Staggered: Dasu power project manages ‘conditional’ approval

Cost of project to be reduced before implementation.

ISLAMABAD:

The government on Thursday conditionally cleared the 4,600 megawatt (MW) Dasu hydropower project amid serious concerns that the project cannot generate the promised electricity without the construction of the Diamer Basha dam – the project that has already been put on the back burner.  

Headed by Minister for Planning and Development Ahsan Iqbal, the Central Development Working Party (CDWP) also found that the proposed cost of Rs735.6 billion needed to be drastically cut. While conditionally clearing the project, the CDWP constituted a committee to rationalise its cost, according to Planning Ministry officials.

The Ministry of Water and Power proposed Rs735.6 billion as cost of the Dasu hydropower project, including Rs383 billion in foreign exchange requirements. According to Ministry of Planning’s experts, the project cost was Rs685 billion, which the chairman CDWP said could also be lowered.

Against earlier claims of building Dasu in eight years, the CDWP was told that it will take 16 years to complete the project in two phases, which will increase chances of cost escalation.



However, the biggest concern, according to officials who attended the meeting, was that despite spending the huge amount, the project cannot guarantee generating the promised 4,600MW of electricity. Officials from Planning Ministry’s Water and Power wings informed the CDWP that without constructing the Diamer Basha dam, the project could generate only 2,300MW, adding that only the first phase of the project was financially viable without the Diamer Basha dam.

The site for the Dasu power project is 74 kilometers (km) downstream of the Diamer Basha dam.

However, surrendering to the World Bank’s demand, the PML-N government decided to construct Dasu hydropower project first. The lender had lured the government by offering just $700 million, which is one-tenth of the total cost of the project.

Secretary Water and Power assured that the government would build a reservoir of Diamer Basha from its own resources. Arranging $21 billion for constructing two dams at a time seem highly improbable, given that the country does not have financial resources, according to analysts.

After the CDWP’s clearance, the project will now go to the Executive Committee of National Economic Council (Ecnec) for final approval. The CDWP considered 10 projects with an estimated cost of Rs962 billion.

The CDWP approved one project of the Application of Satellite Remote Sensing and GIS Technology for Crop Forecasting and Estimation worth Rs917 million, which will help in scientific crop forecasting. A project for the Capacity Building of Elementary Teachers Training Institutes in Punjab, costing Rs3 billion, was also approved by CDWP under Canadian debt swap arrangement.

The body gave its go ahead to construct 1,200MW Jamshoro Coal Fired Power Project at Rs196.9 billion with a directive to further rationalise the cost. The CDWP also gave concept approval of the Terbala 5th Extension Hydropower Project.

The CDWP approved five projects in the Higher Education Sector including a project for capacity building and up-gradation of selected departments at University of the Punjab worth Rs879 million.

In Water Resources, two projects including the Kaitu Weir Irrigation and Power in North Waziristan Agency worth Rs15 billion, and Indus 21 Water Sector Capacity Building and Advisory Services Project worth Rs 7.6 billion were approved by the CDWP.

Published in The Express Tribune, January 17^th, 2014.

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