Recent announcement of an unprecedented escalation in the cost of constructing Diamer-Basha Dam highlights a recurring problem that plagues development projects across Pakistan — Pernicious effect of delays on project costs. Originally estimated at Rs479b, cost for constructing the water storage component of the dam has surged to Rs1, 400b. When including the costs of electricity generation, the total projection nears a staggering Rs2, 400b.
This dramatic rise in cost is not an isolated incident. It serves as yet another example in a long history of projects within our country that have suffered from significant budget overruns due to delays. From infrastructure projects to public utilities, pattern remains the same. Initial estimates are quickly overshadowed due to escalating expenses as projects falter or stall. The Diamer-Basha Dam is no exception, and while its cost overruns may not be surprising to public, they are a sobering reminder of the need for timely execution and robust management. The Diamer-Basha Dam, a vital project for our water and food security, is intended to alleviate country’s water shortages and bolster agricultural productivity. With a capacity to store 6.4 million acre-feet of water, its completion is critical for supporting our agriculture and industry. The delay in its execution has not only increased costs but also postponed benefits that such a project promises.
It is imperative that we address hurdles that have impeded progress on this crucial project. Government’s recent instructions to break down the costs into water storage and electricity generation components and explore alternative funding sources such as climate finance and Multilateral Development Banks (MDBs) are steps in the right direction. However, these measures alone may not suffice if underlying systemic issues are not addressed. One key aspect of avoiding such delays is development of a robust mechanism to ensure timely completion of projects. Establishing clear timelines, stringent monitoring systems and accountability measures can mitigate the risks associated with cost overruns. Additionally, public-private partnerships (PPPs) can offer a viable solution to funding challenges. By leveraging private sector expertise and investment, we can improve efficiency and foster innovation in project execution.
