Money Matters

Dam dreams

By Hussain Ahmad Siddiqui
Mon, 08, 18

In the wake of Supreme Court’s judgment, Water and Power Development Authority (WAPDA) has announced taking measures to start construction of Mohmand Dam during the current financial year. Nonetheless, under the circumstances, the authority is unlikely to achieve the milestone as envisaged.

In the wake of Supreme Court’s judgment, Water and Power Development Authority (WAPDA) has announced taking measures to start construction of Mohmand Dam during the current financial year. Nonetheless, under the circumstances, the authority is unlikely to achieve the milestone as envisaged.

The chunk of land, about 1,000 acres, where the project is to be built, is yet to be acquired. Policy for resettlement and compensation is yet to be formulated as the project is expected to displace a large number of people. The approved PC-1 is under review as the project cost has already escalated to over five times of the original estimates, compared to Rs57.45 billion in year 2000. Provisionally, Executive Committee of the National Economic Council (ECNEC) has approved the project in April 2018 costing Rs309.558 billion. The concept paper for arrangement of financing, local and foreign exchange, including suppliers’ credit was presented by WAPDA to the government on March 10, 2017, but there has been no positive response so far.

Tenders for the main contract were opened in June this year for the construction of civil works, and design, supply, installation, and commissioning of electrical and mechanical works and hydraulic steel structures for the project. Currently, the technical, financial, and commercial evaluation of the bids received from short-listed consortia of international and Pakistani companies is being undertaken. The project is scheduled for completion, realistically, somewhere in year 2024.

The construction of multipurpose Mohmand Dam project could have commenced, and the project completed, many years ago, had the past governments been serious in developing additional water reservoirs and contributing to hydropower generation in the country. Looking at the historical background of the dam, previously known as Munda Dam, the criminal negligence on the part of the ‘powers that be’ has deprived the nation of economic development in the region for so long, besides adding to the manifold increase in cost of the project.

Preliminary Feasibility Report on the project was conducted by WAPDA as early as in 1969. No further work was however undertaken on the project until 1992 when National Engineering Services Pakistan (NESPAK) was entrusted to prepare Pre-Feasibility Study Report. Based on these studies, the Japanese consultants Nippon Koei and Nippon Giken carried out a detailed report involving geological and hydrological investigations and environmental and social assessments of the project. The bankable report, prepared under the sponsorship of Japan International Cooperation Agency (JICA), was completed in March 2000. It recommended the concrete-face rock-fill (CFRF) dam with 1.293 million acre-foot (MAF) gross and 0.676 MAF live water storage capacity and a powerhouse of 740 megawatt (4X185 MW) installed capacity.

International donor agencies and financial institutions were willing to finance the project, which was part of WAPDA’s Vision 2025 launched in July 2001. Also, the Friends of Democratic Pakistan (FODP) had agreed to provide $500 million for the project under flood management program. Alas, the government did not go for the implementation of the project in public sector as planned and envisaged. Instead, it was decided in 2003 to invite private sector investment under Power Policy 2002 in the then one-billion dollar project on ‘build, own, operate and transfer’ (BOOT) basis that could have been the first mega water and power project in private sector.

Consequently, a Letter of Interest (LOI) was issued to a consortium led by AMZO Corporation, USA in May 2004 for developing the project. According to the terms of the LOI, the sponsors were to prepare a revised feasibility study, which was completed and approved by the Private Power and Infrastructure Board (PPIB) in October 2006.

Based on this study, which basically had the same parameters for the dam and powerhouse as the original JICA study, the project was to be completed in seven years i.e. during 2013-14. The project however ran into snags due to a host of factors including resistance of the local population to the construction of the dam and the prevalent law and order situation in the area. In fact, the sponsors had lacked the basic capacity and capability, both technical and financial, to develop the mega project.

Later in 2008, the government asked the WAPDA to take over and develop the project. Again, for long there was no progress due to bureaucratic and procedural bottlenecks. It was only in 2011 that WAPDA appointed a joint venture of foreign and Pakistani consultants consisting of SMEC (Australia), Nippon Koei (Japan) and NESPAK-ACE-EGC-BAK (Pakistan) for detailed engineering design and preparation of tender documents. The consultancy services were to be completed in two years but took more than four years as the work was suspended by the consultants in 2014 due to non-payment of their dues by the government.

Mohmand Dam hydroelectric project is of great national importance. On completion, it will provide numerous benefits. It will regulate water supply to irrigate 16,737 acres of land and control flood downstream, with flood discharge capacity 684,750 cusecs. It will thus protect Nowshera and Charsadda districts from seasonal floods by storing peak flood water, up to 0.243MAF, during high flow season. In addition, it will supply 460 cusecs drinking water for Peshawar and Mohmand districts. Powerhouse of installed capacity, now optimised at 800MW, will generate about 2.86 billion units of electricity annually.

It is to be connected to 500/220 kV transmission system at Peshawar at an additional cost of $22 million. JICA consultants had worked out generation cost 10 cents/ unit, which will now be recalculated at a higher rate.

Mohmand Dam is to be located on Swat River, 5 kilometers above the existing Munda Headworks. Swat River is a tributary of the Kabul River, which is a part of the Indus River Basin. Recently, Afghanistan has constructed over a dozen multipurpose dams of cumulative storage capacity 4.7MAF on Kabul River and its tributaries that would result in reduced water flow to Pakistan in near future. Pakistan had shown concerns to the Afghanistan government on this issue in September 2016 but to no avail. It is therefore imperative for Pakistan to conclude an agreement on priority between the two countries for water sharing of common rivers.

The writer is former chairman of State Engineering Corporation Pakistan