ISLAMABAD: The Ministry of Water Resources informed the National Assembly on Monday that the cost of the Diamer-Bhasha Dam has surged to Rs1,049 billion, a sharp increase from the initially approved Rs479 billion. The dam’s completion, originally scheduled for February 2029, has been pushed to December 2032—a 22-month delay.
During the question hour, the ministry attributed the cost escalation to various factors, including:
Exchange Rate Impact: The dollar exchange rate increased from Rs105.3 in 2018 to Rs278.3, contributing Rs178 billion to the revised cost.
Seismic Safety Enhancements: Design changes based on updated ICOLD guidelines and expert recommendations added Rs85 billion.
Foreign Loan-Related Costs: Inclusion of Interest During Construction (IDC) due to expected foreign loans contributed Rs82 billion.
Contract Adjustments: Disparities between the approved PC-1 and awarded contracts accounted for Rs133 billion.
Security Measures: Additional security provisions and a helicopter for expatriate staff added Rs26 billion.
Safe City Scope: Security enhancements necessitated by the local situation increased costs by Rs7 billion.
The delay stems from multiple challenges, including:
Relocation of Karakoram Highway: A 20-month delay in highway relocation by the National Highway Authority impeded foundational construction.
Night Shift Security Issues: Workforce mobilization during night shifts faced a 26-month delay due to inadequate security.
River Diversion Design Revisions: Expert-advised changes in river diversion designs caused a 12-month delay.
Additional Factors: Covid-19, limited fiscal space in the PSDP, forex restrictions, and logistical challenges due to floods further slowed progress.
While physical construction is expected to conclude by December 2030, contractual obligations, including defect liability and financial settlements, will extend until December 2032.
