Over the last decade, the demand for construction of new mega-dam intensified in Pakistan. The proposed Diamer-Bhasha dam, 320 km from the border with China to the North, was the obvious choice because of all the provincial governments agreed to its location. On high of 272 meters, it will be high roller compacted concrete dam in the world, and will provide power generation, water storage and flood control.

With a struggling economy, Pakistan knocked on the doors of the world Bank, the Asian development Bank and even the Western allies for financial assistance. All refused to Finance the project because of the opposition of India of the site the dam is located in the wider region of Kashmir disputed territory between India and Pakistan. In June, 2018, top Pakistani judge surprised many when he ordered to be a crowdfunding campaign began to build Diamer-Bhasha dam.

Fast forward to July 2020, and the crowdfunding effort met its goal. He managed to collect around Rs12 billion ($103 million), far below the approximately $ 14 billion ($20.6 billion) the cost of the Diamer-Bhasha dam. This means the Patriotic drive created by the government to encourage Pakistanis to donate to the Fund, the dam largely failed.

It may be the end of the project, but then China stepped in.

Diplomatic confrontation from India will not go away soon, and new Delhi is likely to use all possible diplomatic avenues to derail the project.

In may this year, Pakistan the contract for the construction of a dam on a joint venture for construction of power Corporation of China and the frontier works organization of Pakistan. It is now clear that the contract was still in China was agreed to give money for the project.

This may be good news for Pakistan, because it seems mega-dam will finally be constructed, but the project still faces obstacles.

Three factors have had major problems that could jeopardize the project. The first is the dispute regarding the total construction cost. Prior to the award of contract, the Pakistan water and power development authority (WAPDA) is always claimed the total cost of the dam is $ 14 billion. After the ceremony of signing of the contract, WAPDA claimed that will only PC1,406 billion (12 billion dollars). Even with the fluctuations in the value of Pakistani rupee is 37% of the total cost is not possible.

The only logical explanation is that WAPDA is to reduce the cost of the project, so that they can show the public they have the necessary funds to complete what it does not. The budget for fiscal year 2020-21, Pakistan has only allocated Rs61 billion ($523 million), accounting for only 2.6% of the initial estimated cost of the dam, assuming that Pakistan continues to lack the financial resources to build the dam in spite of the loan agreed with China.

The second factor is diplomatic confrontation between India. As one Indian analyst describes itthe project is “a natural result of China’s intention to further strengthen the economic partnership with Pakistan,” and the attempt of China to take advantage of geopolitical opportunities generated by the epidemic. It is for this reason that immediately after the signing of the contract for construction, Ministry of external Affairs of India issued a strong statement against the project. India considers a violation of its territorial sovereignty.

Pakistan and China both reject the position of India and decided to move forward with construction. Diplomatic confrontation from India will not disappear in the near future, and new Delhi is likely to use all possible diplomatic avenues to derail the project.

The third factor that could potentially hinder the progress of the dam opposition indigenous population of Gilgit Baltistan, where the dam is located. Diamer-Bhasha Committee of action of the dam Affectees, the group that represents the interests of people displaced by the construction of the dam, requiring Rs15 billion (more than $ 130 million) in compensation, the government refused to pay. There is also dispute between the tribe Harban in Kokhistan and tribe Thor Diamer on the part of the land to be used for the dam.

The situation is compounded by the fact that the residents are also protesting destruction historic Buddhist sculptures, inscriptions and petroglyphs in 50 villages that will be flooded once the dam is in use. While the government announced Fund of Rs78 billion ($670 million) “for the benefit of the people of Diamer-Bhasha”, the local community it is difficult to believe such a claim, given the difficult economic situation of the country, and such protests are likely to continue.

With the potential of dams to generate electricity and irrigate large tracts of land, Islamabad is considering a project as a strategic priority. But these issues – along with the burden of repayment of loans in China may make the dam more of a liability than an asset.

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