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| March 31, 2007 | Saturday | Rabi-ul-Awwal 11, 1428 |
Diamer-Bhasha dam to cost $8.5bn now
ISLAMABAD, March 30: The estimated cost of the Diamer-Bhasha dam has increased by 31 per cent to $8.5 billion and the provinces of Sindh and the NWFP have voiced serious reservations over the proposed construction of Akhori dam.
The doubts were voiced during a meeting held under Minister for Water and Power Liaquat Ali Jatoi on Friday to review the increase in Diamer-Bhasha dam’s cost projections. The meeting was also updated on Akhori dam and a proposal to import of 1000 megawatts of electricity from Iran. Secretary and adviser Water and Power, chairman and members of Wapda, and senior officials of the ministry and Wapda attended the meeting
A senior official of the water and power ministry said that the cost of Diamer-Bhasha dam had increased by $700 million because of the proposed redesigning to counter seismic risks. Another 18-22 per cent cost increase would take the total estimated project cost to $8.5 billion, he said, quoting new Wapda figures that were presented in the meeting.
He said the project’s original estimated cost was $6.7 billion in 2004 under the feasibility report. Taking an average annual cost escalation of six per cent, the project’s total cost would be $8.5 billion by December 2008 when it would be offered for tendering. The minister for water and power Liaqat Ali Jatoi who presided over the meeting, however, asked the Wapda authorities to come up with item-wise details of the cost increase, because a different case had been submitted to the World Bank and the Asian Development Bank for financing to justify expansion in the project portfolio. He also asked the Wapda to submit a report on engineering design and comparative cost estimate for further review.
Some officials questioned the cost increase, saying that the prices of construction material, like cement and sand and fuel had gone down in the recent months and the only item that had become expensive was steel and iron that had little role in dam construction. They feared that the final project cost might cross $10 billion by 2016, including the cost of interest on loans.
Wapda officials informed the meeting that Wapda had circulated the feasibility study of the Akhori dam.
The meeting was also informed that Sindh and the NWFP voiced serious reservations about the project and the contents of the feasibility study and implementation strategy of the dam. Wapda said that it had already given its response in writing and re-circulated the feasibility report.
The minister told the Wadpa authorities that objections, counter-objections and correspondence would not resolve the issue, instead interaction was needed to create harmony and understanding among the federating units. He directed Wapda and the water and power ministry to negotiate with the two provinces to settle the issue. They were asked to submit a report in 15 days so that work on the dam’s engineering design could begin as soon as possible.
The meeting decided to set up an exclusive environmental assessment and resettlement cell for the Bhasha dam project, including an independent expert and a senior officer concerned from Wapda. The meeting was informed that pace of work was on schedule and the infrastructure design activity was proceeding satisfactorily.
The meeting was given a detailed presentation on importing 1000MW of electricity from Iran ahead of a visit of an official delegation to Tehran on April 6. The meeting was informed that 39MW of electricity was already being imported from Iran in Balochistan’s coastal areas.
An agreement for the import of 1,000MW power from Iran had already been signed for delivery to commence in 2009.
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