Govt Rejects Report of Scrapping Diamer-Bhasha Dam Power Component

The federal government has rejected report of scrapping the power-generation portion of the Diamer-Bhasha Dam project, describing the claim as 'fake news.' The Power Division, in a statement posted on social media on Saturday, said the dam's power-generation component remains part of the government's committed projects under both the current and upcoming Indicative Generation Capacity Expansion Plan (IGCEP). The division said the project continues to feature in Pakistan's long-term electricity generation strategy, rejecting speculation about any decision to remove its power component. It also clarified that the new Independent Power Producers (IPPs) business model has been permanently discontinued in Pakistan following the government's move toward establishing a competitive electricity market. 'Any attempt to associate IPPs with this project and sensationalise the matter is based on unfounded assumptions,' the Power Division said. The clarification followed a report by Brief alleging that the government had decided to drop the 4,500-megawatt electricity-generation component of the Diamer-Bhasha Dam. According to the report, the alleged decision was linked to lobbying by IPPs and would leave the existing electricity market structure largely intact, allowing established power producers to continue receiving significant payments despite limited generation from their plants. The report further claimed that the government had cited surplus generation capacity as the reason for potentially delaying the hydropower component. It said the dam could initially be developed primarily for water storage, with the 4,500MW hydropower facility potentially taken up at a later stage. The report also suggested that such a commitment could serve to soften criticism over the alleged decision. It quoted concerns from hydropower engineers who reportedly warned that postponing key power-generation infrastructure could lead to technical and financial complications.