ISLAMABAD, Dec 2: Prime Minister Shaukat Aziz said on Saturday work on the Mangla Dam raising would be completed by December 2007, which would give additional capacity of 2. 9 million acre feet (MAF) water and 644 Giga watt hour additional annual power generation.

He was presiding over a meeting here to review progress of the project. Minister for Water and Power Liaqat Ali Jatoi give a detailed briefing to the prime minister about physical progress on each aspect of the project.Mr Aziz emphasised the need for timely payment of compensation to people affected by the project.

He directed authorities concerned to take necessary measures to ensure that alternative land was handed over to the affected people.

The prime minister was informed that the project would cost Rs62 billion and its economic rate of return was 18 per cent with more than Rs10 billion annual returns.

He was told that Rs26 billion would be paid to the affected people as compensation. He was told that the process of payment of compensation and land allotment would be completed by mid 2007.

The meeting was informed that work on a new city and four small towns being built as part of the project was in progress and the new localities would have modern infrastructure and all facilities of life.

The project would also generate employment opportunities and give a fillip to socio-economic activities in the area.

It would entail displacement of about 44,000 people from periphery of the reservoir, the meeting was told.

The project aims at reducing sediment load flowing into the Mangla reservoir by improved methods of land use and implementation of watershed management practices in the catchment area above the dam.