Export Credit

Diamer-Bhasha Dam cost swells to $11.5 billion

PakTribune
March 2, 2009

“The project cost that includes complete work to make the project operative is $11.50 billion against the last estimate of $8.5 billion just six months ago,” official sources in the Ministry of Water and Power said.

Apart from the prerequisite activities, the practical work on the main reservoir (lake), located on the Indus River 300-km upstream Tarbela has yet to be started though the government had planned to start ground work from 2009.

Giving a break-up of the recent calculations, the sources said the cost of lake, turbines, powerhouses and other technical requirements stood at almost $8 billion, while $3.5 billion were to be spent on resettlements, road building and diversions, etc.

The government and the Water and Power Development Authority (Wapda) would collectively contribute $1 billion, whereas the rest of the amount would be managed from external sources.

The World Bank and the International Monetary Fund (IMF) have pulled back their support from the project and they will have no stakes in it, as funds are to be arranged through the Asian Development Bank, the Islamic Bank and others.

The dam, a Roller Compacted Concrete (RCC) reservoir, would have the irrigation water storage capacity of 6.4 million acre feet (maf), with two powerhouses of 12 units (375 MW each). The government would have to discharge debt responsibility of $3.5 billion after the project is completed, whereas the rest of the amount would be paid back under agreed terms and conditions with the parties involved in its building.

A detailed engineering design and environmental study of the project had been completed and at present, the executing agency and the government are short-listing four bidders out of 11 qualified through the bidding process.

The project, in terms of power generation and irrigation water, will start earning $2.2 billion every year from the day it is completed as an interest of $3.7 billion will be payable in a period spanning over 7-15 years.

On all this, Wapda Chairman Shakeel Durrani said managing funds for the lucrative projects, like the Diamer-Bhasha Dam, were neither a problem nor any hurdle existed in its smooth construction after the short-listing of the bidders.

As far as the total cost of the project was concerned, it stood at $11.5 billion — $8 billion on water reservoir, turbines, power-houses and transmission and $3.5 billion for extra expenditures such as road diversions, resettlement, etc, he added. The work on resettlement, roads and such smaller projects, he said, had been underway and practical work on the major water storage lake would be started shortly after bidders were finalised.

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