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Diamer-Bhasha dam sukuk proposed

Updated October 12, 2018

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PEC Chairman Engineer Jawed Salim Qureshi. ─ Photo courtesy Twitter
PEC Chairman Engineer Jawed Salim Qureshi. ─ Photo courtesy Twitter

ISLAMABAD: The Pakistan Engineering Council (PEC) on Thursday asked the government to launch ‘Diamer-Bhasha Dam (DBD) public limited company’ and float its shares in the market for public subscription to generate funds for the mega project.

PEC is a professional body and statutory federal institution for accreditation of engineering education and regulation of engineering profession in Pakistan.

Addressing a news conference, PEC Chairman Engineer Jawed Salim Qureshi said the donations for the dam fund must be used as seed money for the Diamer-Bhasha company. “These shares may be issued on the pattern of sukuk (Islamic bonds),” he said.

He claimed the dam component cost – which was been estimated close to Rs500 billion – could be reduced by about Rs200bn.

He said funds should be raised from market by offering about two US cents in estimated per unit cost of energy and distributed among shareholders in the form of dividends for up to 10 years.

“The designated funds will receive a rainfall of billions of rupees if we are able to wisely design the financing structure which could then be rolled over to other projects,” he said.

“The Diamer-Bhasha dam is a very attractive project estimated to recover its investment before 10 years to shareholders while its 50 year life would be a net profit to the state as a normal project,” he stressed.

He said the government had already offered about 8.25 per cent return on sukuk in the international market and hence ‘Diamer-Bhasha Sukuk’ could also be offered to Pakistanis.

He opined that the dam company should have experts from engineering, finance and information technology sectors on the board of directors

He said the power project on the dam was being eagerly awaited by traditional investors and lending institutions because of its huge 4,500MW capacity. Responding to a question, he said studies have found DBD as seismically risk free project despite some earlier reservations. “DBD is a lifeline for Pakistan because it entailed a cascading 30,000MW power projects and reservoirs in the downstream,” he said.

The DBD was approved in 2008 and should have been completed in 10 years but it was sad that groundwork was yet to be started, he noted.

He urged the government to give representation to professional engineers in policy making as most of the development projects were concerned with engineering.

He said the PEC was available to offer technical expertise feasibility study for five million affordable houses as per the agenda of the present government.

Published in Dawn, October 12th, 2018