The cost of the Diamer-Bhasha Dam Project has skyrocketed by 119.21%, increasing from Rs 479 billion to Rs 1.05 trillion. Minister for Water Resources, Musadik Malik, attributed the surge in costs to a combination of external and internal factors, including a revised design, enhanced security measures, and significant currency exchange rate fluctuations.
In his response to the National Assembly on Thursday, the minister explained that the rise in costs stemmed from several key changes. These included a redesign of the dam’s main structure based on updated seismic data provided by the International Commission on Large Dams (ICOLD). Additionally, modifications to the diversion scheme and the flushing tunnel, prompted by new geological investigations, also contributed to the cost increase. Further adjustments were made to hydro-mechanical works, as well as updates to the Safety Check Flood (SCF) and Probable Maximum Flood (PMF) parameters.
The minister also highlighted that the need for stronger security measures, following incidents involving Chinese contractors and expatriates, led to additional expenses. Due to security concerns, the movement of expatriates between Islamabad and the project site was restricted to air travel only.
Malik also noted the significant impact of currency devaluation on the project’s budget. The exchange rate had changed from Rs 105.3 to Rs 278.3 per US dollar between 2018 and 2024, resulting in a cost increase of approximately 31.34%, or Rs 178 billion.
The revised project design alone contributed a 14.95% cost increase, adding Rs 85 billion. Security upgrades accounted for an additional Rs 17 billion, and the procurement of helicopters to ensure the safe transport of foreign expatriate staff added another Rs 9 billion. The implementation of the Safe City Project led to a further Rs 7 billion increase, while 7.5% of the costs—approximately Rs 82 billion—were attributed to interest during construction for the foreign component of the project.
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As of the latest update, the contract MW-I has seen a 16.09% completion rate. The minister emphasized that time delays were a primary driver of the project’s cost overrun, but noted that the Diamer-Bhasha Dam Company was employing international best practices to monitor and address project delays.
In a separate matter, Parliamentary Secretary for Commerce Zulfiqar Ali Bhatti addressed concerns regarding disruptions in Pakistan’s rice exports to European countries. He revealed that the government was considering elevating the Department of Plant Protection (DPP) to an authority in response to issues with certification delays. The prime minister has already suspended an officer and initiated an inquiry into the matter, with efforts underway to resolve the issue.
Meanwhile, members of the opposition party Pakistan Tehreek-e-Insaf (PTI) continued their protest in the National Assembly, demanding the release of Imran Khan and a judicial investigation into incidents on May 9 and November 26. The protest temporarily halted proceedings when PTI members pointed out a lack of quorum, leading the Deputy Speaker to suspend the session for 15 minutes.
