Islamabad -  Rejecting a Chinese proposal to carry out a fresh feasibility study of Diamer-Bhasha Dam, the government has decided to construct the hydro project’s reservoir from its own resources.

Briefing Pakistan People’s Party (PPP) parliamentarians from Sindh here on Tuesday, Water Resource Secretary Shumail Khawaja said that the Cabinet Committee on Energy has already approved a plan to finance the project with a spending of Rs80 billion under the Public Sector Development Programme (PSDP).

The PPP parliamentarians Yusuf Talpur, Abdul Sattar Bajani, Azra Fazal and Shazia Murree were briefed by Minister for Water Resources Javed Shah, the secretary Water Resources, Joint Secretary Water Resources Mehr Ali Shah, IRSA chairman and other officials. The PPP parliamentarians were briefed on the Diamer-Bhasha dam, IRSA Act etc. The parliamentarians also raised several issues including the appointment of the federal member IRSA from Sindh, Sindh share in water and IRSA’s three tiers policy for water-sharing.

Shumail Khawaja said that they had approached China for bringing Diamer-Bhasha dam under China-Pakistan Economic Corridor but China raised several issues including the location of the dam in a ‘controversial area’ and a fresh feasibility study of the project etc.

The parliamentarians were told that the feasibility study of the dam was conducted five years ago but China later proposed to carry out a fresh feasibility study in three years but was unacceptable.

The 6th meeting of the Joint Cooperation Committee (JCC) had agreed to establish a mechanism to develop hydroelectric power projects along the northern side of the Indus River including the Diamer-Bhasha project, according to minutes of the deliberations.

Now, Pakistan has only one option for funding the dam and that is financing through the PSDP allocations. The government has decided to divide the dam into two parts — the reservoir and the powerhouse — and the former will be funded from the PSDP.

Khwaja said that as per the plan, Rs80 billion will be allocated for the dam annually. WAPDA will contribute 20 percent of the allocation, 15 percent will be arranged from the private financial institutions while the remaining will be contributed through the PSDP. The reservoir part will be completed in 10 years, he said.

He said that even now the project could be added to the CPEC umbrella projects but it will require a fresh feasibility study and will cost Rs9 billion. Besides this, it is time-consuming, he added.

In 2021-22, the government will start arranging commercial financing for the powerhouse, the secretary Water Resource said. 

The parliamentarians also showed concern over the three-tier policy for water distribution and said that it was not part of the IRSA accord. The parliamentarians asked IRSA to provide the Law Division’s comments on the three-tier policy and details of allocation of water to Kacchi canal at the next meeting.