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Diamer-Bhasha Dam project on the back burner


By Engr Hussain Ahmad Siddiqui

Nothing seems to be moving towards construction of the multi-purpose Diamer-Bhasha Dam project whose foundation stone was laid by President Musharraf in April 2006. The project scheduled for completion as envisaged in the Water Vision 2015, has not made any physical progress.

It is a typical case of tunnel vision, myopic planning and lack of political will on the part of all concerned. For these reasons, the project has run into snags from its very initial stages, though the ECNEC gave the go-ahead for construction of project in November 2008.

There are various milestone activities to be completed before starting work on the construction of the mega project. First, land covering an area of 110 km has to be acquired, which has not been done as yet.

The approval for land acquisition and resettlement of the dam-construction affectees was approved by the ECNEC almost two years back. The government however released an amount of one billion rupees in June this year for the purpose, and that too against the original estimates of Rs60 billion, after the ECC approved, on June 29, 2010, the parameters for compensation and resettlement of the affectees.


Ironically, Wapda project site office in Chilas (Diamer) is not functioning since February as it was ransacked by a mob. Second, necessary infrastructure has yet to be developed. This entails construction of a new bridge at Thakot (Battagram district), upgradation of 323 km of the Karakoram Highway (KKH) and re-alignment of another 100 km of KKH that would be submerged due to impounding of dam reservoir. The strengthening of road communications is essential for transportation of heavy machinery required to be mobilised by the contractor at site to commence construction work.

These works having a financial outlay of Rs4.5 billion, are the responsibility of the National Highway Authority (NHA) that has done nothing physically as yet. The corresponding proforma PC-1 was approved by the ECNEC in August 2009. The only construction to be initiated shortly by Wapda is for the infrastructure development of the project colony in Thore valley (Diamer). The construction works include residences, hospitals, schools, related facilities and services. Bids were received in May 2010 that are under evaluation..

The initial feasibility study was conducted in 1984 by Montreal Engineering Co of Canada. But it was only in 2002 that consultants were appointed for undertaking a detailed project study. NEAC Consultants, a consortium of Pakistani consultants with Binnie and Partners of the UK, completed their final report in August, 2004, confirming techno-economic feasibility of the project. They also carried out engineering design and prepared project tender documents.

Consequently, Wapda invited expression of interest for carrying out detailed design and engineering and review of work done earlier. For reasons of maintaining project parameters of earlier investigations, and of short lead time, it is standard international practice to prefer for the job the consultants who originally carried out the feasibility study and basic designing. This was not done, though NEAC Consultants offer was considered technically and commercially responsive against tenders.

The contract was awarded in July 2005 to Lahmeyer International of Germany, under a joint venture known as Diamer-Bhasha Consultants. They completed project detailed engineering in March 2008 after review of previous data, studies and investigations done by NEAC Consultants. Diamer-Bhasha Consultants suggested slight change of dam site from the originally identified location, reportedly on the intervention of the then federal minister for water and power, who ensured a huge share of the net hydro profit to his province too. According to the revised plan, the two underground powerhouses will be constructed, one under the right bank in the Gilgit-Baltistan and the other under the left bank in Khyber Pakhtunkhwa.

As originally conceived, each power house will have six generating units of 375 MW each, with a total capacity of 2,250 MW. Thus the issue of royalty between the two provinces has also cropped up. Interestingly, the camp of main contractor for the project is to be located in Khyber Pakhtunkhwa. The government somehow ignored the fact that the revised site location is in highly seismic zone. This would result in inflated project cost due to revision of design, providing more business to the consultants.

The consultants have also revised dam height from original 282 meter to 272 meter, resultantly lowering water storage capability of the dam from 7.3 MAF to 6.4 MAF live storage capacity. Terms of reference (TOR) include, inter alia, prequalification of contractors, evaluation of bids and award of contract, separately for five different lots for construction of project. These include dam construction, underground works and structures, hydro-mechanical equipment, power generating equipment and electrical equipment.

Completion of these services by the consultants is not feasible within foreseeable future as project funding is not available. The consultants, working on third extension of their term, would continue to receive fee for an indefinite idle period. All this will add to increase in project cost and raise power tariff, already too high. The tariff calculated is nearly 13 cents per kwh, as the electricity consumers would be required to pay water-use charges in the tariff, according to reports. The proposed tariff is even more than that of thermal power IPPs.

Revised estimated cost of base project is $8.5 billion as approved by the ECNEC on August 20, 2009. Total project cost however, including compensation for resettlement and modifications of KKH, is anticipated to be $11.34 billion on completion. The country having continued resource constraints is unable to proceed with the project without external financial assistance. The government’s request to the World Bank for $5 billion funding for project is pending since October 2007. Asian Development Bank (ADB) has agreed, in principle, in February 2009, to partially finance the project.

ADB’s pre-condition of having national consensus for its funding has been met as the Council of Common Interests (CCI) has approved the project on July 18, 2010. Islamic Development Bank (IDB) is likely to contribute towards project financing. Earlier, the government had asked the Friends of Democratic Pakistan to provide $5 billion but there is no positive response. Only after finalisation of project financing, Wapda has to initiate action for inviting bids for various works and to appoint consultants for design, construction supervision and contract administration.

The project is not likely to be completed by the year 2019-20, given the present status of project-related activities. Strategic importance of Diamer-Bhasha Dam project and its complex and critical characteristics, demand the government to accord top priority to resolving pending related-issues. Likewise, the arrangements for financing from the donor agencies need to be expedited.

Courtesy: The DAWN;


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