Govt dismisses report of scrapping Diamer-Bhasha Dam power component as ‘fake news’

• Component remains in long-term power planning: power division.
• Free electricity market replaced new IPPs, says power division.
• Govt rejects attempts to link IPPs with Diamer-Bhasha project.

The federal government on Saturday rejected a report claiming that the Centre had scrapped the power-generation component of the Diamer-Bhasha Dam, terming it “fake news”.

In a statement shared on social media, the power division clarified that the generation component of the Diamer-Basha Dam remains a committed project in both the existing and future Indicative Generation Capacity Expansion Plan (IGCEP) documents.

The clarification comes amid the report over the future status of the project’s power generation component. The power division emphasised that the component continues to be included in the country’s long-term power generation planning.

“Furthermore, for absolute clarity, the new [independent power producers] IPPs business has permanently closed in Pakistan after the establishment of a free electricity market by the present government,” the power division added.

It said that any attempt to link IPPs with this project and sensationalise it is based on nothing but fake assumptions.

Earlier, Briefclaimed that the government had decided to scrap the dam’s 4,500-megawatt power generation component. The report cited an alleged “leaked internal document” from the Economic Affairs Division dating back to earlier this year and, quoting a source directly familiar with the decision-making process, said the decision came after “lobbying” by IPPs.

According to the report, this would effectively preserve an established electricity market structure in which entrenched power suppliers continue to receive substantial payments even when their plants generate little or no electricity.

The report said the government’s publicly stated reason for dropping the generation component was that Pakistan already has excess power generation capacity. At the same time, the government’s fallback position is reportedly that the 4,500-megawatt hydropower complex could be constructed at an unspecified later stage, while the Diamer-Bhasha Dam could initially be developed mainly as a water-storage reservoir.

However, that promise may be a political trick intended to cushion the impact of the decision, it added.

The report claimed that hydropower engineers have warned that delaying the installation of critical infrastructure could create serious technical and financial difficulties.

Essential intake connections, isolation gates, tunnel sections and other waterway structures need to be incorporated while the dam is under construction and the site remains dry, Briefclaimed.