August 2007 News

Diamer-Basha dam cost may swell to over $10 billion

10 August 2007
The News International

Islamabad: The cost of Diamer-Bhasha dam, which is an RCC (roller compacted concrete) project, has already increased by 31 percent from $6.4 billion to $8.5 billion and is most likely to further increase to $10 billion by 2016 because of the cost of interest on the loans to be achieved for the said dam, a senior government official told The News. He said that apart from Diamer-Bhasha dam, there is absolute zero progress on the other dams such Akhori, Kurrum Tangi, Munda. However, the initiation of the work is linked with the consensus among the provinces and to this effect, no campaign has been started yet. President General Pervez Musharraf had announced to build the five said dams on January 17, 2006 by 2016 but the materialization of this dream seems impossible by the deadline as there is absolute zero progress on the other dams such Akhori, Kurrum Tangi, Munda. The Ministry of Water and Power headed by Federal Minister Liaquat Ali Jatoi seems unmoved since long and it did not become vibrant on this particular issue of paramount importance even after the change of secretary of water and power. The sources said that the estimated cost of the Bhasha Dam was $6.7 billion in the feasibility report prepared in 2004 and now it has increased by 31 per cent to $8.5 billion and the final project cost might cross $10 billion by 2016, including the cost of interest on loans according to official of water and power ministry. Another serious challenge being faced by Ministry is seismic vulnerability of Bhasha dam site, he said adding that Diamer-Bhahsa dam will have the storage capacity of 6.34 MAF with power generation capacity of 4,500 MW of electricity. The cost has been increased because of the revision of seismic design, the displacement of axis by one kilometre required for the foundation of the dam and strengthening of the weathered rock of the dam. The revision of the seismic design of the project keeping in view the earthquake fault line will be completed by April-May next year. Wapda in its recent communication has jolted the Ministry of Water and Power with shocking news of increase in the cost of the project to $8.6 billion which is likely to further go up by $10 billion. In January 2006, the rock at the site of Basha Dam was found fractured and weathered when a short tunnel of 300 meters was excavated. The rock is also being strengthened after excavating more tunnels for knowing the chemistry of the rock. According to an official the government has enforced Section 4 on the site of Diamer-Bhasha Dam, to initiate the process of acquiring the land required for construction of the said reservoir. The enforcement of Section 4 is mandatory prior to acquisition of the land for the dam. The government under Section 4 has banned the sale and purchase of the land needed for the dam. The ban on sale and purchase of the land to be used for the dam has been implement both in Northern Areas and NWFP. The official said the revenue departments of Northern Areas and NWFP have been given directions to this effect. He said after ban on purchase and sale of the land through the imposing of section 4, the price of the land would be worked out under certain formula and the government would pay the price to the owner of the land accordingly. The official said the huge amount of Rs27.824 billion is required for the acquisition of land and resettlement of the people affected due to construction of Diamer-Bhasha Dam. Under the proposed project, Rs10.76 billion will be spent for acquisition of agriculture-barren land, orchids and nurseries and Rs1.638 billion to be utilised for properties & infrastructure, Rs8.8 billion for establishment of nine model villages, Rs62.119 million for pay & allowances for administrative arrangements and Rs17.7 million for contingent administrative expenses. The project also includes the escalation cost of Rs2.234 billion at the rate of 6 per cent per year for 5 years and interest of Rs4.309 billion during the implementation at the rate of 9 per cent. As far as Akhori Dam is concerned, the official said that the case of Akhori Dam project is not very much different from Bhasha and Kalabagh Dam, as the construction work could not start on this very vital project since Ministry of water and Power has failed erase the objections of the NWFP and Sindh province over the said dam.

 

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