Diamer Bhasha dam cost up from Rs479bn to Rs1,400bn

ISLAMABAD: The cost and time overrun in the much-awaited Diamer Bhasha dam has witnessed an unprecedented hike, as the cost for construction of water storage peaked at Rs1,400 billion from an initial estimate of Rs479 billion.

If the cost of electricity generation is also included, it would be estimated at close to Rs2400bn. Now the government has instructed the authorities concerned to come up with revised cost of constructing water storage of Bhasha dam and divide the water storage and electricity generation into two parts. It was also instructed that the fund raising on account of climate finance and Multilateral Development Banks (MDBs) could also be explored to raise dollars financing for the much-needed project.

The minister said the dam was a crucial project for Pakistan’s water and food security and must be completed expeditiously in the national interest. He said that until 2018, the estimated construction cost of Diamer Bhasha Dam was Rs479 billion, and Rs120 billion had already been spent on land acquisition. However, due to delays and unnecessary postponements during the previous government, the cost of the project had increased significantly. He said that in 2020, construction was hastily started without proper financing, which further compounded the problems.

The minister said during the tenure of the previous (PTI) government, the cost of the project was estimated at Rs600 billion and even Rs750 billion in various meetings of the standing committees, while on paper, an estimate of Rs480 billion was being shown till date. Ahsan Iqbal maintained that the responsibility for increase in the project cost lied with the previous incompetent government, and due to lack of funding and delays, the cost had now increased from Rs479bn to Rs1400bn. Ahsan Iqbal regretted that even today, a complete financing plan for the project was not available. He suggested that the dam and power projects be separated and the financing of the power project be obtained from private sector.

He said that even after six years, the revised PC-1 of the project had not been prepared.

He said in future, projects would be completed under the Public-Private Partnership to avoid delays in funding and completion. The Diamer Bhasha Dam would provide a storage of 6.4 million acre-feet of water, which is important for the country’s agriculture and industry.