Govt decides to not invest in 4500 MW Bhasha dam 'until issues resolved'

[Naveed Yaseen]

Diamer-Bhasha dam project: no more investment until issues resolved
MUSHTAQ GHUMMAN
ISLAMABAD (October 01 2009): The government has decided not to invest in the multi-billion-dollar 4500 MW Diamer Bhasha Dam until critical issues including boundary dispute between NWFP and Northern Areas (NA) are settled, official sources told Business Recorder. The designed installed capacity of the dam was 4500 MW with average annual energy generation of 18,097 GWh.

Gross water storage capacity of the reservoir would have been 7.3 million acre-feet (MAF). The project was proposed to be implemented through special purpose vehicle. Public Sector Development Program funds amounting to Rs 128 billion were required for land acquisition and re-settlement alone.

The project was expected to pay back its cost in a period of 8 years. A state-of-the-art Micro Seismic Monitoring System has been installed at the site to monitor seismic activities in the project area. The project envisaged construction of a 'Roller-Compacted Concrete' (RCC) gravity dam on Indus River, about 40 km downstream of Chilas.

Sources said that at a recent meeting of the Executive Committee of the National Economic Council (Ecnec), Finance Minister Shaukat Tarin stated that the foreign exchange component (FEC) of the project must be firmed up with reference to projected exchange rate.

In response to concerns about siltation in the dams, it was explained that feasibility study on desiltation was in progress, and was expected to be completed in six months. According to sources, Water and Power Development Authority (Wapda) high-ups were of the view that extensive forestation was a durable remedy for siltation. Sources said that Finance Minister said why Wapda was seeking money for the project, as some of the critical issues were to be resolved.

"Ecnec decided that expenditure on the project would be made subject to settlement of boundary dispute between Northern Areas and NWFP; amicable and timely resettlement of displaced population; and claim regarding net hydel profit," sources added.

The Ecnec approved the project at a cost of Rs 894,247 million, including FEC of Rs 312,943 million, subject to the condition that a committee will determine utilisation pattern of increased water storage capacity after carrying out hydrology study of the impact of increased storage in Diamer Bhasha as well as Tarbela and Chashma and increased generation at Ghazi Brotha.

The report of the committee will be submitted to the Ecnec. According to sources, the Ministry of Water and Power will move a resolution in the National Assembly for clearance of the Diamer-Bhasha Dam as was agreed with Asian Development Bank (ADB). However, the project is not moving as per expectations because foreign consultants are shy to work despite foolproof security arrangements.

The government has earmarked Rs 4 billion in the 2009-10 budget for the 4,500 megawatts Diamer-Bhasha dam project. Sources said that the Ministry of Water and Power has been instructed by the Prime Minister to submit a draft resolution on Diamer-Bhasha Dam to Cabinet Division for clearance by the Cabinet before move in the National Assembly.

According to official documents, hydraulic model studies were completed, and PC-1 of land acquisition and resettlement of Rs 60 billion was approved by the Executive Committee of the National Economic Council (Ecnec) on November 6, 2008. PC-1 for construction of the project was submitted to the Ministry of Water and Power for approval on January 1, 2009. Excavation of chambers for rock overcering test in adit 4 and 5 has been completed.

According to sources, Diamer Bhasha Consultants (DBS) are responsible for review of feasibility studies, detailed engineering design, and tender documents and PC-1 of the project. DBC has completed scheduled date of March 4, 2008. First extension of time for completion of follow-up activities was awarded from March 4, 2008 to June 30, 2008 as addendum No 1, without any additional cost.

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