Islamabad has recommended a new version of the Dasu hydropower project for approval with a staggering price tag of Rs 1.7 trillion. As per credible reports, the new cost represents a meteoric 240 percent rise from initial estimates.

 

Earlier estimates pegged the total cost at a conservative Rs 479 billion which would have made it the most economical power generation venture. However, with the project’s cost now surging by Rs 1.3 trillion, analysts have pointed out how inefficient the scheme has become after the revision in price.

 

According to reports, the per unit cost of power has swelled to Rs 8.79, which effectively makes the Dasu Project the most expensive one in the country’s history. With the project requiring $6.2 billion, a large influx of foreign investment and loans will be required to propel the project to the finish line.

 

An announcement from the Ministry of Planning has revealed that under Minister for Planning Ahsan Iqbal, the Central Development Working Party (CDWP) has decided to take up ‘Stage-I’ of the revised Dasu Hydropower Project. Reports suggest that this project is worth Rs 1.74 trillion and could significantly boost Pakistan’s power generation capacity.

 

Ahsan Iqbal reportedly expressed concern regarding the colossal 240 percent price increase which had come about because of severe mismanagement and persistent delays. For reference, the project does not even have a chief financial officer for the management of funds. However, Iqbal notably outlined how the previous government was responsible for these issues, effectively clearing the PMLN administration from any blame. 

 

Nevertheless, he decided to forward details of the scheme to the Executive Committee of the National Economic Council (ECNEC) for approval. The ECNEC meeting will be chaired by Deputy Prime Minister Ishaq Dar and progress on the project will remain suspended until await his approval. 

 

In 2014, the project was slated to produce power at a per-megawatt cost of just Rs 236 million. The aforementioned figure however has now exploded to Rs 804 million per-megawatt.

 

Aside from the high cost of power generation, experts have highlighted how a vast array of mega-projects can be completed if funds for the Dasu project are rerouted elsewhere. 

 

With the project’s price tag reaching $6.7 billion, reports from reputable institutions suggest that the federal government could have laid tracks for the Karachi-Peshawar railway. However, Ahsan Iqbal has outlined the importance of the project to combat water security issues.

 

The World Bank has provided $517 million for the project and additional funding is likely to be secured from the World Bank too - as government entities remained locked in discussions with the global lender for an additional $1 billion loan package.