Construction of Diamer-Bhasha dam

A formal go-ahead for the construction of the Diamer-Bhasha dam, given by the government of Pakistan on 18th July, 2010, could only be termed a highly positive development for the country. The significance of this news is really monumental when realised that it is very rare for the federal, and all the provincial governments, to whole-heartedly agree on a project, without some kind of objection from some quarter or a stakeholder.
The decision was reached at the Council of Common Interest (CCI), which met under the chairmanship of Prime Minister Syed Yousuf Raza Gilani and passed a unanimous resolution approving the construction of the dam. The members of the CCI were informed that the dam, to be completed in 2019, would have a storage capacity of 6.4 million acre-feet of water and would produce 4,500 megawatts of electricity. Another encouraging aspect was that the project was likely to pay back its cost within eight years after its completion. Following the approval of the project, the Prime Minister reiterated that "the resolution to approve the Diamer-Bhasha dam strongly reflects a national consensus and would send a positive signal across for the future progress and prosperity of the country".
The prime minister is indeed more than right on this particular issue. The Kalabagh dam issue had generated so much ill-will among the provinces and left the international community confused for such a long time that all the stakeholders were feeling a little piqued by this controversy and now, highly pessimistic about the prospects of the big energy projects in the country. The Bhasha dam project had already been launched, but the progress on its execution was slow. A formal approval by the CCI, on a unanimous basis, would give a clear and strong message to the international community that it is a purely non-controversial project.
According to certain sources, the World Bank had asked the government to get approval of the project, from the parliament, as a precondition for receiving $11.34 billion for the project. With such a solid and strong statement by the CCI in favour of the Bhasha project, the donors will probably have no such reservations, or if the demand still persists, it would be much easier for the government to get the required nod from the parliament. Domestic stakeholders could also now breathe a lot easier. Anyhow, from now onwards and especially after the 18th Amendment, the CCI seems to be destined to play a more effective and visible role in resolving issues and setting priorities for the economic management of the country.
There is hardly any doubt about the highly positive impact of the Diamer-Bhasha dam project on the energy-starved economy of Pakistan. No need to repeat that energy shortages, in the past few years, have severely constrained the country's ability to grow. During 2009-10 alone, the cumulative effect of the energy crisis on the economy was estimated at an upward of 2 percent of the GDP. The side effects of such missed opportunities were also apparent in higher unemployment and growing lawlessness in the country. Besides, the timely completion of the Bhasha project could relieve a great deal of stress on the external sector of the economy and provide a measure of relief to energy consumers.
Recently, lower availability of hydel resources for generation, and a higher than normal shortage of gas, skewed the "fuel mix" of electricity generation towards oil. And since this occurred at a time of a doubling of international oil prices, the effect on the cost structure of the utilities was amplified greatly and the oil import bill of the country rose substantially. Higher electricity generation, from hydel resources, would change the situation for the better. However, while appreciating the latest decision on Bhasha, there are certain factors, which should always be kept in view. Firstly, Bhasha is a long-gestation project, which means that the government has to continue with its efforts to design and implement short-term, viable energy projects.
Secondly, Bhasha would only partly bridge the gap between the supply and demand of electricity and, therefore, there should not be any sense of complacency about designing other long-term energy plans after the approval of this particular project. Many more small and big projects would be needed to satisfy the growing needs of the economy. And lastly, the unanimous resolution on the project does not mean that there would not be differences during the various stages of its implementation, which has to continue up to 2019. The federal government must be prepared to address such troubling issues without politicising the project. Fortunately, the CCI is now powerful enough to resolve differences of opinion, if any, at the earliest, in order to ensure the completion of the project by the stipulated date.