Ministry of Water and Power is considering as many as four proposals for arranging funds for the construction of Diamer-Basha Dam with an estimated cost $14 billion and a generation capacity of 4,500MW, it is learnt. According to sources, high officials of Ministry of Water and Power and Ministry of Planning, Development and Reforms have discussed four proposals at a meeting held on Tuesday (April 4) at P-Block of the secretariat.
Proposal one suggests establishment of 'Diamer-Basha Dam Development Company' that would include shareholdings by multinational companies and Ministry of Water and Power. For this purpose, the Ministry would need to approach multinational companies and convince them to become a partner in the project. Proposal two supports the launch of Diamer-Basha Dam project through Independent Power Producers (IPPs).
Proposal three suggests floating Sukuk bonds to generate funds for the hydro power project. And the fourth proposal is to again approach multilateral agencies like World Band (WB) and Asian Development Bank (ADB) to procure loans for the construction of Diamer-Basha Dam. Efforts to rope in the World Bank as a co-lender failed two years ago when the government declined to seek NoC from India for the project. The Asian Development Bank also declined to commit funds for the project and called for governance reforms to encourage private investment.
The ADB had advised the government to adopt a professional approach towards the construction of the dam that simply cannot be funded by a single institution, country or group given its mammoth financial requirements and the risks involved. The government has engaged USAID to undertake a feasibility study and is seeking investment from the US to develop it as an independent power project (IPP).
Former Finance Minister Senator Saleem Mandviwalla while talking to Business Recorder said the government should first hire experts, advisors and consultants to prepare a plan and options for the construction of Diamer-Basha Dam, and adopt modern procedures which are being used world wide to launch such projects. Mandviwalla further said bureaucrats and the concerned ministries were unable to provide suitable options for the construction of a mega project like Diamer-Basha Dam. Economist Dr Ashfaque Hasan Khan said funds were available with the government for such important projects but its priorities were not correct. The government has funds for Islamabad Lahore Metrobus and Lahore Orange train but not for an important water reservoir project. "Water storage capacity of Tarbela and Mangla dams has declined due to accumulation of silt. Water storage is an issue of our very survivor," he added.