Diamer Basha Dam: Release of Rs 26 billion per annum from PSDP enough to start civil work

Release of Rs 26 billion per annum out of Public Sector Development Project (PSDP) Fund would be enough to initiate civil work for Diamer Basha Dam construction, said sources. According to the financial strategy of the dam as finalised by the Water and Power Development Authority (WAPDA) and shared with the ministry, WAPDA would require Rs 474 billion (approved) for dam part and another Rs 505 billion (estimated) for power generation part of the project which would be initiated two years after the commencement of civil work on the dam part.
The sources confided to this correspondent that the Authority would not release $14 billion in one go as generally believed by the public. Instead, the federal government can easily allocated Rs 26 billion per annum out of PSDP to kick start the construction work on Diamer Basha Dam and appurtenant structure by the middle of 2019. The construction period of the project is eight years and five months which has been bifurcated in two parts - dam part and power generation facilities in order to arrange funds.
The sources said that the government has to provide Rs 232 billion for the dam part out of which Rs 100 billion have already been released for resettlement and land acquisition. Meanwhile, WAPDA will contribute Rs 98 billion and remaining Rs 144 billion will be arranged through commercial financing.
So far as the arrangement of estimated Rs 505 billion for power generation part of the dam is concerned, the sources said that share of WAPDA equity would be Rs 76 billion, followed by Rs 111 billion through financing from local commercial banks, Rs 96 billion through syndicate loan/bond and remaining Rs 223 billion through export credit agencies.
At present, the procurement of consultants is under process. Also, as many as five joint ventures (JVs) have submitted prequalification applications for the construction of main dam and appurtenant structures, which are under evaluation.
The Diamer Basha Dam is proposed to be constructed on River Indus, 40km downstream of Chilas town. The dam site is located in Gilgit-Baltistan and Khyber Pakhtunkhwa, 315km upstream of Tarbela Dam.
The project has three main objectives, included flood mitigation through effective water regulation, provision of water for agriculture through water storage in the reservoir and generation of low cost hydel electricity.
The gross water storage capacity of Diamer Basha Dam is 8.1 million acre feet (MAF) with a live water storage capacity of 6.4 MAF. Total generation capacity of the dam is 4500 megawatt with 12 generating units, each with 375 megawatt capacity.
The project will contribute more than 18 billion units (kilowatt hours) to the national grid annually. The annual benefits of the project have been estimated at Rs 200 billion and the project will pay back its cost in eight years.
On completion, the Diamer Basha Dam will help supplement generation capacities of the hydel power stations, located in downstream areas. Resultantly, about 2.5 billion units additional electricity will be added to the system. Also, the life of Tarbela Dam will increase to another 35 years after completion of Diamer Basha Dam due to reduced flow of sediments.