Diamer-Bhasha Dam cost surges by Rs570bn, NA told

ISLAMABAD: The Ministry of Water presented the details of the total cost of Diamer-Bhasha Dam in the National Assembly on Monday during the question hour and according to which the total cost of the dam had escalated to Rs1,049 billion compared to the approved cost of Rs479 billion.

The House was also informed that the Diamer-Bhasha Dam construction of has been delayed by a period of 22-months as the dam would be completed by December 2032. The details were presented during the question hour in a written reply to a question of Agha Rafiullah.

The reasons for Rs570 billion increase in the cost of Diamer-Basha Dam were also given i.e. dollar exchange rate was Rs105.3 when PC-1 was approved in 2018 and now it was Rs278.3, having an impact of Rs178 billion; the parity in contract MW-1 Award and the difference of Award with respect to PC-1 cost, and its impact was Rs133 billion; design change due to providing increased safety against seismic hazard required by the latest ICOLD guidelines introduced in 2018/ international panel of experts advices for revision of diversion scheme/ climate change induced Glacial Lake Outburst Floods (GLOF) event, and its impact was Rs85 billion; no provision of Interest During Construction (IDC) in approved PC-1 but due to likelihood of securing foreign loan, the IDC has been made part of the revised PC-1 prepared by Wapda, which is under the approved process and its impact was 7.5 percent per annum, 82 billion approximately; additional security measures impact was Rs17 billion approximately; procurement of helicopter as an additional scope owed to ensure safe transportation of foreign expatriates staff working on the project, and its impact was Rs9 billion; addition of new scope of Safe City owed to peculiar security situation that caused an impact of Rs7 billion.

Giving the reasons for delays, the House was told that according to the project implementation schedule provided in the PC-I, the construction of the dam was envisaged to be completed in February 2029.

However, based on the current physical progress it had been estimated that the construction of the dam would be completed by December 2030. It was, however, clarified that contractual liability of the contractor vis-a-vis employer and vice versa i.e. defect liability and clearance of financial obligations would continue until December 2032.

In view of above, it can be stated that the construction of the dam has been delayed by a period of twenty-two (22) months. It was stated in the written reply that it was important to explain that the reason for the delay is due to host of factors which encountered in tandem. Therefore, any one of those could not be separated from the other to ascertain accurate delay in construction associated with any singular factor.

However, certain delays could be quantified in terms of days due to which the pace of work remained slow compared to the planned schedule. The major factors for the delay were stated as relocation of Karakoram Highway which was completed by National Highway Authority (NHA) in April 2022 as against its scheduled completion in August 2020; hence a delay of 20 months. This delay hindered in initiation of execution of left and right abutment works and dam pit as well as diversion tunnels. Hindrance of mobilising the workforce in night shift due to non-availability of security arrangements. This situation prevailed from commencement of works in August 2020 to October 2022; translated into a delay impact of 26 months. Revision in design of contractor’s proposed river diversion scheme in light of expert advisory rendered by the international panel of experts. This revision caused a delay of around 12 months.

The other factors which hampered the pace of progress include: Covid-19, deferred financing due to limited fiscal space in PSDP, restriction on forex releases and logistics hindrance due to floods.