,533 22,151 25,085 28,226 31,586 35,181 Retained earning 81,316 80,306 101,073 109,276 81,407 62,982 54,125

Long-term debt 119,045 121,294 118,263 113,882 127,584 123,759 132,346 Long-term loans 104,207 106,567 103,536 106,849 108,973 105,600 110,170 Bonds 14,838 14,727 14,727 7,033 18,611 18,159 22,176

Current liabilities 56,868 86,079 88,976 61,737 65,933 92,394 95,158 Consumer deposits 2,194 2,487 2,800 3,151 3,526 3,928 4,357 Additional local financing (new bonds) 0 0 0 0 0 0 32,885 Accrued interest 2,031 0 0 0 0 0 0 Current maturities and other liabilities 52,643 83,592 86,176 58,586 62,407 88,466 57,916

Total liabilities 297,645 335,334 358,585 374,485 369,655 377,226 403,315

Ratios: - Current Ratio 0.82 0.83 0.95 1.37 1.00 0.75 0.83 - Long Term Debt/(LT Debt+Equity) (%) 49 49 44 36 42 43 43 - Equity/(Long Term Debt+Equity) (%) 51 51 56 64 58 57 57 - Accounts Receivables (Months) 2.3 4.6 4.5 5.0 2.7 2.5 2.5 Source: Water and Power Development Authority audited financial statements.

38 Appendix 11

WAPDA ELECTRICITY TARIFFS WATER AND POWER DEVELOPMENT AUTHORITY CURRENT TARIFFS Total Average Rate (PRs/kWh) Tariff Category 08 Aug 01 16 Feb 02 15 May 02 13 Aug 02 01 Nov 03 Gen Supply Tariff A-1 Incl. FATA Upto 50 units 1.40 1.40 1.40 1.40 1.40 For First 100 units (1-100) 2.14 2.16 2.30 2.49 2.57 For Next 200 units (100-300) 3.04 3.06 3.20 3.38 3.47 For Next 700 units (300-1000) 5.32 5.34 5.49 5.67 5.76 Above 1000 units 6.60 6.62 6.71 6.89 6.90 Gen Supply Tariff A-2 Incl. FATA For First 100 units (1-100) 6.76 6.79 6.87 7.07 6.80 Above 100 units 7.13 7.15 7.24 7.43 7.17 a) For Peak Load Requirement Above 20 kW 5.24 5.26 5.35 5.54 5.27 B-1 Upto 40 KW 220/400 V 4.81 4.83 4.98 5.29 5.21 B-2 +40 KW to - 500 kW 400 V 4.46 4.48 4.63 4.94 4.86 B-2 TOD Peak 6.39 6.41 6.56 6.87 6.57 B-2 TOD Off-Peak 4.24 4.27 4.41 4.72 4.57 B-3 Normal 11 & 33 kV 4.02 4.04 4.18 4.45 4.38 B-3 TOD Peak 4.83 4.85 4.99 5.26 5.19 B-3 TOD Off-Peak 3.26 3.28 3.43 3.70 3.62 B-4 Normal 66/132/220 kV 3.97 4.00 4.14 4.37 4.29 B-4 TOD Peak 4.76 4.78 4.93 5.16 5.08 B-4 TOD Off-Peak 3.18 3.20 3.35 3.58 3.50 Bulk Supply C-1 a) 400 V upto 20 kW 4.68 4.71 4.85 5.24 5.16 C-1 b) 400 V above 20 kW upto 500 kW 5.01 5.03 5.18 5.37 5.29 C-2 11/33 KV upto 5000 kW 4.83 4.85 4.99 5.17 5.09 C-3 All Loads 4.72 4.74 4.89 5.04 4.96 Agricultural D-1 SCARP 4.32 4.34 4.48 4.97 5.06 D-2 Punjab/Sindh 2.75 2.78 2.92 3.37 3.46 D-2 NWFP/Baluchistan 2.28 2.30 2.45 2.86 2.95 Temporary Supply E-1 Domestic 6.11 6.14 6.28 6.46 6.46 E-1 Commercial 8.89 8.91 9.00 9.11 9.11 E-2 Industrial 5.86 5.88 6.02 6.34 6.34 E-2 Bulk supply at 400 V 5.89 5.91 6.05 6.25 6.25 E-2 Bulk supply at 11 kV 5.55 5.57 5.71 5.88 5.88 E-2 Bulk supply to others 5.85 5.87 6.01 6.17 6.17 Seasonal Supply F To Industry Public Lighting G-1 To Provincial Government G-1 Other than above 7.08 7.10 7.19 7.12 7.13 Residential Colonies to IND H-1 Having own transformers 5.42 5.44 5.58 6.07 6.16 H-2 Others 5.45 5.47 5.61 6.10 6.19 OTHERS I Railway traction 4.42 4.44 4.59 5.08 5.17 J Cogeneration sale by WAPDA 5.20 5.22 5.36 5.73 5.72 J Cogeneration purchase by WAPDA Dec. to J. 1.03 1.03 1.03 1.03 1.03 J Cogeneration purchase by WAPDA Aug. to . 0.78 0.78 0.78 0.78 0.78 SPECIAL CONTRACT K AJ&K 3.66 3.68 3.83 4.20 4.20 K KESC 3.34 3.34 3.47 3.79 3.69 K Rewat Lab 3.87 3.89 4.03 4.41 4.49 AJ &K = Azad Jammu and Kashmir, FATA = Federally Administered Tribal Areas, IND = India, KESC = Karachi Electricity Supply Company kV = kilovolt, kW = kilowatt, NWFP = North West Frontier Province, SCARP = Swabi Salinity Control and Reclamation Project, TOD = time of day, V = volt. WAPDA = Water and Power Development Authority.

PLANNED AND ACTUAL PROCUREMENT SCHEDULE

Bid Submission of Bid Approval by Release of Name of Bid Evaluation to Approval of Contract Award of Contract Packages Status Documents Documents to Funding Bid Bids Opening Financing Funding Agency by Funding Agency Contract Completed Funding Agency Agency Documents Agency Preparatory Works SAR Aug-94 - - Sep-94 Apr-95 - - Jun-95 Power Channel Colony Revised Aug-94 - - Sep-94 Apr-95 - - Jun-95 WAPDA Actual Aug-94 - - Sep-94 Apr-95 - - Jun-95 SAR Aug-94 - - Sep-94 Apr-95 - - Jun-95 Power Complex Colony Revised Aug-94 - - Sep-94 Apr-95 - - Jun-95 WAPDA Actual Aug-94 - - Sep-94 Apr-95 - - Jun-95 SAR Aug-94 - - Sep-94 Apr-95 - - Jun-95 Access Roads Revised Aug-94 - - Sep-94 Apr-95 - - Jun-95 WAPDA Actual Aug-94 - - Sep-94 Apr-95 - - Jun-95 SAR Oct-94 - - Oct-94 Feb-95 - - Feb-95 Resettlement Villages Revised Oct-94 - - Oct-94 Feb-95 - - Apr-95 WAPDA Actual Oct-94 - - Oct-94 Feb-95 - - Apr-95 Civil Works Contracts SAR May-94 Jun-94 Jun-94 Aug-94 May-95 Jul-95 Aug-95 Nov-95 Barrage and Ancillary Works - C-01 Revised May-94 Jun-94 Jun-94 Aug-94 May-95 Jul-95 Aug-95 Dec-95 ADB Actual May-94 Jun-94 Jun-94 Aug-94 May-95 Jul-95 Aug-95 Dec-95 SAR May-94 Jun-94 Jun-94 Aug-94 May-95 Jul-95 Aug-95 Nov-95 Power Channel and Ancillary Works - C-02 Revised May-94 Jun-94 Jun-94 Aug-94 May-95 Jul-95 Aug-95 Dec-95 World Bank Actual May-94 Jun-94 Jun-94 Aug-94 May-95 Jul-95 Aug-95 Dec-95 SAR May-94 Jun-94 Jun-94 Aug-94 Dec-95 Feb-95 Mar-96 Apr-96 Power Complex and Ancillary Works - C-03 Revised May-94 Jun-94 Jun-94 Aug-94 Jan-96 Jun-96 Aug-96 Feb-97 WB/JBIC Actual May-94 Jun-94 Jun-94 Aug-94 Jan-96 Jun-96 Aug-96 Feb-97 SAR Dec-95 - - Jan-96 Apr-96 - Aug-96 Sep-96 Penstocks - C-03A (nominated subcontractor for C-03) Revised Sep-96 Nov-96 Dec-96 Jun-98 * Jul-98 Oct-98 Nov-98 Dec-98 KfW Actual Sep-96 Nov-96 Dec-96 Jun-98 Jul-98 Oct-98 Nov-98 Jan-99 Mechanical and Electrical Contracts SAR Jan-95 Apr-95 Sep-94 Jan-96 Apr-96 - Aug-96 Sep-96 ME-01 : Turbines and Auxiliaries Revised Feb-96 Feb-96 Mar-96 Mar-96 Jun-96 Nov-96 Apr -97 Nov-97 KfW/JBIC Actual Feb-96 Feb-96 Mar-96 Mar-96 Jun-96 Nov-96 Apr -97 Nov-97 SAR Jan-95 Apr-95 Sep-94 Jan-96 Apr-96 - Aug-96 Sep-96 ME-02 : Generators and Auxiliaries Revised Feb-96 Feb-96 Mar-96 Feb-96 Jun-96 Feb-97 Apr -97 Dec-97 JBIC Actual Feb-96 Feb-96 Mar-96 Mar-96 Jun-96 Feb-97 Apr -97 Dec-97 SAR May-96 - - Sep-96 Jan-97 - Jun-97 Jul-97 ME-03 : Transformers, MV/LV Switchgear and Station Revised Jun-97 Sep-97 Oct-97 Oct-97 Mar 98 Nov-98 Apr-99 Oct-99 KfW Auxiliaries Actual Jun-97 Sep-97 Oct-97 Oct-97 Mar 98 Nov-98 May-99 Oct-99 ME-04 : Cranes SAR Mar-95 Jun-95 Jul-95 Sep-95 Jan-96 Jul-96 Aug-96 Apr-96 12 Appendix - Lot-I Powerhouse Main Bridge Cranes Revised Apr-95 May-95 May-95 Jun-95 Oct-95 May-96 Jul-96 Jun-97 ADB Actual Apr-95 May-95 Jun-95 Jun-95 Oct-95 May-96 Jul-96 Jun-97 - Lot-II Renamed as ME-04A - Lot-III Powerhouse Auxillary Bridge Cranes and SAR Mar-95 Jun-95 Jul-95 Sep-95 Jan-96 Jul-96 Aug-96 Apr-96 ADB Hoisting Equipment Revised Apr-95 May-95 May-95 Jun-95 Oct-95 May-96 Jul-96 May-97 39 Actual Apr-95 May-95 Jun-95 Jun-95 Oct-95 May-96 Jul-96 May-97

40

Appendix 12 Appendix

Bid Submission of Bid Approval by Release of Name of Bid Evaluation to Approval of Contract Award of Contract Packages Status Documents Documents to Funding Bid Bids Opening Financing Funding Agency by Funding Agency Contract

Completed Funding Agency Agency Documents Agency SAR Mar-95 Jun-95 Jul-95 Sep-95 Jan-96 Jul-96 Aug-96 Apr-96 - Lot-IV Gantry Cranes Revised Apr-95 May-95 May-95 Jun-95 Oct-95 May-96 Jul-96 Dec-96 ADB Actual Apr-95 May-95 Jun-95 Jun-95 Oct-95 May-96 Jul-96 Dec-96 ME-04A SAR Mar-95 Jun-95 Jul-95 Sep-95 Jan-96 Jul-96 Aug-96 Apr-96 - Lot-1 Mobile Crane Revised Apr-95 May-95 Jun-95 Jan-98 * Mar-98 Oct-98 Oct-98 Oct-99 ADB Actual Apr-95 May-95 Jun-95 Jan-98 Mar-98 Oct-98 Oct-98 Sep-99 SAR Mar-95 Jun-95 Jul-95 Sep-95 Jan-96 Jul-96 Aug-96 Apr-96 - Lot-2 50 T Truck Trailer Revised Apr-95 May-95 Jun-95 Jan-98 * Mar-98 Oct-98 Oct-98 Oct-99 ADB Actual Apr-95 May-95 Jun-95 Sep-2000 Oct-2000 Dec-2000 Dec-2000 Jul-2001 SAR Mar-95 Jun-95 Jul-95 Sep-95 Jan-96 Jul-96 Aug-96 Apr-96 - Lot-3 Trashrack Cleaning Machine Revised Apr-95 May-95 Jun-95 Jan-98 * Mar-98 Oct-98 Oct-98 Oct-99 ADB Actual Apr-95 May-95 Jun-95 Jan-98 Mar-98 Oct-98 Oct-98 Nov-99 ME-05 : HV Switchgear, Control & Protection SAR Mar-96 May-96 Jul-96 Jul-96 Dec-96 Mar-97 Apr-97 May-97 Equipment Revised Dec-97 Feb-98 Mar-98 Apr-98 Jun-98 Feb-99 Feb-99 Mar-99 EIB Actual Dec-97 Feb-98 Mar-98 Apr-98 Jun-98 Feb-99 Feb-99 Apr-99 ME-08 : Control, Instrumentation, SCADA and SAR Jan-96 Feb-96 Mar-96 Apr-96 Aug-96 Dec-96 Feb-97 Mar-97 Telecommunication Revised Jan-97 Jan-97 Feb-97 Mar-97 Jun-97 Jan-98 Apr-98 Aug-98 KfW Actual Jan-97 Jan-97 Feb-97 Mar-97 Jun-97 Jan-98 Apr-98 Aug-98 SAR Jan-95 Apr-95 May-95 May-95 Aug-95 Dec-95 Nov-96 Mar-97 ME-09 : Gate Equipment Revised Apr-95 May-95 May-95 Jun-95 Oct-95 Apr-96 Aug-96 Jan-97 ADB Actual May-95 May-95 Jun-95 Jun-95 Oct-95 Apr-96 Aug-96 Dec-96 ME-10 : Transmission Lines SAR Sep-96 - - Jan-97 Jun-97 - Aug-97 Sep-97 ADB/IDB - In & Out Arrangement of Tarbela-Gatti 500 kV Revised Apr-98 May-98 Jun-98 Oct-98 Feb-99 Jun-99 Sep-99 Oct-99 ADB Circuits 1&2 at Barotha Actual Action being taken by Power Wing of WAPDA. Oct 99 - Barotha-Rewat 500 kV Transmission Line Circuit 1&2 Nov-2001 IDB ADB = Asian Development Bank, EIB = European Investment Bank, IDB = Islamic Development Bank, JBIC = Japan Bank for International Cooperation, KfW = Kreditanstalt fur Wiederaufbau, kV = kilovolt, SCADA = supervisory cont and data acquisition, WAPDA = Water and Power Development Authority. * Re-tendered. Source: WAPDA. Notes: 1. Defects liability period not included in the revised dates of completion of works. 2. ME-06 and ME-07 have been merged in ME-03.

Appendix 13 41

FINANCIAL AND ECONOMIC REEVALUATION

A. General

1. The methodology and assumptions adopted for the overall financial and economic evaluation of the Project generally follow those carried out at appraisal. The financial and economic benefits were quantified by comparing the with and without project cases. Costs and benefits are measured at border price equivalent values, using world price numeraire, and expressed in 2004 constant prices in Pakistan rupees. The Manufacturing Unit Value Index, published by the International Monetary Fund, was used for converting costs and benefits to 2004 prices. The costs and benefits of the nontraded components were converted to the world price numeraire by using a standard conversion factor of 0.837 and expressed in 2004 constant prices. The Project’s life is assumed to be 60 years, with no salvage value at the end of the project life, as at appraisal.

B. Costs

2. The costs of construction were derived from the actual costs incurred, excluding interest and other charges during construction. The economic costs are derived from their financial costs by excluding taxes and duties and by converting the nontraded components to the world price numeraire using the standard conversion factor of 0.837, as at appraisal. They were expressed in 2004 constant prices. The annual operation and maintenance costs have been based on the information collected from the Water and Power Development Authority (WAPDA). Transmission and distribution (T&D) costs were estimated by WAPDA as equivalent to 0.5% of the capital cost for transmission and 2.0% of the capital cost for distribution. T&D costs have been included in operation and maintenance costs in Table A13.1 and A13.2. The capital cost stream also includes a provision in year 31 and year 32 after project opening (i.e., 2033 and 2034) for replacement of mechanical and electrical equipment, as at appraisal.

C. System Losses

3. The Project’s actual overall system losses (technical and nontechnical) for 2003–2004 were used. These averaged 28%, with T&D losses accounting for 26%. After 2004, losses are assumed to remain constant.

D. Benefits

1. Financial Benefits

4. The financial benefits for the Project were measured on the basis of incremental electricity volumes made possible by the expansion of the generation facilities. Benefits were estimated by multiplying the incremental sales by the annual average tariff revenue per kilowatt- hour (kWh) for 2004. The tariff rate from 2004 on has been assumed to remain constant. The Project generated 2,377 gigawatt-hours (GWh) in 2003 and 6,215 GWh in 2004. The Project is expected to generate 6,600 GWh per year after 2004, and this figure has been used.

42 Appendix 13

2. Economic Benefits

5. The analysis of project benefits has used similar assumptions to those used at appraisal1 but updated by the most recently available data and prices. The value of economic benefits of electricity consumption for each major consumer category were based on (i) the induced market, which develops from the increasing electricity consumption of existing and new consumers (i.e., incremental benefits) and (ii) the diverted market, which is the current energy consumption of new consumers for which electricity replaces kerosene and/or diesel (i.e., nonincremental benefits). The benefits from the induced market (estimated at 30% for residential consumers, 50% for commercial and industrial consumers, and 20% for agricultural consumers) are valued in terms of consumer surplus (i.e., willingness to pay or the weighted average of the electricity tariffs and financial price of kerosene). For the diverted market (estimated at 70% for residential consumers, 50% for commercial and industrial consumers, and 80% for agricultural consumers), the benefits come from the resource cost savings from the displaced use of alternative energy (i.e., kerosene for domestic consumers and diesel- generated power for commercial, industrial, and agricultural consumers).

6. The resulting average value of residential power consumption, which accounts for 49% of WAPDA’s energy sales, was estimated to be PRs17/kWh. The average economic value of industrial power consumption, which accounts for 31% of WAPDA’s energy sales, was PRs6.5/kWh. The average economic value of commercial power consumption, which accounts for 6% of WAPDA’s energy sales, was PRs11/kWh. Finally, the average economic value of power consumption for agricultural users, who represent around 14% of WAPDA’s energy sales, was estimated to be PRs8.6/kWh. The average weighted tariff for these four consumer groups was PRs12.2/kWh, for both incremental and nonincremental benefits.

7. Assuming a linear demand curve, the incremental consumer surplus would equal half the price difference before and after electrification, multiplied by the quantity difference. As the demand curve is unlikely to be linear, the product of the price and quantity differences was multiplied by a willingness-to-pay factor of 0.400, rather than 0.500. Since the incremental energy consumption was valued in local prices, the result was converted to economic border prices by multiplying the calculated consumer surplus by the standard conversion factor of 0.837.

E. Financial and Economic Analysis

1. Financial Analysis

8. The financial internal rate of return (FIRR) for the Project was estimated at 14.2%. Project sustainability was assessed by comparing the weighted average cost of capital (WACC) to the FIRR calculated for the Project. The WACC has been estimated to be 6.5%. The financial net present value, discounted at the WACC, was PRs79,694 million. Since the Project had an FIRR greater than the WACC of 6.5%, the Project is financially viable. The FIRR of the Project is shown in Table A13.1. The recalculated FIRR is higher than that calculated at appraisal (13.0%) because the capital costs to implement the Project were reduced from the initial estimate, even though the period of implementation was longer.

1 See appraisal of the Ghazi Barotha Hydropower Project, December 1995, Appendix 15.

Appendix 13 43

2. Economic Analysis

9. The economic internal rate of return (EIRR) of the Project has been calculated for a project life of 60 years from completion. The EIRR of the Project was estimated to be 31.4%. When compared to the opportunity cost of capital of 12.0%, the recalculated EIRR shows that the Project is economically feasible. The recalculated EIRR of 31.4% was higher than that calculated at appraisal (17.9%) because the capital cost to implement the Project was reduced from the initial estimate, and the implementation period was longer than envisaged at appraisal (thus further reducing the discounted cash flow of the capital costs). The reevaluation also considered four segments of the power consumption market (i.e., domestic, commercial, industrial, and agricultural). At appraisal only three sectors were examined (i.e., domestic, industrial, and agricultural). Also, in the reevaluation a more detailed analysis of consumer surplus was made. At appraisal the assumptions on consumer surplus were conservative. The EIRR of the Project is shown in Table A13.2.

44 Appendix 13

44 Appendix 13

44 Appendix 13

44 Appendix 13

Table A13.1: Financial Internal Rate of Return (PRs million in 2004 Constant Prices)

Fiscal Capital O&M Generation T&D Total Generation T&D Net Sales Total Net Year Cost Cost Cost Cost Cost (GWh) Losses (GWh) Revenue Cashflow (GWh) 1994 17 17 (17) 1995 328 328 (328) 1996 3,801 3,801 (3,801) 1997 6,181 6,181 (6,181) 1998 5,282 5,282 (5,282) 1999 9,848 9,848 (9,848) 2000 11,392 11,392 (11,392) 2001 13,159 13,159 (13,159) 2002 11,912 11,912 (11,912) 2003 12,596 3,726 2,189 2,011 16,321 2,377 666 1,711 7,188 (9,133) 2004 4,174 3,935 5,722 2,357 8,109 6,215 1,740 4,475 18,794 10,685 2005 3,935 6,077 1,959 3,935 6,600 1,848 4,752 19,958 16,024 2006 3,935 6,077 1,959 3,935 6,600 1,848 4,752 19,958 16,024 2007 3,935 6,077 1,959 3,935 6,600 1,848 4,752 19,958 16,024 2008 3,935 6,077 1,959 3,935 6,600 1,848 4,752 19,958 16,024 2009 3,935 6,077 1,959 3,935 6,600 1,848 4,752 19,958 16,024 2010 3,935 6,077 1,959 3,935 6,600 1,848 4,752 19,958 16,024 2011 3,935 6,077 1,959 3,935 6,600 1,848 4,752 19,958 16,024 2012 3,935 6,077 1,959 3,935 6,600 1,848 4,752 19,958 16,024 2013 3,935 6,077 1,959 3,935 6,600 1,848 4,752 19,958 16,024 2014 3,935 6,077 1,959 3,935 6,600 1,848 4,752 19,958 16,024 2015 3,935 6,077 1,959 3,935 6,600 1,848 4,752 19,958 16,024 2016 3,935 6,077 1,959 3,935 6,600 1,848 4,752 19,958 16,024 2017 3,935 6,077 1,959 3,935 6,600 1,848 4,752 19,958 16,024 2018 3,935 6,077 1,959 3,935 6,600 1,848 4,752 19,958 16,024 2019 3,935 6,077 1,959 3,935 6,600 1,848 4,752 19,958 16,024 2020 3,935 6,077 1,959 3,935 6,600 1,848 4,752 19,958 16,024 2021 3,935 6,077 1,959 3,935 6,600 1,848 4,752 19,958 16,024 2022 3,935 6,077 1,959 3,935 6,600 1,848 4,752 19,958 16,024 2023 3,935 6,077 1,959 3,935 6,600 1,848 4,752 19,958 16,024 2024 3,935 6,077 1,959 3,935 6,600 1,848 4,752 19,958 16,024 2025 3,935 6,077 1,959 3,935 6,600 1,848 4,752 19,958 16,024 2026 3,935 6,077 1,959 3,935 6,600 1,848 4,752 19,958 16,024 2027 3,935 6,077 1,959 3,935 6,600 1,848 4,752 19,958 16,024 2028 3,935 6,077 1,959 3,935 6,600 1,848 4,752 19,958 16,024 2029 3,935 6,077 1,959 3,935 6,600 1,848 4,752 19,958 16,024 2030 3,935 6,077 1,959 3,935 6,600 1,848 4,752 19,958 16,024 2031 3,935 6,077 1,959 3,935 6,600 1,848 4,752 19,958 16,024 2032 3,935 6,077 1,959 3,935 6,600 1,848 4,752 19,958 16,024 2033 4,780a 3,935 6,077 1,959 8,715 6,600 1,848 4,752 19,958 11,244 2034 4,780a 3,935 6,077 1,959 8,715 6,600 1,848 4,752 19,958 11,244 2035 3,935 6,077 1,959 3,935 6,600 1,848 4,752 19,958 16,024 2036 3,935 6,077 1,959 3,935 6,600 1,848 4,752 19,958 16,024 2037 3,935 6,077 1,959 3,935 6,600 1,848 4,752 19,958 16,024 2038 3,935 6,077 1,959 3,935 6,600 1,848 4,752 19,958 16,024 2039 3,935 6,077 1,959 3,935 6,600 1,848 4,752 19,958 16,024 2040 3,935 6,077 1,959 3,935 6,600 1,848 4,752 19,958 16,024 2041 3,935 6,077 1,959 3,935 6,600 1,848 4,752 19,958 16,024 2042 3,935 6,077 1,959 3,935 6,600 1,848 4,752 19,958 16,024 2043 3,935 6,077 1,959 3,935 6,600 1,848 4,752 19,958 16,024 2044 3,935 6,077 1,959 3,935 6,600 1,848 4,752 19,958 16,024 2045 3,935 6,077 1,959 3,935 6,600 1,848 4,752 19,958 16,024 2046 3,935 6,077 1,959 3,935 6,600 1,848 4,752 19,958 16,024 2047 3,935 6,077 1,959 3,935 6,600 1,848 4,752 19,958 16,024 2048 3,935 6,077 1,959 3,935 6,600 1,848 4,752 19,958 16,024 2049 3,935 6,077 1,959 3,935 6,600 1,848 4,752 19,958 16,024 2050 3,935 6,077 1,959 3,935 6,600 1,848 4,752 19,958 16,024 2051 3,935 6,077 1,959 3,935 6,600 1,848 4,752 19,958 16,024 2052 3,935 6,077 1,959 3,935 6,600 1,848 4,752 19,958 16,024 2053 3,935 6,077 1,959 3,935 6,600 1,848 4,752 19,958 16,024 2054 3,935 6,077 1,959 3,935 6,600 1,848 4,752 19,958 16,024 2055 3,935 6,077 1,959 3,935 6,600 1,848 4,752 19,958 16,024 2056 3,935 6,077 1,959 3,935 6,600 1,848 4,752 19,958 16,024 2057 3,935 6,077 1,959 3,935 6,600 1,848 4,752 19,958 16,024 2058 3,935 6,077 1,959 3,935 6,600 1,848 4,752 19,958 16,024 2059 3,935 6,077 1,959 3,935 6,600 1,848 4,752 19,958 16,024 2060 3,935 6,077 1,959 3,935 6,600 1,848 4,752 19,958 16,024 2061 3,935 6,077 1,959 3,935 6,600 1,848 4,752 19,958 16,024 2062 3,935 6,077 1,959 3,935 6,600 1,848 4,752 19,958 16,024

FIRR 14.2% GWh (gigawatt-hour) = 1,000,000 kWh, kV (kilovolt) = 1,000 V, kWh (kilowatt-hour) = 1,000 Wh, O&M = operation and maintenance, PRs = Pakistan rupees a Represents mechanical and electrical replacement costs Source: Asian Development Bank Estimates.

44 Appendix 13

Appendix 13 45

Appendix 13 45 Table A13.2: Economic Internal Rate of Return (PRs Million in 2004 Constant Prices)

Fiscal Capital O&M Generation T&D Total Generation T&D Net Sales Average Total Net Year Cost Cost Cost Costs Cost (GWh) Losses (GWh) Benefit Benefits Cashflow (GWh) (PRs/kWh) 1994 16 16 (16) 1995 306 306 (306) 1996 3,651 3,651 (3,651) 1997 6,129 6,129 (6,129) 1998 5,170 5,170 (5,170) 1999 9,737 9,737 (9,737) 2000 11,236 11,236 (11,236) 2001 12,907 12,907 (12,907) 2002 11,617 11,617 (11,617) 2003 12,330 3,655 2,189 1,974 15,985 2,377 666 1,711 12 20,880 4,894 2004 4,121 3,861 5,722 1,931 7,982 6,215 1,740 4,475 12 54,593 46,611 2005 3,861 6,077 1,931 3,861 6,600 1,848 4,752 12 57,974 54,113 2006 3,861 6,077 1,931 3,861 6,600 1,848 4,752 12 57,974 54,113 2007 3,861 6,077 1,931 3,861 6,600 1,848 4,752 12 57,974 54,113 2008 3,861 6,077 1,931 3,861 6,600 1,848 4,752 12 57,974 54,113 2009 3,861 6,077 1,931 3,861 6,600 1,848 4,752 12 57,974 54,113 2010 3,861 6,077 1,931 3,861 6,600 1,848 4,752 12 57,974 54,113 2011 3,861 6,077 1,931 3,861 6,600 1,848 4,752 12 57,974 54,113 2012 3,861 6,077 1,931 3,861 6,600 1,848 4,752 12 57,974 54,113 2013 3,861 6,077 1,931 3,861 6,600 1,848 4,752 12 57,974 54,113 2014 3,861 6,077 1,931 3,861 6,600 1,848 4,752 12 57,974 54,113 2015 3,861 6,077 1,931 3,861 6,600 1,848 4,752 12 57,974 54,113 2016 3,861 6,077 1,931 3,861 6,600 1,848 4,752 12 57,974 54,113 2017 3,861 6,077 1,931 3,861 6,600 1,848 4,752 12 57,974 54,113 2018 3,861 6,077 1,931 3,861 6,600 1,848 4,752 12 57,974 54,113 2019 3,861 6,077 1,931 3,861 6,600 1,848 4,752 12 57,974 54,113 2020 3,861 6,077 1,931 3,861 6,600 1,848 4,752 12 57,974 54,113 2021 3,861 6,077 1,931 3,861 6,600 1,848 4,752 12 57,974 54,113 2022 3,861 6,077 1,931 3,861 6,600 1,848 4,752 12 57,974 54,113 2023 3,861 6,077 1,931 3,861 6,600 1,848 4,752 12 57,974 54,113 2024 3,861 6,077 1,931 3,861 6,600 1,848 4,752 12 57,974 54,113 2025 3,861 6,077 1,931 3,861 6,600 1,848 4,752 12 57,974 54,113 2026 3,861 6,077 1,931 3,861 6,600 1,848 4,752 12 57,974 54,113 2027 3,861 6,077 1,931 3,861 6,600 1,848 4,752 12 57,974 54,113 2028 3,861 6,077 1,931 3,861 6,600 1,848 4,752 12 57,974 54,113 2029 3,861 6,077 1,931 3,861 6,600 1,848 4,752 12 57,974 54,113 2030 3,861 6,077 1,931 3,861 6,600 1,848 4,752 12 57,974 54,113 2031 3,861 6,077 1,931 3,861 6,600 1,848 4,752 12 57,974 54,113 2032 3,861 6,077 1,931 3,861 6,600 1,848 4,752 12 57,974 54,113 2033 4,644a 3,861 6,077 1,931 8,505 6,600 1,848 4,752 12 57,974 49,469 2034 4,644a 3,861 6,077 1,931 8,505 6,600 1,848 4,752 12 57,974 49,469 2035 3,861 6,077 1,931 3,861 6,600 1,848 4,752 12 57,974 54,113 2036 3,861 6,077 1,931 3,861 6,600 1,848 4,752 12 57,974 54,113 2037 3,861 6,077 1,931 3,861 6,600 1,848 4,752 12 57,974 54,113 2038 3,861 6,077 1,931 3,861 6,600 1,848 4,752 12 57,974 54,113 2039 3,861 6,077 1,931 3,861 6,600 1,848 4,752 12 57,974 54,113 2040 3,861 6,077 1,931 3,861 6,600 1,848 4,752 12 57,974 54,113 2041 3,861 6,077 1,931 3,861 6,600 1,848 4,752 12 57,974 54,113 2042 3,861 6,077 1,931 3,861 6,600 1,848 4,752 12 57,974 54,113 2043 3,861 6,077 1,931 3,861 6,600 1,848 4,752 12 57,974 54,113 2044 3,861 6,077 1,931 3,861 6,600 1,848 4,752 12 57,974 54,113 2045 3,861 6,077 1,931 3,861 6,600 1,848 4,752 12 57,974 54,113 2046 3,861 6,077 1,931 3,861 6,600 1,848 4,752 12 57,974 54,113 2047 3,861 6,077 1,931 3,861 6,600 1,848 4,752 12 57,974 54,113 2048 3,861 6,077 1,931 3,861 6,600 1,848 4,752 12 57,974 54,113 2049 3,861 6,077 1,931 3,861 6,600 1,848 4,752 12 57,974 54,113 2050 3,861 6,077 1,931 3,861 6,600 1,848 4,752 12 57,974 54,113 2051 3,861 6,077 1,931 3,861 6,600 1,848 4,752 12 57,974 54,113 2052 3,861 6,077 1,931 3,861 6,600 1,848 4,752 12 57,974 54,113 2053 3,861 6,077 1,931 3,861 6,600 1,848 4,752 12 57,974 54,113 2054 3,861 6,077 1,931 3,861 6,600 1,848 4,752 12 57,974 54,113 2055 3,861 6,077 1,931 3,861 6,600 1,848 4,752 12 57,974 54,113 2056 3,861 6,077 1,931 3,861 6,600 1,848 4,752 12 57,974 54,113 2057 3,861 6,077 1,931 3,861 6,600 1,848 4,752 12 57,974 54,113 2058 3,861 6,077 1,931 3,861 6,600 1,848 4,752 12 57,974 54,113 2059 3,861 6,077 1,931 3,861 6,600 1,848 4,752 12 57,974 54,113 2060 3,861 6,077 1,931 3,861 6,600 1,848 4,752 12 57,974 54,113 2061 3,861 6,077 1,931 3,861 6,600 1,848 4,752 12 57,974 54,113 2062 3,861 6,077 1,931 3,861 6,600 1,848 4,752 12 57,974 54,113

EIRR 31.4% GWh (gigawatt-hour) = 1,000,000 kWh, kV (kilovolt) = 1,000 V, kWh (kilowatt-hour) = 1,000 Wh, O&M = operation and maintenance, PR = Pakistan rupees a Represents mechanical and electrical replacement costs Source: Asian Development Bank Estimates.

46 Appendix 14

DATA ON LAND, RESETTLEMENT, INCOME LOSS, AND COMPENSATION

The following tables present data on land acquisition and resettlement details for each project component.

Table A14.1: Land Acquisition (Hectares)

Project Component Land Acquired Government Private Total Barrage 952.40 809.87 1,762.27 Power Channel 2,345.09 2,345.09 Power Complex 1,154.35 1,154.35

Total 952.40 4,309.31 5,261.71 Source: Water and Power Development Authority.

Table A14.2: Details of Land and Built-Up Property Cost, Families Relocated, and Earnings lost (PRs million)

Description Cost of BUP Families Relocated Loss of Earnings (PRs million) (PRs million) North-West Frontier 24.567 21 10.489

Punjab 59.437 115 1.175

Total 84.004 136 11.664 BUP = built-up property, PRs = Pakistan rupees. Source: Water and Power Development Authority.

Table A14.3: Details of Income Loss Compensation (PRs million)

Description Income Loss (PRs million) North-West Frontier Crop compensation paid for land under Jabba dyke at right bank 0.766 Loss of earnings paid to fishermen 2.898 Loss of earnings paid for poultry farm 0.952 Loss of earnings paid for water mills in Pontia village 0.229 Compensation paid for grazing rights for villages 5.644

Punjab Loss of earnings paid for two poultry farms 1.175

Total 11.664 PRs = Pakistan rupees. Source: Water and Power Development Authority.

Appendix 14 47

Table A14.4: Plots in Resettlement Villages

Resettlement Plots Allotted Remaining Houses Land Cost Construction Total Village Plots Plots Constructed (PRs Cost Cost million) (PRs million) (PRs million) Feroze Banda 74 70 4 45 16.440 7.450 23.890 Barotha 29 28 1 19 1.448 7.283 8.731 Essa (Ghazi) 27 23 4 16 5.540 5.490 11.030 Total 130 121 9 80 23.428 20.223 43.651 PRs = Pakistan rupees. Source: Water and Power Development Authority.

48 Appendix 15

QUANTITATIVE ASSESSMENT OF OVERALL PROJECT PERFORMANCE

Table A15.1: Overall Rating

Criteria Assessment Rating (0–3)Weights Weighted (%) Rating

Relevance Highly Relevant 3 20 0.60 Efficacy Efficacious 2 25 0.50 Efficiency Efficient 2 20 0.40 Sustainability Less Likely 1 40 0.40 Institutional Development Moderate 1 15 0.15

Overall Rating Successful 2.05

Notes: Relevance - Project objectives and outputs were relevant to strategic objectives of the Government and the Asian Development Bank. Efficacy - Project achieved its targets and objectives. Efficiency - Project achieved objectives in an efficient manner. Sustainability - Project benefits and development impacts are sustainable. Institutional Development - Project had beneficial impacts on government policy and institutional capacity and other positive social impacts. Source: ADB staff estimate.

Table A15.2: Rating System

Rating Relevance Efficacy Efficiency Sustainability Institutional Value Development

3 Highly Highly Highly Most Likely Substantial Relevant Efficacious Efficient 2 Relevant Efficacious Efficient Likely Significant 1 Partly Less Less Less Likely Moderate Relevant Efficacious Efficient 0 Irrelevant InefficaciousInefficient Unlikely Negligible Notes: Rating: greater than 2.5 and no rating less than 2 = Highly Successful 1.6–2.5 and no rating of 0 = Successful 0.6–1.6 and no more than two ratings of 0 = Partly Successful less than 0.6 or three or more ratings of 0 = Unsuccessful Source: ADB staff estimates.