Diamer Basha Dam project faces cost overruns amidst ongoing delays

September 16, 2024 (MLN): The Diamer Basha Dam, a crucial project for Pakistan's water and food security, is facing significant cost overruns due to delays and unnecessary postponements, Federal Minister for Planning Ahsan Iqbal stated during a review meeting on the project.

He disclosed that until 2018, the estimated construction cost of the Diamer Basha Dam was Rs479 billion, and Rs120bn had already been spent on land acquisition.

However, due to delays and unnecessary postponements during the previous government, the cost of the project has increased significantly.

He said that in 2020, construction was hastily started without proper financing, which further compounded the problems.

The Planning Minister said that during the tenure of the previous government, the cost of the project was estimated at Rs600bn and even Rs750bn in various meetings of the standing committees, while on paper, an estimate of Rs480bn was being shown till date.

Ahsan Iqbal maintained that the responsibility for the increase in the project cost lies with the previous incompetent government, and due to lack of funding and delays, the cost has now increased from Rs479bn to Rs1,400bn.

Expressing regret, Ahsan Iqbal said that even today, a complete financing plan for the project is not available.

He suggested that the dam and power projects be separated and the financing of the power project be obtained from private sector.

He further said that even after six years, the revised PC-1 of the project has not been prepared.

"I had proposed in a standing committee meeting during the previous tenure that work on a project whose PC-1 is more than two years old should not be started," he remarked.

On this occasion, he also said that in the future, projects will be completed under the Public-Private Partnership to avoid delays in funding and completion.

The Diamer Basha Dam will provide storage of 6.4 million acre-feet of water, which is important for the country's agriculture and industry.

During the meeting, Ahsan Iqbal emphasized that engineering and hydrology students from Pakistani universities should be involved in the construction of the dam so that they can benefit from this national project.

Furthermore, the Federal Minister directed all relevant departments to prioritize the completion of the Diamer Basha Dam project and avoid further delays to ensure Pakistan's water and food security.

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