Lenders pressurise the government to review the Kalabagh Dam project

International lenders are pressing the Pakistan government to reconsider the Kalabagh dam project as a priority water sector project and bring up constitutional amendments in the parliament for cost and benefit
sharing of new reservoirs among the related stakeholders.

A reports was issued by the water task force of the Friends of the Friends of Democratic Pakistan (FoDP) stating that the lending ordanisations and bilateral development partners have also suggested the government to impose a surcharge of about one US cent
per kwh of electricity and $5 on each irrigated acre to raise $1.7 billion (Rs 150) billion). This will provide sufficient funds to fulfil a key component of a host of infrastructure projects for hydropower generation, flood control and irrigation.

The report further stated that when Tarbela and Mangla dams were built 50 years ago, it was anticipated that a new reservoir similar to the size of Tarbela would need to be built every ten years to meet the challenge of water and increase the hydel power.

“To the eternal shame of all involved, 50 years later only two minor additions have been made — some additional hydroelectricity capacity at Ghazi Barotha and the recent raising of Mangla dam. For decades a deadly combination of internal dissension and external
prevarication precluded the building of new large dams,” reads the report.

The statement also praised the decision of the Council of Common Interests to develop a consensus on Diamer-Bhasha dam following differences over Kalabagh dam. However, the report presented kept insisting that it is extremely vital for the government of Pakistan
to reconsider the Kalabagh project.

“This is important because the stream of costs and direct benefits yields a net present value of $97 billion and an internal rate of return of about 16 per cent, in addition to large indirect benefits,” the report says.

With increasing shortfall of electricity in the country, the government needs to find a quick and permanent solution and Kalabagh dam project can certainly smooth out the problems to a great deal.

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Posted by Farhan Hameed on Dec 4 2011. Filed under Business, Pakistan. You can follow any responses to this entry through the RSS 2.0. You can leave a response or trackback to this entry