ISLAMABAD, Feb 9 (APP): President Pervez Musharraf Saturday launched the Rs 130 billion (US 2.16 billion) Neelum-Jhelum Hydroelectric project aimed at producing 969 MW power and helping the country meet its increasing energy requirements. The President terming it a very important project said it will have "far reaching strategic implications" and added that it will be completed with the Chinese assistance in eight years.

He described it as yet another symbol of the Pak-China friendship and said it will contribute towards the economic progress of the country.

Under the project water from the Neelum river will be diverted through a 47 km long tunnel. A power house will be constructed at Chattar Kalas, 22 km south of Muzaffarabad and the water will be released in river Jhelum. The project will produce 5.15 billion units of electricity annually.

President Musharraf said the ongoing power shortage in the country need to be addressed swiftly.  He said the country has immense coal reserves at Thar and described these as one of the largest in the world, that could be utilised to generate electricity. He pointed that China was meeting 70 per cent of its energy needs through coal.

He said work was on at the Thar Coal but said it was a long-term project and will take some time to complete.

He said in 2001 the country had 4000 MW power in excess, but with the booming economy and rapid industrialisation things changed rapidly and today the country was facing a shortage of both electricity and gas.

The President said there have been some lapse in this regard, as there should have been more focus on rapid generation of power to cater to the growing demand.

"It is regrettable that nothing had been done to generate hydropower in the past 30 years," the President said.

He said at least feasibility for other projects should have been prepared, while controversial debate on the Kalabagh dam was going on. The President pointed that now work has begun on the Diamer Basha Dam and after completion, it will help the country meet its energy demand.

The President said currently there was a need for generating energy to meet the short term requirements and said the recent discoveries of gas in NWFP and Sindh will help produce thermal energy.

He said under the short term planning 2000 MW of electricity will be produced by the end of this year, while another 3500 MW will be generated by the end of next year.

The President particularly thanked the Chinese government for its assistance and said several other projects; like the expansion of the Karakoram Highway will further strengthen the bonds between the two countries.

Earlier the President unveiled a plaque, marking the launch of the project.

Chinese Ambassador to Pakistan Luo Zhaohui said his government has always cherished its ties with the people of Pakistan and were working on several projects to strengthen their economic bonds.

He expressed optimism that the Sino-Pak ties will further strengthen in the days ahead and said the Chinese investors were fully confident of investing in Pakistan. He said the Neelum-Jhelum Hydroelectric project was the largest in Pakistan and hoped that security would be ensured for its workers.

Caretaker Minister for Water and Power Tariq Majeed said several projects were underway to meet the country's power needs. He also mentioned details of the Vision 2016 that includes construction of five dams, aimed at generating 20,000 MW of power. He said the Thar coal will also be utilised to produce 3000 MW of electricity.

He said the project will produce low cost energy, reduce dependence on thermal generation and reduce greenhouse emissions.