A seemingly cost-effective hydroelectric project on the Jhelum River seemed promising, but unfortunately turned out to be one of the most expensive misadventures in Pakistan’s history. What started off as a bold attempt to fix the power deficit in the country turned into one of the most notorious cases of poor project planning with respect to design flaws, mismanagement, construction delays, and cost overrun.
From a project management perspective, there was a severe lack of planning (including technical) and control, throughout the entire length of the project. These shortcomings resulted in very costly inefficiencies and a clear loss of time as well as money. These activities could have greatly improved the overall performance had there been more effective control, visibility and an approach that is more structured, focused and less careless. The lack of specific objectives and an adequate plan coupled with disorganised implementation brought the project to its knees.
The Neelum Jhelum project came to a halt in 2002, leading to PKR 6 Billion in repair costs and PKR 37 Billion in energy losses. A cost estimate of around PKR 15.3 Billion was made in 1989 when the idea was conceived. However, by the time of completion, a mammoth amount of PKR 500 Billion was spent on this project. The difference in cost resulted from poor planning of project design, terrain conditions, and mismanagement. The main cause of the delay in the completion of the project was its design which included the construction of underground tunnels to divert the flow of water from Neelum River to the power plant. It turned out that the construction of these tunnels significantly increased the cost of the project due to the rocky and uneven terrain. The complex water diversion system required innovative engineering to prevent water loss and maintain power generation. The project originally scheduled to be completed in 2016 was delayed by 2 years due to design flaws and the impact of cost overrun was borne by the national exchequer.
The Neelum Jhelum project came to a halt in 2002, leading to PKR 6 Billion in repair costs and PKR 37 Billion in energy losses
This important national project got delayed due to poor coordination among contractors, lack of risk assessment, and ongoing technical issues. In July 2022, the Tail Race Tunnel of the dam cracked, collapsed, and blocked resulting in power plant closure for 20 months. Although the power generation was resumed in August 2023, it cost the national exchequer about PKR 6 Billion during the repairs, maintenance, and testing phase and an additional loss of PKR 37 Billion in energy losses. The project once again came to a halt in May 2024, as a result of a fault in the Read Race Tunnel. It is estimated that the repairs would cost around PKR 23 Billion and the unavailability of the power plant to the national grid would cost this nation a direct annual loss of PKR 55 Billion approx.
Neelum Jhelum project is a textbook example of the consequences of poor planning and management of mega projects. This project has taught us great lessons on the need for proper project management in future infrastructure projects for fruitful results. When project teams don’t account for all technical and environmental challenges, costs go up, timelines stretch and results are opposite to the expectations. One of the biggest issues in this project was the lack of strategy to manage the diverse group of stakeholders which inevitably resulted in delays.
Project Management is a vast field and is practiced worldwide based on proper management techniques in coordination with teams, addressing risks at an early stage and timely addressing the concerns that arise on each of the projects to minimise the time, cost, and risk factors. A proper management vision would have significantly helped Neelum Jhelum avoid most of its issues. Had there been a thorough analysis of terrain and project requirements, the time and cost overrun could have been mitigated. The outstanding constraints in the execution and completion of the project could have been avoided if early risk management techniques had been adopted.
To track progress and mitigate the risks associated to a project, the Project Management tools like Critical Path Method (CPM) and Earned Value Management (EVM) can be applied. These tools help improve the detection of problems ahead of time, thus preventing potential time and cost overruns. Moreover, clear communication and effective stakeholder management is the key to avoid failures in a project.
In developing countries, another major issue that usually fails many large-scale projects is corruption. Poor planning and mismanagement are offshoots of corruption. Poor planning and ineffective management turned what could have been a solution, into a burden on national resources. Project failures can be avoided by ensuring transparency and enforcing strict accountability.
The Neelum Jhelum Hydroelectric Project is a rich example of how the most promising projects can be ruined due to bad planning, poor risk management, and lack of teamwork. What was supposed to solve Pakistan’s power crisis turned into a costly and ongoing failure. Was there enough oversight, or did they fail to see the challenges from the beginning? To stop this from happening again, we need to focus on better project management, assess risks early, and demand openness. Without these, how can we ever hope to make meaningful strides in future infrastructure projects?