August 11, 2012: World Bank is reportedly delaying 4,500 MW Diamer-Bhasha dam for at least 10 years by offering funding for run of the river 4,320MW Dasu hydropower project. This was revealed at a meeting of Senate Standing Committee on Water and Power on Friday under the chairmanship of Senator Zahid Khan.
The World Bank””s role in delaying the construction of Diamer-Bhasha dam was highlighted when Senator Zahid Khan informed the committee that according to his information the Bank is ready to extend funding for Dasu hydropower project instead of Diamer-Bhasha dam. This angered Wapda Chairman Shakil Durrani who stated, “Government””s priority is Bhasha Dam not Dasu and WB is not responsible for policies in Pakistan,” said Durrani.
Dasu hydropower project is located seven kilometres upstream of Dasu village on Indus River and 74-km downstream of Diamer-Bhasha dam and 350-km from Islamabad. The project is located in district Kohistan of Khyber Pakhtunkhwa. “We have made it clear to all the donors that Pakistan will not give preference to Dasu over Bhasha,” he maintained.
Senator Zahid, who had specially invited officials of Economic Affairs Division (EAD) for briefing on funding issues, argued that if Bhasha was delayed why did the government not commence work on Dasu which was equally important? Wapda Chairman contended that Dasu was run of the river project whereas Bhasha would be used for water storage which was an issue in the country as Tarbela dam””s storage capacity was diminishing with every passing day.
He added that “5,000 tons of silt is filling Tarbela dam every day and if Wapda starts work on Dasu dam then Diamer Bhasha dam will delayed for 10 years as we can construct one dam at any given time.” Secretary Water and Power Zafar Mahmood, however, cooled down tempers by pointing out that if enough funding was available there should be no issue in commencing work on both projects.
The committee decided that EAD should brief the committee in its next meeting, about the prospects of funding for Dasu and Bhasha dams. Giving a presentation on 969 MW Neelum- Jhelum Hydroelectric Project, Lieutenant General Muhammad Zubair (Retd) informed the committee that the project cost in 2007 was Rs 130 billion which had escalated to Rs 275 billion in 2012. The project will generate 5,150 million units which guarantee Rs 45 billion revenue annually.
Presently generation cost is less than two rupees per unit after paying back interest. He said that refusal of Norconsult, Norway to work in Pakistan led to mobilisation of new consultants NJC- a joint venture led by MWH, USA on August 1, 2008. The joint venture completed review of earlier basic design by Norconsult in 1998 which was not developed in detail.
He maintained that the project””s design was reviewed after earthquake of 2005 and modified which was also one of the factors for the increase in cost. “In case of earthquake of 7.6 magnitude one part of the project will remain safe which can then be rebuilt easily.” Zubair also informed the committee that Rs 24.843 billion had been spent on the project up till June 30.
Answering a question, he said that Wapda was facing Rs 90 billion shortfall which was being bridged through 10-paisa per unit surcharge, Sukuk bonds and other measures. He said redesigning of project due to earthquake 2005, two-to-three years delay in arranging land by AJ&K government and six-to-eight months delay due to floods 2010 were key reasons behind the late commencement on the project.
In reply to a question, he said the issues of the projects would be resolved at a meeting of Executive Committee of National Economic Council (Ecnec) which was scheduled to meet on August 16. He further stated that Exim Bank of China would approve 440 million dollars for the project very soon and in case of any delay Wapda would face funding issues.
He said Abu Dhabi had promised to extend 100 million dollars for Neelum Jhelum which was not yet released, but he did not disclose the reasons because, he argued, the reasons were not within his purview. Senator Humayun Khan Mandokhel and Senator Nisar Muhammad raised the issue of Norwegian consultants who worked on the project with Norwegian grant of 18 million dollars but failed to find any fault line.
Wapda officials informed the committee that fault line existed at that time but it was not active. Wapda Chairman explained that Norwegian consultants did not conduct detailed geological survey. He further argued that no international consultant was ready to work on that project as it was very close to the line of control. Initially, incumbent contractors were also reluctant to work on this project but later on they agreed. Wadpa changed construction methodology from drill and blast to Tunnel Boring Machine (TBM) because progress was slow and behind schedule with drill and blast.
He further maintained that rock condition facilitated TMB deployment. This method has significantly faster excavation rates (12.5-16.5 m/day per phase) implying that both tunnels will be completed in 30 months. Due to TMBs project will be completed in 2016 instead of 2018. Senator Nisar Muhammad raised eyebrows by saying that Pakistan was purchasing Chinese equipment because of low cost but durability of Chinese equipment was questionable.
Member Wapda argued that it was not possible for Wapda to buy equipment from other countries with funding from China. “How can we set our conditions when we are borrowing money from other countries? If China gives funding we are bound to buy Chinese equipment,” he added. Wapda Chairman, however, explained that Wapda would depute its engineers to inspect the equipment. The committee also discussed Gomal Zam Dam, Kurram Tungi dam, Dargai -Darband dam and rehabilitation of Jabban power station, and irregularities in projects.
The committee took serious note of continued absence of Minister for Water and Power Ahmad Mukhtar from the meeting and decided to write a letter to Chairman Senate Nayyar Bukhari requesting him to apprise Prime Minister about the Minister””s absence and recommend action be taken against him.