Another year, another approval for the stuck in limbo Diamer-Bhasha Dam. But this time around Pakistan’s rapidly deteriorating water profile has caught the attention of policymakers. According to the United Nations Development Program (UNDP), the country’s per capita water availability has plunged from 2,172 cubic meters in the nineties to 1,306 cubic meters per inhabitant in 2015.

Yet, except for the Mangla and Tarbela dams, no major reservoir has been erected since the 1970’s. The 4500MW Diamer-Bhasha dam is a crucial project in terms of providing renewable hydel energy as well as storage of water for irrigation purposes and flood control. The dam is projected to hold 8.1 million acre-feet of water which will include 6.4 million acre feet of live storage.

Financing for the project has proved to be difficult with most international donors including the World Bank and Asia Development Bank backing out. The reluctance stemmed primarily because of India’s erroneous stance of placing Diamer-Bhasha in disputed territory which has shooed multi-lateral’s away. Pakistan’s all weather friend China also made an offer that wasn’t in the best interests of the country.

The federal government had then decided to come up with Rs370 billion grant from the budget while the remainder will be divided into equity financing from Wapda and commercial borrowing. However, it should be noted that the Ministry of Planning, Development and Reforms has rationalised the PC-I of the project recently to remove the land acquisition component which has been covered in a separate PC-I.
Resultantly, the portion from budget now stands at Rs232 billion whereas Wapda equity and commercial financing will be Rs98 billion and Rs144 billion respectively. But even though some optimism has been restored on the financing front, other hurdles have included the delayed land acquisition as well as resettlement of affected communities.

The government has only been able to reportedly resettle only 20 percent of the displaced communities and the pace has been lacklustre.

There is also a need to compensate for riparian populations which are situated down-stream from the dam but this has also been subject to lengthy delays when it comes to execution.

Now that the financing requirement have been sorted out to a large extent, the need of the hour is to settle these preliminary matters and then move to civil works phase on the reservoir.

Even if the dam is started this year, it will be completed in five years at an ideal pace. But if history has been any indicator, most mega-projects in Pakistan have faced considerable implementation delays which have almost always resulted in massive cost over-runs.