Hydropower: Dasu dam expected to be cleared

CDWP to recommend project to ECNEC for approval.

ISLAMABAD:

The government is set to clear the 4,600 megawatt (MW) Dasu hydropower project at an estimated cost of Rs735.6 billion amid growing concerns of meeting foreign funding requirements, which have been assessed at $3.5 billion (Rs383 billion).

The Central Development Working Party (CDWP) is expected to clear the Dasu hydropower project today for final approval of the Executive Committee of National Economic Council (Ecnec). Headed by Planning and Development Minister Ahsan Iqbal, the CDWP has the mandate to approve up to Rs1 billion worth of projects, and recommend them for the approval by Ecnec.

The CDWP will take up 10 projects with an estimated cost of Rs961 billion. Dasu is one of the two mega projects that the PML-N government has promised to give to the energy-starved nation.

The other is the Diamer Basha dam, which many believe has been put on the back burner due to opposition by the international lenders.



Out of the foreign exchange component requirements estimated at $3.5 billion (Rs383.3 billion), the assured foreign funding is only $700 million, or just 20% of the total, to be provided by  the World Bank.

Due to lack of funding, work on the Diamer Basha dam could not be started despite the fact that the dam’s ground breaking ceremony was performed twice, first by former president Pervez Musharraf and then by former prime minister Syed Yousaf Raza Gilani.

The Economic Affairs Division will brief the CDWP about funding arrangements and the decision is expected to be taken in light of funding promises, said Asif Sheikh, spokesman of the Ministry of Planning and Development.

Approval for the Dasu hydropower project will be treated as a step away from the $14 billion Diamer Bhasha dam, as the country cannot afford to build two mega dams with an estimated cost of $21 billion at the same time.

However, Finance Minister Ishaq Dar had claimed that the government would construct Diamer Basha dam by using its indigenous sources. He said that the government would initially build the dam for storage purposes only.

The site for the Dasu power project is 74 kilometers (km) downstream of the Diamer Bhasha dam and 350 km from Islamabad. The feasibility study and detailed engineering designs of the project have already been completed.

The present government has planned to start work on power projects of up to 22,000MW of capacity to increase the present generation capacity to 36,000MW in the next five years. These include nuclear power plants, which will be constructed with financial assistance from China, according to the Prime Minister.

As demand remains far more than generation, the country is passing through a severe energy crisis, facing up to eight hours of load shedding.

The CDWP will also take up the coal-fired 1200MW Jamshoro power project again, having an estimated cost of Rs197 billion. The CDWP had earlier constituted a committee to reduce the cost of the project and exclude the cost of procurement of rail engines and bogies for coal transportation from sea port to the project site.

Iqbal had then directed that instead of setting up its own arrangement the Ministry of Water and Power should sign an agreement with Pakistan Railways for transportation services.

However, the committee has kept the procurement plan as part of the project and recommended to meet the cost from the contingency pool of the project, said Sheikh. He said the CDWP will take a final decision whether to procure engines and bogies. The Asian Development Bank has already approved $900 million loan for the project despite opposition by the United States.

Published in The Express Tribune, January 16^th, 2014.

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