The government has denied that Diamer-Bhasha’s 4,500MW power component is being abandoned. But if the rumour proves true, the project’s economics and the justification offered to Pakistanis would change fundamentally.

Reports that the government had decided to proceed with Diamer-Bhasha as a water-storage dam while postponing or abandoning its power-generation component produced an unusually swift response. WAPDA, the Power Division and the Ministry of Economic Affairs all rejected the claim, describing it as false and misleading.

WAPDA says the Rs1.424 trillion power component remains approved, that power-related civil works will begin by June 2027 and that electromechanical work will follow by December 2027. It also maintains that the project’s intake structures and other essential power interfaces remain part of the dam’s design. For the moment, therefore, cancellation remains an unproven report contradicted by the government’s formal position.

But the controversy should not be dismissed as merely another social-media rumour. Even if the official denial is accurate, the report exposes a legitimate economic question: what would Diamer-Bhasha become if its turbines were removed or postponed indefinitely?

If that happened, Diamer-Bhasha would no longer be the integrated water-and-energy project presented to Pakistan; it would become a different asset with a different financial logic.

The central test, therefore, is not whether officials continue to describe Diamer-Bhasha as multipurpose. It is whether the engineering, financing and procurement decisions still preserve power generation as a real, funded and buildable part of the project. The economics of the combined project

Diamer-Bhasha has always been justified as a multipurpose national asset. It is designed to provide 6.4 million acre-feet of live water storage, regulate irrigation supplies, mitigate some downstream flood risk, reduce sediment reaching Tarbela and generate 4,500MW of electricity.

WAPDA estimates direct generation of approximately 18.1 billion units annually. Regulation of river flows could produce another 2.52 billion units at existing downstream power stations, while sediment control is expected to extend Tarbela’s useful life by about 35 years.

The latest reported financing plan places the combined cost of the dam, reservoir, land, resettlement and power facilities at approximately Rs2.65 trillion, equivalent to about $9.85 billion. That sits against a sharply rising cost base: the dam component was originally approved at about Rs479.7 billion, was reported in the National Assembly at roughly Rs1.049 trillion in December 2024, and has more recently been reported at about Rs1.122 trillion—an increase of around 134 per cent over the original estimate. Of the combined figure, around Rs1.224 trillion is assigned to the dam,........

© The Friday Times