By Zeeshan Haider Zeeshan Haider
Tue Nov 11, 2008
ISLAMABAD (Reuters) Pakistan approved on Tuesday a plan to build a dam on the Indus river at a cost of more than $12 billion as part of efforts to overcome an acute power shortage.
Pakistan is suffering from a power deficit of up to 5,000 MW and state utilities are implementing load-shedding, or switching off power to different areas for several hours a day, across the country to make up for the shortage.
The government had approved the construction of the Bhasha dam project in the Gilgit region in the north which will produce 4,500 MW of electricity and include a reservoir for 8.1 million acre feet of water, a government minister said.
"This is a great project for the Pakistani nation," Minister for Water and Power Raja Pervez Ashraf told a news conference after a meeting of the executive committee of the National Economic Council, which deals with development projects.
The project would cost $12.6 billion and would be completed in seven years, he said.
Ashraf said pre-qualification bids for the dam, a diversion tunnel and an underground power station would be held on November 30.
The National Economic Council sanctioned $745 million for acquisition of land for the dam and compensation to people affected by the project, the government said in a statement.
Ashraf said 28,000 people would be affected.
The construction of reservoirs and dams is sensitive in Pakistan where down-river provinces, such as Sindh in the south, complain that they risk being deprived of their fair share of water.
Former president Pervez Musharraf campaigned for the construction of the Kalabagh dam on the Indus river, a considerable distance downstream from Gilgit.
But Musharraf abandoned his efforts to get the dam built after opposition from three of the country's four provinces, which feared Punjab, the main agricultural province, would siphon off an unfair amount of water.
The seven-month-old civilian government that came to power this year has shelved plans for the Kalabagh dam and has promised projects that do not raise controversy to meet the energy shortage.
None of the provinces has raised objections to the Bhasha dam, apparently because its location in a northern mountain valley has eased fears that Punjab can take an unfair share of water.
About a third of the country's power generation capacity of 19,566 MW comes from hydro-electricity, with most of the rest produced by thermal plants.
The demand for electricity in Pakistan is projected to grow by 8.7 percent a year.
