The Diamer-Bhasha dam has been planned for years but due to many constraints it could not be started, now the government approves to start construction of Diamer-Bhasha dam on a priority basis, the government has given the go-ahead to construct Bhasha dam with an initial cost of Rs.625 billion. The financial resources for the development would be arranged locally as the international lenders and China hesitated to invest in building the dam, Express Tribune reported.
According to Ministry of Planning and development, the Central Development Working Party (CDWP) has provided clearance to start the Diamer-Bhasha dam project by the Executive Committee of National Economic Council (ECNEC).
Besides the dam project, CDWP also approved to build Mohmand Dam Hydropower project, this project has an allocated budget of Rs.303 billion, however, the project will get final approval from ECNEC before it can be started.
These are the key projects that are really important to sort out two major challenges in Pakistan, power generation, and water shortage. The projects built at the cost of Rs.928 billion would help Pakistan to meet its energy and water demands. The hydropower project is expected to generate around 800 megawatts of electricity.
Currently, Diamer-Bhasha dam is only useful for saving water and not the power generation, the electricity power plant would cost additional Rs744 billion which is not being considered at the moment. However, when the power generation setup is completed on Bhasha dam it would reach the total cost of Rs.1.4 trillion.
The capital provided for this project would be taken from the country’s budget as well as from Water and Power Development Authority (WAPDA). WAPDA would organize commercial funding for this project according to Sartaj Aziz.
The revised water policy demands an increased allocation of budget for constructing the dam, the planning commission has proposed the budget increase which can easily be provided by the government and associated departments. In order to build the dam nearly Rs.48 billion per year would be required.
The Federal government will provide Rs370.2 billion from the budget which makes it 57% of the total investment. Similarly, WAPDA would raise funding to provide more than Rs.115.9 billion from various sources including equity, Rs.163.3 billion would be raised by commercial loans according to the project documentation.
The Diamer-Bhasha dam has a scheduled date to complete within five years, Rs.138 billion has been reserved for land acquisition and resettlement, the major part of this has been already achieved. The concerned authorities have already spent over Rs58.3 billion to purchase land in that area and Rs.53.5 billion for resettlement.