240% Higher Cost Approved for Dasu Hydropower Project

The government on Wednesday conditionally approved the Dasu hydropower project with a revised cost of Rs. 1.74 trillion, a 240 percent increase from the original Rs. 479 billion estimate. The Executive Committee of the National Economic Council (ECNEC) authorized the project primarily to facilitate ongoing loan negotiations with foreign lenders. The 2,160MW hydropower project’s per-unit cost has surged to Rs. 8.79, making it more expensive than initially planned. The approval came during a meeting chaired by Deputy Prime Minister Ishaq Dar, where ECNEC also greenlit the construction of a new border crossing at Wagah with India, along with 30 anti-smuggling posts across the Indus River and Balochistan, at a combined cost of Rs. 15 billion. Regarding Dasu, the government is seeking $1 billion in fresh loans from the World Bank, adding to an existing $517 million loan. It also plans to secure $400 million in commercial loans backed by World Bank guarantees and Rs. 350 billion through domestic financing. An earlier government inquiry revealed the main reasons behind the increased cost for the Dasu project, including delays in land acquisition by local authorities, increased security costs after attacks on contractors, and shared responsibility among Chinese contractors, WAPDA, and the Planning Commission.