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Diamer-Bhasha dam

Finally, the commencement of much-awaited Bhasha dam has been formally announced. Prime Minister Imran Khan last Monday ordered immediate commencement of work on construction of Diamer-Bhasha dam, rightly describing water security as the foremost priority of his government.

In the first phase, this dam will meet country’s needs for its agriculture growth and in second phase will give birth to a power house to generate 4,500MW of hydropower.

The 6.4 million acres feet (MAF) water storage capacity of the dam will reduce the current water shortage in the country of 12 MAF to 6.1 MAF. It will add 35 years to the life of Tarbela dam by reducing sedimentation. An area of 1.23 million acres of land will be brought under cultivation through the construction of this dam.

As reported, all issues related to the dam, including settlement, a detailed roadmap for mobilisation of financial resources, etc., had been resolved and the project is ready to be launched on ground.

Bhasha dam, by all accounts, is a major undertaking and stands out among the lists of major hydropower projects around the globe.

The decision to move ahead with phase-1 of the project is a wise move. Majority of the project can be financed in PKR with a lot of local procurement of services and material.

Also, this land mark project in Gilgit-Baltistan (G-B) is of great political and regional security significance. The add-on of power generation at a later stage may make it comparatively easier for the government to seek foreign funding from donors, who at present are not inclined to finance projects located in G-B.

The history of dams and hydropower in Pakistan is strongly characterised by local and regional politics, vested interests, lack of vision, indifference and ineffectiveness of the successive governments since the 1970s.

The construction of Tarbela and Mangla dams and power houses in the 1960s was a game-changer for the economy of Pakistan. It ushered in an era of remarkable industrial growth and availability of water for our agriculture. After this, the hydro sector remained out of government focus.

It was later in early 2000 (during the tenure of President Musharraf) that the importance of hydro energy was somewhat recognised. During this period, Wapda came up with a master plan titled ‘Vision 2020’ which envisaged setting up of a chain of dams and hydropower plants by capitalising on the water resources of all the mighty rivers of the country. The plan promised dams and hydropower generation of around 20,000MW by the year 2020.

But the ‘Vision 2020’ could not invoke the desired motivation of the then government and its merits were side-lined. The government of the day however opted to follow the trend of the past governments of PPP and PML-N and continued with the policy of going for oil-based IPPs with a difference that hydropower generation was also opened up to private sector.

What followed thereafter by the governments of PPP and PMLN was unleashing of all sorts of thermal oil-based IPPs, including scandal-riddled rental IPPs. Lately, LNG and coal-based IPPs were added to the power generation list.

Private investors’ interest in hydropower remained low for reasons that it carried risks and only long-term benefits as against thermal IPPs which carried little or no risk to the investors and promised a guaranteed return of 17 percent on investment.

Today, the outcome of the cumulative wrong decision of the all governments has brought the nation to a stage where IPPs threaten the economic sovereignty of the nation.

One can imagine the destiny of the nation if the then governments would have owned and adopted Wapda’s ‘Vision 2020’. Today, the nation would have been blessed with availability of affordable power and water security for generations to come with a much cleaner environment.

Hydro energy once again gained strength with the roll-out of CPEC projects and its focus on development of energy and infrastructure projects in Pakistan. The Chinese government and its entrepreneurs in the field, with deep pockets and long-term political and business horizon, showed interest in mega hydropower generation.

Presently, there are a number of mega hydro projects of 5,000MW power generation capacity are under different stages of execution by the Chinese turnkey contractors as lead contractors with local supporting contractors funded by China under project loans dedicated to the Chinese contractors.

Today, the installed hydro power generation capacity is around 5,000MW. It will increase to 10,000MW after the under-execution hydro projects come on the grid in the next five years or so. The cherished goal of 20,000MW of hydropower will therefore not be achieved before 2030 although it could have been achieved in 2020.

Bhasha dam in the public sector once again brings under sharper focus the role of Wapda and its ability to perform tasks. The key performance indicators are works completion date or dates and costs. Both are interdependent. Timeline overruns means cost overruns. Implementation is always a weak point in the public sector. For example, Neelum-Jehlum, a run-of-the-river hydropower project undertaken by Wapda, encountered tremendous timeline and cost overruns, causing a severe dent on project’s feasibility.

Hopefully, Bhasha dam’s implementation will be smooth without any timeline or cost overruns. Its successful and timely completion will sure help Wapda to restore its impressive image.

FARHAT ALI, "Diamer-Bhasha dam," Business Recorder. 2020-05-16.
Keywords: Economics , Political science , Bhasha dam , Water security , Tarbela Dam , Financial resources , Hydro power projects , Land mark , Mangla dams , Hydro energy , PML-N , PPP , LNG

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