LAHORE - The PML-N government has failed to arrange funds for Diamer-Bhasha Dam like its predecessor PPP regime.

The project cost, which has already gone up from $9 billion in 2009 to $14 billion, will further escalate because of this failure.

Relevant officials in the Water and Power sector fear the government would not be able to get fund commitments from the international lending agencies even in the foreseeable future due to active lobbying by India against the mega project.

The neighboring country opposes the project claiming it is being constructed on a disputed land. Pakistan, however, rejects the assertion.

The project will generate 4,500MW electricity on completion. This would be the cheapest electricity produced by any project in the country. Experts also say that this project would increase the life of Tarbela Dam by 35 years. The sources said the government after receiving a cold response from some lenders has now decided to bifurcate the project into two components: civil and electro-mechanical.

“The cost of the project would double after three to four years,” sources said, implying that the government would have to work very efficiently to contain the cost of the dam which will require 10 years for completion.

On the other side, a controversy has surfaced about the land acquisition for the construction of the dam, the only practical step taken so far. Sources say the cost of the land acquisition project for the dam has almost doubled, from Rs33 billion to Rs65 billion.

The Wapda needs19,000 acres in public sector and 18,000 acres in private sector for the construction of the dam.

Since the public sector land would be freely available for the project, the authorities have so far purchased 3,000 acres from private owners.

Sources said the land was acquired during PPP rule at an inflated cost of around Rs3.5million per acre against a market price of less than Rs1.2 million per acre. The present government on one hand initiated inquiry to ascertain whether the previous government had committed corruption, while on the other it approved fresh cost estimate of Rs65billion for acquiring the remaining 15,000 acres of land. It is said the barren land had been acquired at rates meant for urban lands.

The Diamer-Bhasha project is located on Indus River, about 315km upstream of Tarbela Dam, 165km downstream of Gilgit and 40km downstream of Chilas.

The proposed dam would have a maximum height of 270 meter, and impound a reservoir of about 7,500,000 acre feet, with live storage of more than 6,400,000 acre feet. Mean annual discharge of Indus River at the site is 50,000,000 acre feet. Thus, the dam will impound 15 percent of the annual river flow.

The dam project would cover an area of 110km2 and extend 100km upstream of the dam site up to Raikot Bridge on Karakoram Highway (KKH).