Boundary row over Diamer-Bhasha Dam: Wapda proposes splitting royalties

Wapda hopeful about six power generation units each in K-P and G-B will avert the escalation of a dispute.

ISLAMABAD: As the boundary dispute between Gilgit-Baltistan and Khyber-Pakhtunkhwa threatens to derail the Diamer-Bhasha dam-building project, the Water and Power Development Authority (Wapda) has come up with a plan that would evenly split the royalties earned from the hydroelectric power generation at the dam between the two provinces.

Wapda officials hope that the new plan – which would set up six power generation units each in K-P and G-B – will avert the escalation of a dispute that has already seen the inauguration date of construction on the dam pushed back twice, first from May 24 to June 7 and now to October 18.

On Saturday, Gilgit-Baltistan Chief Minister Mehdi Shah said that his province “would not budge an inch” on the boundary dispute. Gilgit’s claims would advantage the newly-created province in claims over the royalties from power generation.

(Read: Shandur, Diamer-Bhasha Dam: G-B unrelenting on boundary dispute)

Wapda’s new plan modifies its old one that had decided to place more power generation units in Khyber-Pakhtunkhwa. The dam is expected to have an installed power generation capacity of 2,250 megawatts.

The boundary dispute, however, is not the only issue plaguing the $12 billion project. International lenders have not yet arranged for the funds necessary for the project, despite several of them agreeing in principle to financing the dam.

(Read: ADB considers options to finance Diamer-Bhasha Dam)

The Asian Development Bank, in particular, had pledged that it would even act as the government’s investment banker in raising the money from international capital markets. The United States government had also suggested that it would be open to providing funding for the dam. The problems facing the project have caused a delay of almost four years. Diamer-Bhasha was originally meant to be completed by 2017, but now will likely be finished in 2021. The dam is expected to generate approximately 19,208 gigawatt-hours of electricity, about 1,100 gigwatt-hours of which will be through an expansion at the Tarbela dam.

Meanwhile, residents of Kohistan district in Khyber-Pakhtunkhwa started protesting on Friday at what they perceive to be a low compensation rate that the government promised to pay them in exchange for moving from the dam’s proposed flood plain. Following the protests, Wapda agreed to increase the amount from Rs92 million to Rs262 million. A ministerial committee, constituted by Prime Minister Yousaf Raza Gilani, had already signed an out-of-court settlement with the approximately 28,650 people in 31 villages affected by the construction of the Diamer -Bhasha dam, offering Rs40 billion in compensation.

The committee, however, failed to resolve the boundary dispute and instead sent it to the Supreme Court, asking them to form a judicial commission to decide on the matter.

About 94 kilometres of the Karakoram Highway will also need to be rebuilt on higher ground after the dam is constructed.

Published in The Express Tribune, October 17^th, 2011.