China not interested in including Diamer-Bhasha Dam in CPEC

Ministry will need Rs60 billion annually for six years from PDSP to complete the project; plan to be presented to PM for approval

ISLAMABAD: China has given cold shoulder to the idea of including the $14 billion Diamer-Bhasha dam in China-Pakistan Economic Corridor (CPEC) projects’ list owing to which the Ministry of Water and Power has carved out a plan to construct the dam portion from the national exchequer, a senior official of the ministry told The News.

The official said that some eight months back the Planning Commission had raised the point with Chinese authorities who did not encourage the idea on the plea that the project has a long gestation period and China will get the returns on its investment on the project very late. 

However, CPEC project director Major General Dr Zahir Shah says that the project is still under debate at the joint working group level. However, he admitted that no decision has so far been taken by Chinese authorities on the Planning Commission’s request even after a lapse of over 8 months. 

It is pertinent to mention that Federal Minister for Planning and Development Ahsan Iqbal had told media from both countries on November 17, 2015 at the concluding session of the First CPEC Media Forum that Pakistan had asked China to include Diamer-Bhasha dam in energy projects to be undertaken under the China-Pakistan Economic Corridor (CPEC). 

Since then the no decision has been taken so far at Joint Working group level that has compelled the MoW&P to construct the dam portion of the Diamer-Bhasha project of our own. 

He said the plan that is being fine tuned for putting before Prime Minister Nawaz Sharif for approval. The Ministry will seek Rs60 billion per annum for 6 years from Public Sector Development Program (PSDP) to construct the dam. 

The official privy to the development said if the ministry manages to persuade the top man of the government, then the dam portion will be completed in 6 years time at a cost of $3.7 billion without any interest during construction asit will be financed with PSDP allocation.

“Once the dam is constructed from national kitty, for power houses, investment from various donors will automatically start trickling down,” the official argued. 

At the moment, no donor and international financial institutions (IFIs) are ready to fund the project. World Bank is shying away from extending the credit line because of objection from India. India says that the site of Diamer-Bhasha dam is in the disputed area. World Bank wants Pakistan to first get NoC from India for qualifying for getting the loan for the project.

The Manila based Asian Development Bank (ADB) which was earlier ready to partially finance the project took the new position saying it is ready to fund if World Bank leads the consortium for financing the project.

Faced with the difficulty of finding funds for the 4,500MW project, the government had decided to bifurcate it into dam and power generation projects. 

To a question, the officials said over 90 percent land has been acquired for the dam and the remaining portions will also be acquired within months. However, the resettlement issues are currently being taken care of.

The project is located on Indus River, about 315 km upstream of Tarbela Dam, 165 km downstream of the Northern Area capital Gilgit and 40 km downstream of Chilas. The proposed dam would have a maximum height of 270 m, and impound a reservoir of about 7,500,000 acre feet (9.25×109 m3), with live storage of more than 6,400,000 acre feet (7.89×109 m3). Mean annual discharge of Indus River at the site is 50,000,000 acre feet (6.2×1010 m3). Thus the dam will impound 15% of the annual river flow. 

Agriculture is the backbone of Pakistan’s economy. Pakistan today is among world’s fastest growing population, now estimated at over 200 million. Due to lack of large river regulation capability through sizeable storages, the country is already facing serious shortages of food grains. Given the present trend, Pakistan could soon become one of the food deficit countries in the near future. Therefore, there is a dire need to build storages for augmenting agriculture produce.

Tarbela, Mangla and Chashma reservoirs have already lost about 5,000,000 acre feet (6.2×109 m3) due to sedimentation. It is estimated that by year 2020, this loss would increase to 6,000,000 acre feet (7.4×109 m3), almost equal to the original combined capacity of Mangla and Chashma reservoirs. Due to complete stoppage of any sizable multi-purpose storage development after commissioning of Tarbela Dam in 1976, sustainability of existing irrigated agriculture of Pakistan is in serious jeopardy. The president has taken a very bold initiative by taking the decision to construct Diamer Basha Dam Project.