ISLAMABAD: The government has so far completed only 20 per cent resettlement for construction of $14 billion Diamer-Bhasha Dam despite disbursement of about Rs88 billion funds for the project.
The government has already divided the multi-purpose project into two major components - the Rs650bn worth of dam project to be constructed with the public sector funds and Rs750bn worth of power project most probably to be developed in independent power producer (IPP) mode at a later stage.
At a recent meeting, the Water and Power Development Authority (Wapda) told the federal government 20pc resettlement had been completed while 80pc was still outstanding.
About 7pc work on relocation of Karakoram Highway (KKH) had so far been completed against an outstanding work of 93pc. The meeting was also informed that 31,695 acres had been acquired after payment of Rs58.27bn while another 5,724 acres would be acquired in due course at a cost of Rs6.6bn.
The total cost of land acquisition and resettlement has been worked out at Rs125bn.
The Core Project Development (the dam structure) would need about Rs268.5bn and would start on completion of procedural requirements including tendering for reservoir & hydraulic structure, dam and appurtenant structures, spillway, flushing outlets, diversion systems and right and left bank waterways.
Informed sources said even though foreign funding for the Rs650bn main dam was not available, the project offered very attractive internal economic return (IERR) of 15.7pc even at 12pc discount rate.
The dam project is designed to serve as the main storage dam of the country besides Mangla and Tarbela and its storage would be helpful for alleviating flood losses. The unit cost analysis of the project had been carried out on the basis of 6.4 million acre feet (MAF) water storage capacity of the reservoir.
The annual recurrent cost of the project has been calculated considering the amortisation of the project at the rate of 10.65 for 20 years and levelised for 30 years and taking operation and maintenance cost of Rs5.82bn. As such the annual recurring cost worked out at Rs53bn.
The government is expected to allocate about Rs37bn for the project during the next fiscal year followed by equal funding over the next two years ie until 2020-21. The project is expected to be completed by June 2027.
Under the financing strategy, about Rs370bn or (57pc) would be provided by the federal government through public sector development programme (PSDP) while Wapda would provide Rs116bn (18pc) as its equity while remaining 25pc (Rs163.3bn) would be provided by the federal government as commercial financing from banks.
The project is estimated to help alleviate acute irrigation shortage in the Indus basin irrigation system cause by progressive siltation of existing reservoirs besides substantially contributing to reduce intensity, quantum and duration of floods and reduce magnitude and frequency of floods in the Indus River downstream.
The project will also tickle down effects on all sectors of the economy by accelerating development and creation of job opportunities besides improving availability of water and clean energy.
The authorities said the completion of dam would increase the country’s storage capacity from 30 to 48 days and make power generation facilities an attractive future investment by the private sector to add 4,500 megawatts of additional electricity to national grid.
Published in Dawn, March 24th, 2018