Pakistan Issues $12.6 Billion International Tender for Diamer Bhasha Hydroelectric Dam

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Researched by Industrial Info Resources (Sugar Land, Texas)--The government of Pakistan has issued an international tender valued at $12.6 billion to develop the Diamer Bhasha hydroelectric dam project on the Indus River in northern Pakistan. Upon completion, the dam would have a power generation capacity of 4,500 megawatts (MW) and the power output would be fed to the country's national grid. Pakistan's current power generation capacity would increase by 30% with the completion of the Diamer Bhasha project. Construction is scheduled to begin in September and be complete in 2016. The project is expected to reduce the country's dependence on thermal power significantly and, consequently, result in savings in the country's foreign exchange.

Pakistan's National Economic Council has already approved a $1.5 billion grant toward the development of the project. Funds approved by the council have been earmarked for acquisition of the required land. State-owned Water and Power Development Authority of Pakistan (WAPDA) (Lahore, Pakistan) has estimated the cost of land acquisition and resettlement at more than $2 billion. Pakistan's federal budget for 2009-10, which would be announced shortly, is expected to allocate $375 million toward the project.

The selected project site is located in a mountainous and highly earthquake-prone area, which will pose several engineering challenges. Before constructing the dam, Pakistan would have to upgrade the roads leading to the project site and enable them to support the movement of heavy-moving construction and powerhouse machinery. Two 500-kilovolt transmission lines would have to be set up over some very long and difficult stretches of hilly land.

At a recent meeting between Pakistan and China that was set up to discuss collaborative projects, a Chinese company has reportedly been engaged to conduct feasibility studies of the project. The Three Gorges Dam Project Development Corporation of China has been extended a special invitation to participate in the Diamer Bhasha project.

The Diamer Bhasha project has attracted a great deal of discussion ever since it was first proposed in 2006. The location of the project in an extremely sensitive seismic zone has given rise to fears of widespread destruction in the event of an earthquake. Although WAPDA announced that the project will require 10 years to implement, independent experts believe that it would not be possible to implement the project in less than 12 years because of the high seismic risk involved. Designing a project to be able to withstand the high risks would require very precise and detailed studies to be undertaken. The devastating effects of the 2005 earthquake in the region have increased the need for such studies.

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