HYDRAULICS AND IRRIGATION ENGINEERING 05/23/2018

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Ghazi Barotha Hydropower Project:

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 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).
5.
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 EVALUATION OF DESIGN AND IMPLEMENTATION
 Relevance of Design and Formulation
 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
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.
 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.
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

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of the barrage pond commenced in February 2003, and the maximum level was reached on
20 May 2003.
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.
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); head ponds (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.
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 150 km of lines that loop in and out
of the existing 500 kV lines between Tarbela and Gatti [lot2], 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

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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 never the less pleased to note that all components of the Project, as conceived
at appraisal, had been successfully implemented, meeting the intended objectives.
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

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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.
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.
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.
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.

OVERALL ASSESSMENT AND RECOMMENDATIONS

Overall Assessment
The Project is considered successful, based on a review of its relevance, efficacy,
efficiency, and sustainability, and impact on institutional development. Appendix 15

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includes the quantitative assessment of project performance according to ADB's criteria
for determining project rating.

Lessons Learned
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 increase
their disbursements in June 1997, to assist in covering WAPDA’s shortage of funds. Th
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.
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
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

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established for regular meetings among financers. Coordination among financers was done
informally.

Recommendations

a. Financial Control
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
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 than maintenance is being undertaken correctly.
Covenants
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.
Further Action or Follow-Up

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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.