The President of Pakistan during his national address on 17th January 2006 announced the decision to construct 5 multi-purpose water storages in the country over the next 10 -12 years. The Diamer Basha Dam Project, on the river Indus and closed to the Tarbela dam, will be one of these and will be undertaken in the first phase. It was announced as the worlds highest Roller Compacted Concrete Dam. The projects foundation stone was laid in 2011 with construction planned to be completed in 2016. The project is estimated to cost over US$8.5 billion with a reservoir covering 20,000 ha that will flood 100 kilometers of the Karakoram highway, and the villages and farms of over 35,000 people (1). It would provide 4500 MW of electricity to the national grid.
According to Water and Power Development Authority (WAPDA) of Pakistan, China will very likely fund the bulk of project costs and even provide some 17,000 workers previously employed in the Three Gorges Dam Project. Moreover, as the project will be supported by Chinese funds, construction works will also most likely be directed and operated by Chinese companies as per Chinese national policies.
However, in a recent meeting in 2013 in the US, the Pakistan government also called for help from the Pakistan-US Energy Cooperation. The two delegations reviewed the existing cooperation and explored future cooperation in oil and gas as well as in other power sectors and also discussed the renewable energy potential in Pakistan. Both sides agreed that Turkmenistan-Afghanistan-Pakistan-India (TAPI) and Central Asia-South Asia electricity transmission project (CASA-1000) projects would assist regional integration and will greatly help in meeting growing energy demands in the region (4).
With economic growth rates between six and eight percent in recent years, the energy needs of the country are growing more rapidly than new energy generation capacity. Lots of power cuts affect urban life and commercial and industrial activities; however, not only power shortages but poorly maintained transmission lines are among the main causes for this. Pakistan is consuming all of its domestically produced natural gas, and is making plans to construct a pipeline to import gas from Iran. Domestic oil resources are not sufficient to meet the needs of the country and imports of oil as well as refined petroleum products from the Middle East are steadily growing. Thermal power plants generate roughly two-thirds of the country’s electricity.
Hydropower now accounts for a third of the nations electricity production, and it has been urgently put into the governments agenda in the last decade. Interestingly enough, one of the reasons for pushing for more hydropower projects is compensating losses in energy production due to early siltation of previous projects, like Tarbela dam (3).
Concerns have been raised since the beginning of the plan for various reasons; firstly, the poor environmental and social record of Chinas global dam industry that could lead to inadequate assessments of impacts.
Second, that the energy produced will not benefit the majority of the population, including farmers and riverine communities, but will only benefit water-thirsty industry and luxury resorts and urban areas in Islamabad and the other four provinces. Yet it is not a project that will increase access to electricity in rural Pakistan. The houses in 40,000 Pakistani villages without access to electricity will not suddenly light up after the construction of the Diamer-Bhasha Dam (2).
Third, since the project is located near Chilas, on the border of the North Western Frontier Province and Northern Areas, it might impact the politically contested Northern Areas, or Pakistan-occupied Kashmir as it is known in India, and could contribute to further unrest in the region. The World Bank, which initially appeared to have an interest in the project and is historically the major funder of large dams in Pakistan, has in fact declined to fund Diamer-Bhasha because of its location in a territory claimed by both India and Pakistan.
Fourth, the reservoir will submerge the carvings which represent the great cultural flourishing and exchange of the Indus Valley regions portion of the Silk Road.
Fifth, the project is located in a earthquake-prone region. In 2005, an earthquake killed over 75,000 people.
Protests have been going on for years among local communities against displacement, submergence of fertile land and against the location of the project, as it is an ecologically sensitive region. Delay in the payment of compensation has also mounted the agitations. Sit-ins, road blockades and marches are ongoing and an appeal has been launched to the Asian Development Bank to cut financing the project.
In January 2014, China has been demanding that all mega power projects, including the Bhasha Dam, Gaddani and Lakhra coal plants, the Tarbela Extension project and many transmission lines, be handed over to China without any international bidding process, and Beijing will directly invest $22 billion in Pakistan (5).