Future of Water Supply Remains Uncertain Despite Ongoing Dam Construction

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Tagline: Islamabad Despite the scheduled completion of Diamer Bhasha Dam (DBD) in 2030, Pakistan’s water challenges are expected to persist, given the anticipated increase in agricultural water demands resulting from traditional farming practices.



Description: Amid Pakistan’s persistent water challenges, discussions with water sector experts reveal a pressing need for the government to allocate additional financial resources for the development of water reservoirs, supplementing existing projects. Information obtained by Business Recorder indicates that despite the authorization of 35% of funds from the total allocation of Rs 90 billion in the Public Sector Development Program (PSDP) 2023-24 during the first two quarters, challenges persist due to delays in project completion and a shortfall in the Foreign Exchange Component (FEC) for hydropower sector projects.

The Economic Affairs Division reports that rupee cover issues are affecting major hydropower and transmission line projects, leading to hurdles in securing donor commitments. The International Monetary Fund’s mandatory requirement for Rupee cover poses a challenge, creating a significant obstacle in utilizing foreign aid for various projects. The slow progress in developing command areas and the current water usage pattern, with 94% of the available 102 MAF surface water dedicated to agriculture, further exacerbate the water crisis.

Water sector experts stress the urgency of reducing this percentage, citing China’s successful reduction to 60% from over 90%. However, they note the lack of effective irrigation efforts by provinces, highlighting the need for concrete action to address the water scarcity issue. Presently, Pakistan supplies canal water to 450 million acres of land, facing an average 25% shortage. To eliminate this shortage, experts suggest the construction of 15 or 16 MAF new reservoirs, contrasting with the ongoing development of the Diamer Bhasha Dam (DBD) of 6.4 MAF, expected by 2029 or 2030.

Concerns are raised about the indolent approach towards water reservoir development over the past four decades, leading to the current challenges. Water sector experts propose allocating a portion of the Benazir Income Support Fund (BISP) to expedite hydropower and water projects, providing both increased water availability for agriculture and affordable electricity.

To secure financing for the DBD, the government explores options with Arab Consortium, including the Saudi Fund, Kuwait Fund, OPEC Fund, and the Islamic Development Bank. Challenges related to circular debt complicate funding arrangements, and the government considers seeking funds through securitization of running projects or exploring loan options. Pakistan’s vulnerability to climate change, coupled with the impact on the Indus system, underscores the need for immediate and effective measures to address the country’s water crisis.


Conclusion: In conclusion, Pakistan’s persistent water challenges require immediate attention and decisive action. Despite the allocation of funds in the Public Sector Development Program, delays and financial shortfalls persist, posing obstacles to effective project implementation. Urgent measures are needed to address issues such as rupee cover, inefficient irrigation, and the slow progress in developing water reservoirs. The government’s exploration of funding options with the Arab Consortium highlights the complexity of the situation. With climate change exacerbating the crisis, proactive strategies and collaborative efforts are crucial to secure a sustainable water future for Pakistan.



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