Daily Times

Islamabad: The Institute for Policy Reforms (IPR) has revealed in its fact sheet that Pakistan is among the most water-stressed countries in the world, largely, due to siltation in dams and a rampant growth in population, while this will only become worse in future, said a press release issued here on Tuesday.

“The water challenge faced by Pakistan today is bigger than that of the power sector. And it is getting worse every day. Pakistan must urgently increase its water storage capacity,” stated the fact sheet, issued today by the Institute for Policy Reforms. The Institute also recommends that the government must immediately start building the Diamer Bhasha dam forthwith. The scale and complexity of the project require the top level governmental leadership. This will speed up execution of various projects in Pakistan and highlight its priorities to the international donors. Pakistan must request Chinese assistance for the project.

It was also noted that Pakistan’s agriculture production fell in fiscal 2015-16. A number of issues, which constrain agriculture in the country, include costs of inputs and price volatility of outputs. Farmers do not get quality and virus resistant seeds. Water availability and its use are equally key issues.

Area irrigated by canals, in Pakistan, has been in a long-term decline since the 1990s. The total gross storage capacity of under 19 MAF is just 14 percent of available water resource and has not changed at all since 1980. The per capita dam capacity was 320 cubic meters in 1980. However, it is only 150 now. “We have not built a single large dam since Tarbela. Kalabagh has been in terminal debate. Diamer Bhasha has been a permanent work in progress. During this time, net water storage has come down by 30%.

The Fact Sheet recommends urgent execution of Diamer Bhasha. It is a critical project that will increase water and power supply in the country,” it was noted.

The fact sheet also mentioned Bhasha, which will add 6.4 MAF to our gross storage. This is 35 percent to 40 percent of the total existing capacity. The project will add 4,500 MW of hydropower generation capacity. Bhasha’s IRR makes it a feasible project though its real benefit lies in enhanced national security. The reservoir, additionally, will increase power generation capacity of Dasu by about 25% and of Tarbela by an estimated 10 to 15%. It will also reduce silting of Tarbela. “Our experience from Tarbela and Mangla dams show that actual benefits far exceed original estimates. World experience shows also that such projects especially benefit the poor,” it was told.

At Rs. 834.2 Billion or USD 11 Billion equivalent (at 2009 rate for USD), the project cost is high and perhaps a deterrent to immediate execution. Land acquisition is another Rs. 101.3 Billion. And then GoP has a separate project for transmission of power. Substantial project completion period is eight years though the total period is eleven years. ECNEC approved the project in 2009. It could have been nearing completion by now.

WAPDA, the project execution agency has met almost all technical requirements to begin the work. The project is on hold for want of funds. The size and financial magnitudes are unprecedented for Pakistan. However, breaking up project costs between the water and the power sectors and phasing its implementation makes it less daunting.

The fact sheet advises GoP to implement power generation as an IPP. This leaves water civil works for the public sector. The total amount needed for the dam is USD 2,934 Million or Rs. 310 Billion. Adding 50 percent of this cost as interest incurred during construction and other items will increase the total to USD 4.6 Billion or Rs. 486 Billion, the amount needed over eleven years.

Phasing financial needs by physical activity suggests that it does not exceed Rs. 56 Billion in any one year. However, because of its scale and large foreign component, Bhasha needs significant external assistance.

GoP must urgently sponsor the project by seeking funds from the Peoples’ Republic of China. Physically, the project lies on the KKH along the China-Pakistan Economic Corridor. It also falls within the sectors selected for bilateral cooperation. IPR states that, so far, GoP has not addressed its water challenges in an earnest manner. It must launch Diamer Bhasha immediately. The government must hold a top-level meeting with the Government of the Peoples’ Republic of China to obtain their assistance. They may also hold a top level discussion with neighbouring countries to assuage their concerns. GoP must commit and provide enough PSDP funds for project implementation.