Why the $5 Billion Neelum Jhelum Project Will Stay Shut Until 2028
For a country that has spent two decades wrestling with power cuts, few names carry as much disappointment as Neelum Jhelum. The project was supposed to be Pakistan's answer to expensive imported fuel, a source of cheap and renewable electricity drawn from the mountains of Azad Kashmir.
Instead it has become something closer to a case study in how a nation can pour nearly five billion dollars into the ground and still end up short of power. According to a report carried by Geo News, the plant will now stay offline until at least March 2028, stretching its current shutdown to almost four years.
A Project Built to Solve a Crisis and Delayed Long Enough to Deepen One
The Neelum Jhelum Hydropower Project was designed to divert water from the Neelum River through a tunnel system stretching more than fifty kilometres and feed it into a power station with an installed capacity of 969 megawatts. On paper the numbers were extraordinary for a country that badly needed cheap generation.
The plant was meant to produce over five thousand gigawatt hours of electricity every year at a tariff far below what thermal power plants running on imported fuel could ever offer, as detailed in the project's own technical record on the Neelum Jhelum Hydropower Plant profile.
Getting there took far longer and cost far more than anyone imagined. Work began in 2008 after a Chinese consortium won the construction contract, and the plant did not reach full generation until August 2018, a full eight years behind the original schedule and roughly three decades after the concept was first floated by WAPDA in the early 1980s.
What began as a project appraised at a little over one hundred and sixty million dollars eventually grew into a scheme costing close to five billion dollars, a fact confirmed in reporting on the project's construction history and cost escalation.
The Rock Burst That Silenced a Five Billion Dollar Asset
The plant's troubles did not end when it finally started generating power. In 2022 the tail race tunnel cracked and collapsed, forcing a shutdown that lasted more than a year before repairs allowed generation to resume in August 2023. Barely nine months later the plant was in trouble again.
On the first of May 2024 the headrace tunnel suffered a rock burst that severely damaged its structure, and the station has not produced a single unit of electricity since.
Speaking to the Senate Standing Committee on Water Resources this week, WAPDA Chairman Lt Gen retired Muhammad Saeed told lawmakers that repair work is underway and expressed confidence the plant would return to service by March 2028, a timeline reported in detail by The Nation.
He also disclosed that the area had been identified as seismically active during geological studies conducted before construction even began, which raises an uncomfortable question that the country's auditors have already tried to answer. If the risk was known in advance, why did the design not account for it, and why has the same tunnel system failed twice within six years of first generating power.
What Silence in the Mountains Costs the National Grid
Every megawatt that Neelum Jhelum cannot supply has to be replaced somewhere else, and in Pakistan that almost always means burning imported fuel at a much higher cost. Reporting from Business Recorder placed the financial impact of an earlier shutdown at roughly fifty five billion rupees a year, a figure captured in coverage of design flaws identified in the plant following the 2024 rock burst.
With the shutdown now extending years further, the cumulative loss to the national grid and to consumers who still pay a dedicated surcharge on their electricity bills for a plant they cannot draw power from continues to climb.
That surcharge is part of what makes this story sting for ordinary households. Millions of consumers have financed the project for years through their bills, and they continue to do so while the plant sits dark. Wapda's own disclosure that around eighty percent of construction costs have already been recovered through past generation offers little comfort to a household paying today for electricity it cannot receive.
An Official Verdict That Pulls No Punches
The most damning assessment of Neelum Jhelum did not come from critics or opposition politicians. It came from the Auditor General of Pakistan. A performance audit covering the 2022 to 2023 fiscal year concluded that the project failed on almost every objective it was built to achieve.
As reported by Dawn, the audit found that the plant neither delivered its designed energy output nor secured Pakistan's water rights over the Neelum River, and that repeated tunnel failures raised serious doubts about the quality of the original design and construction work.
Perhaps the most consequential failure sits outside the tunnels altogether. Because completion of the project slipped from its original 2010 target all the way to 2018, Pakistan lost a legal race against India's competing Kishanganga project on the same river system.
The International Court of Arbitration ultimately found that India had established priority rights to the water for power generation, a loss detailed by International Water Power. A project meant to secure Pakistan's claim over a shared river ended up losing that very claim because it was built too slowly to matter.
A Wider Pattern of Water and Power Neglect
Lawmakers on the Senate committee used the Neelum Jhelum briefing to raise a much bigger concern. Pakistan has not completed a major dam since Tarbela and Mangla decades ago, while India has built thousands of dams and reservoirs over the same period. That imbalance matters because water storage and power generation are two sides of the same problem in a country facing both chronic electricity shortages and a worsening water security crisis.
A draft Dam Safety Council Bill, prepared with support from the Asian Development Bank, has now been finalised to create a legal framework for overseeing major water infrastructure, a step officials hope will prevent future projects from repeating the mistakes documented at Neelum Jhelum.
What Happens Between Now and 2028
For the next two years the practical reality is straightforward and expensive. Pakistan will continue leaning on thermal generation to cover the gap left by nearly a thousand megawatts of hydropower capacity sitting idle inside a mountain. Consumers will keep paying the Neelum Jhelum surcharge on their bills.
Investigators will continue probing what exactly caused the tunnel failures, and whether design shortcuts, geological miscalculation or construction quality is ultimately to blame. WAPDA has already filed insurance claims worth billions of rupees over losses tied to the earlier tailrace failure, and a similar process is expected to follow the current headrace collapse.
The larger lesson extends well beyond one power station in Azad Kashmir. Pakistan's energy sector has repeatedly shown that building large infrastructure is only half the challenge. Operating it reliably, in geologically difficult terrain, with transparent oversight and contractors held accountable for design failures, is the harder half, and it is the half the country has struggled with most. Until that changes, projects built to solve Pakistan's power crisis risk becoming, for long stretches, part of the reason the crisis persists.
.jpg)
.jpg)
0 Comments