Diamer-Bhasha Dam & CPEC


Naveed Aman Khan

Pakistan has decided to construct different dams in northern areas to meet the need of water and power. Diamer-Bhasha dam project has caught a lucky break recently with the Chinese deciding to include it in China-Pakistan Economic Corridor. Undoubtedly the project has had bumpy journey so far but its construction is imperative from both a power generation as well as water storage perspective. When fully completed, the dam will generate 4500 MW of electricity and can hold 8.1 million acre-feet of water which includes 6.4 million acre feet of live storage. Recall that the first inauguration took place back in 2011 but was soon put on hold due to financing issues. The major donor agencies including the World Bank and Asian Development Bank (ADB) had earlier bowed out when it came to financing the project. Having been denied of financing in 2011 by World Bank and Asian Development Bank, the Diamer-Bhasha dam has risen back to prominence upon inclusion in the China-Pakistan Economic Corridor (CPEC), which ensures Chinese financing despite cost escalation due to delay. For Pakistan, the dam would prove to be an economic and strategic miracle generating 4500MW of electricity and holding 8.1 million acre feet of water.

The World Bank cited Pakistan’s inability to procure a no-objection certificate from India on the project due to supposedly being part of disputed territory while the Asian Development Bank chose to hold off until other investors also provided financing for the mega project. So inclusion in China Pakistan Economic Corridor might entail some funding flowing from the bank as well. To add to the woes, the prolonged delay in project implementation has already resulted in enormous cost escalation. The land acquisition for the project has been undertaken at exorbitant rates due to delay and the total project cost has crossed $14 billion. That too, if it is started on a war footing, as further delay will increase the cost even further.

The government has already decided to divide the construction of the mega project in three phases which is land acquisition, construction of the dam and lastly construction of the power house. Land acquisition has been completed to a large extent but the remainder of the project still requires massive investment.

Even though China had earlier passed the ball on Bhasha, preferring instead to invest in coal power plants where Internal Rates of Return’s hover north of 19 percent, the renewed interest comes at a crucial time for Pakistan with a lack of multilateral donor support.

According to a USAID economic evaluation of the project in 2014, Diamer-Bhasha dam is an excellent investment under various climate scenarios, yielding benefit cost ratio of 3.6 to 4.1 and Internal Rates of Return in the range of 12 to 15 percent and cites a payback of eight years for the project. Therefore, it offers a decent payback as well making it economically feasible for the Chinese to invest. Chinese involvement will be beneficial for project implementation as well given the vast experience the nation holds in constructing mega hydel projects. This includes the momentous Three-Gorges Dam, the largest in the world. China is also involved in construction of Dassu Dam with the Chinese Gezhouba Group Co Limited (CGGC) selected as the contractor for the main works.

After election 2018 in recent days terrorist attacks on schools have jolted Pakistan. It is a matter of extraordinary concern for both Pakistan and China. China is actively involved in different projects of development in the Diamer region. Most of these development projects are part of the CPEC. These recent terrorist attacks are a clear message to both Pakistan and China to stop development work in the region. Pakistan in the past has faced severe level of terrorism in the country but very bravely fought and got control over it. Operations Radd-ul-Fasaad and Zarb-e-Azb successfully crushed terrorists in the country. Pakistan needs more to do and focus on intelligence network to combat this situation. China too is not worried of this situation. Both Pakistan and China have decided to counter terrorism to safeguard multi-billion dollars prestigious gigantic project of China-Pakistan Economic Corridor.  One can say with certainty that the culprits involved in these terrorist attacks will be taken to task.

Pakistan and China have decided to safeguard game changer China-Pakistan Economic Corridor project and   combat terrorism in the region with the help of satellite systems. On one hand with the completion of Diamer-Bhasha Dam power shortfall will be addressed successfully and on the other hand water will be properly regulated and supplied to the fields for irrigation.

Anti-Pakistan, anti-peace, anti-development and anti-stability elements have once again come out of their hideouts to sabotage writ of the State. All the components of the State of Pakistan are well aware of the sensitivity of security and law and order matters. Armed Forces and security agencies of the country are very successfully and vigilantly taking up the security of the people and government installations. Government of Pakistan will never bear such heinous attempts of terrorism in any part of the country. Our Chinese brothers and sisters working on CPEC are blessed with very strong nerves and will. Chinese government is determined to complete all the development projects by all means without any fear. Government of Pakistan has immediately decided to beef up security of Chinese personnel engaged in the accomplishment of China-Pakistan Economic Corridor project to maintain momentum of development in the country comfortably.


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