Like the fixation with the Kalabagh dam, which the leaders of perennially water hungry Punjab province have, the fixation of Islamabad with the Diamer –Bhasha Dam refuses to wither away. For the ANP and other political groupings of North-west Frontier Agency, (NWFA), now called Khyber-Pakhtunkhawa, Kalabagh is nothing short of a conspiracy of the powerful Punjab lobbies which has been dominating the Pakistan scene, and, therefore, they are deadest against the venture despite its hydel power potential.
The Bhasha dam is facing opposition not from political leaders but from global financing agencies, who see it as unviable. Environmentalists are also opposed since the region where it is proposed to be constructed is a fragile Himalayan belt. After tossing it around unsuccessfully, the Pakistan government has now decided to market the project as its largest-ever venture for private sector financing. The road show will be kicked off with a dedicated ‘Business Opportunity Conference’ in Washington over the next week or so. It would be a ‘Sell Pakistan’ initiative, offering a great business opportunity to global investors, Khaleeq Kiani reported in Dawn today.
Diamer-Bhasha dam is estimated to cost $14 bn. It is planned on the Indus River, about 165 km downstream of Gilgit. Pakistan officials appear to bank on what they consider as the strengths of the dam. When built, it will give 8.1m acre feet water storage and generate 4,500 MW of power. It will yield $2.216bn in revenue per annum, repaying its cost in just eight years, according to Zafar Mehmood, who heads the country’s water and power development authority.
Wapda has very little to show by way of its plus, and is, in fact, mired in controversies. Its track record either in power generation or water resource management has very little to crow about. But Mehmood is harping on the fact Bhasha dam is planned almost thirty years after Mangla and Tarbela dams were built. Bhasha will stabilise the irrigation potential of Tarbela, as it is coming up 315 km upstream, and therefore extend its life by another 35 years. But what about displacement of people by Bhasha?
Wapda estimates that 30,000 people would be affected. About 1500 acres (6.1 sq km) of farm land will be submerged. Another 25,000 acres (100 sq km) will go under the reservoir. There are no concrete relief and rehabilitation schemes as yet.
Already the affected families have been staging protests, complaining that no compensation has been paid for their lands acquired for the purpose of Bhasha dam. There has been a talk of settling the dam ousted in three villages and develop them as model villages. It is still a talk. No progress on ground.
According to Dawn, the Sharif government is looking at eighty percent of the project cost as loans. The balance twenty percent will be its contribution towards the cost of acquisition of land and providing an enabling environment.
To make the project cost-effective, Islamabad will offer an attractive package which is essentially duty exemptions and tax rebates during the construction phase. There will be a complete income tax holiday for the first five years of operation. To be executed by a special purpose vehicle (SPV), the project offers about 17pc return on equity through an estimated levelised 30-year tariff at 7.57 US cents per unit. This is cheap when compared with per-unit tariffs for coal based generation (Rs 8.76 per unit), wind (Rs13.20) and solar energy (Rs16.31)
The Sharif government has set for itself ambitious targets- financial closure by June 2015, and completion by June 2024. If this bid succeeds, three more projects are proposed to be put on the block. These are the $11.5bn Bunji hydropower project (completion in December 2024), the $1.8bn Pattan hydropower project (completion in June 2022), and the $8bn Thakot project (planned for completion in June 2023.
While the blue prints read well, and may gel well with the market pundits, it is doubtful whether any private lender will like to try his luck in a country, which is politically unstable and economically bankrupt, and has become the epicentre of terrorism. More so after the World Bank and the IMF as also the all-weather friend China are unwilling to back roll the project.
Two other factors will weigh with the investors flocking to the planned Business Opportunity Conference in Washington. One, of course, is the objections raised by India as the upper ripparian state. Second the acute water scarcity across Pakistan. The per capita water availability per year in Pakistan, is 1007 cubic metre at present. It is estimated to drop to 999 cubic metre in another year. By the year 2037, when the Bhasha Dam is expected to be commissioned, per capita water availability will touch 711 cubic metres, which would be far less than the per capita water availability in several in African countries.
– By Ram Singh Kalchuri
