The total cost of the Diamer-Bhasha Dam has escalated to Rs1,049 billion, up from the initially approved Rs479 billion, while the project’s completion has been delayed by 22 months to December 2032, according to details shared by the Ministry of Water in the National Assembly.
The cost escalation of Rs570 billion was attributed to multiple factors. The Ministry explained that when the PC-1 was approved in 2018, the dollar exchange rate was Rs105.3, but it has now risen to Rs278.3, leading to an impact of Rs178 billion. The disparity in contract MW-1 Award and the PC-1 estimates contributed Rs133 billion, while changes in design to address seismic safety requirements and climate-related risks, including Glacial Lake Outburst Floods (GLOF), added Rs85 billion.
Additionally, Rs82 billion was included as Interest During Construction (IDC) due to the likelihood of securing foreign loans, which was not part of the original PC-1.Â
Enhanced security measures also added Rs17 billion, procurement of a helicopter for safe transport of foreign staff cost Rs9 billion, and a Safe City initiative to address the region’s security situation contributed Rs7 billion.
The Ministry also provided reasons for the delay, stating that the project was initially scheduled for completion by February 2029. Based on the current progress, construction is now expected to finish by December 2030, with financial and defect liabilities extending until December 2032.
The delay has been caused by several interconnected factors. The relocation of the Karakoram Highway (KKH), completed in April 2022 instead of August 2020, resulted in a 20-month delay, as it hindered work on the dam’s left and right abutments and diversion tunnels. Security concerns prevented workforce mobilization for night shifts between August 2020 and October 2022, causing a delay of 26 months.
A revision in the contractor’s proposed river diversion scheme, based on recommendations from the international panel of experts, also added 12 months to the timeline.Â
