Hydropower projects cause loss of $50bn to Indus Delta alone: study

KARACHI: The cost of development is often far greater than the benefits it delivers, and Pakistan’s hydropower projects are a case in point. A recent case study reveals that the construction of Tarbela Dam alone has led to a loss exceeding $50 billion to the Indus Delta, a loss that is growing by around $2 billion annually.

The report, titled ‘True Cost of Hydropower in Pakistan: Case Studies: Cost of Hydropower from Tarbela and Neelum-Jhelum Hydropower’, has been authored by water expert Dr Hassan Abbas. It highlights the estimated cost of producing electricity from hydropower dams like Tarbela is far higher than previously calculated. According to Abbas, “We found that it costs Rs53.61 to produce a unit of electricity at Tarbela and Rs50.55 at Neelum-Jhelum.”

Tarbela Dam, which was completed in 1976 with World Bank funding, was intended primarily for irrigation and power generation. However, the actual costs, including the environmental and social damage that were not considered during its planning, have skyrocketed. The direct cost of the dam is calculated at $15.96 billion, while the financing costs amount to $19.79 billion. When factoring in land losses, the impact on water availability, and the environmental damage, the total cost surges to a staggering $351.91 billion. The loss of land in the Indus Delta alone accounts for $50 billion of this total.

The case study finds that the dam has caused more harm than good to Pakistan’s water resources. In September 2023, the National Electric Power Regulatory Authority (Nepra) set the power generation tariff for Tarbela at Rs4.57 per kilowatt-hour (kWh), a rate that does not account for the environmental, social, and economic externalities associated with large hydropower generation.

The dam’s lack of flood control capabilities is another significant shortcoming. A report by the Water and Power Development Authority (Wapda) in 1994 noted that any flood control provided by the dam was merely “incidental”. Pakistan’s irrigation system uses 104 million acre-feet (MAF) of water annually, and while Tarbela contributes 1.27 MAF during the Rabi season, this is just over one percent of the total irrigation demand. Moreover, the dam deprives the system of 1.90 MAF during the critical Kharif sowing season.

The environmental degradation caused by the dam, particularly in the Indus Delta, has been devastating. The delta, which once thrived with fertile lands and rich ecosystems, is eroding at an alarming rate, displacing thousands of people. Satellite imagery shows that since 1984, the Indus Delta has been losing land at the rate of 96 acres per day. In total, the delta has lost approximately 1.3 million acres, with over 90,000 people migrating from the region due to the loss of land and water flow.

The reduction of silt flow to the Indus Delta, once vital to maintaining its rich ecosystem, is another significant issue. The Indus Delta, in its natural state, would receive over 270 million tonnes of sediment annually. Today, that number has plummeted to just 13 million tonnes due to the silt being trapped in dams and diversion canals. This reduction has disrupted the entire ecosystem of the delta, threatening mangrove forests, fisheries, and other natural resources.

Beyond the environmental degradation, the delta’s historical and economic significance has also been severely impacted. The delta was once home to more than 20 ports that facilitated international trade, along with thriving towns and industries. All of this has been lost. According to Abbas, the potential loss of these ports alone amounts to $20 billion, while the destruction of related infrastructure adds another $5 billion to the total losses. This puts accumulative loss in delta of land lost to the sea, port locations lost, industrial units lost, and urban infrastructure lost at $50 billion in current value.

Local leaders and experts have long warned about the damage caused by these hydropower projects. Gulab Shah, a leader of the Pakistan Fisherfolk Forum from Thatta district, believes the losses are even greater than reported. “The degradation of the Indus Delta began with the construction of dams and barrages long before Pakistan’s creation,” he explained. “This region was once so rich in livestock that desi ghee was exported from here until 1935-40. Today, there is no livestock left.” Shah estimates that over four million acres of land have been lost to sea intrusion in Thatta, Sujawal, and Badin districts, with more than 80 per cent of the population -- around 700,000 people -- forced to migrate to urban areas like Karachi. He criticized the government for continuing to propose new dams and water projects, which are only worsening the situation for the people of the delta.

President of the Sindh Abadgar Board Mehmood Nawaz Shah said that mangroves, essential to the local ecosystem, have also been decimated by the rising sea levels and reduced freshwater flow. These forests serve as nurseries for fish, prawns, crabs and birds, and their loss has further crippled the livelihoods of local fishing communities.

The World Bank’s 2019 report on delta degradation warned that the ongoing environmental damage would cost $2 billion annually, a projection that is quickly becoming a grim reality.“The silt trapped in Tarbela Dam is the lifeline of the Indus Delta. Without it, the entire ecosystem is disturbed,” he said.

Fiza Qureshi, a campaigner at Big Shift Global, in communication with The News, said that the so-called development achieved at the expense of indigenous and marginalised communities -- impacting their livelihoods, health, education, land and the environment -- should not be viewed as development at all. Rather, she characterizes it as a form of aggression. The term “development” carries a positive connotation, yet international financial institutions (IFIs) such as the World Bank have misappropriated it for their own gain.

Reflecting on her visit to Hajamro Creek, Qureshi recounts her conversation with a local farmer Chacha Haji that profoundly impacted her. He shared that he once owned over 100 buffaloes, benefitting from the fertile lands of the Indus Delta. However, due to sea intrusion and the retention of sweet water in dams upstream, both his land and livestock have suffered greatly. As a result, he now struggles to provide even one meal a day for his family.

Qureshi calls on the World Bank to acknowledge its responsibilities. She urges the institution to implement its safeguard and gender policies by compensating the communities of the Indus Delta for the losses they have suffered due to the construction of mega dams, which have purportedly been justified in the name of development.