ISLAMABAD: Pakistan’s Auditor General has reported that the Neelum-Jhelum Hydropower Company has incurred losses exceeding Rs29.41 billion, highlighting persistent operational and financial challenges facing one of the country’s largest hydroelectric projects.

According to the audit report, prolonged shutdowns of the power house have caused the project an estimated Rs99.17 billion in losses, while investigations into the repeated collapses of the headrace and tailrace tunnels have yet to be completed.

The report states that the company’s financial performance has been deteriorating since the 2022–23 fiscal year, largely due to recurring technical failures that have significantly disrupted electricity generation.

It noted that electricity production remained completely suspended from July 2022 to August 2023 after the collapse of the tailrace tunnel, depriving the national grid of the project’s generating capacity and contributing to substantial financial losses.

The audit further revealed that following the collapse of the headrace tunnel, the power house has remained closed since May 1, 2024.

According to the report, the repeated tunnel failures have not only halted power generation but also led to significant additional expenditures on repair and rehabilitation work, placing further financial strain on the project.

The Auditor General also observed that the project has been facing financial difficulties because the National Electric Power Regulatory Authority (NEPRA) has not approved the project’s reference tariff, limiting its financial sustainability.

In addition, the report noted that the company was unable to obtain insurance claims to compensate for the losses resulting from the tunnel collapses and related damage, further increasing the project’s financial burden.

The audit recommended that the pending investigations into the repeated tunnel failures be completed without further delay to identify responsibility and help prevent similar incidents in the future.

It also called for urgent measures to restore the power house to operational status so that electricity generation can resume and additional financial losses can be minimized.

The Neelum-Jhelum Hydropower Project, one of Pakistan’s major renewable energy projects, has faced a series of technical setbacks in recent years despite its strategic importance in enhancing the country’s electricity supply. The latest audit findings underscore the need for timely technical, financial, and administrative interventions to restore the project’s performance and safeguard public investment.