Cost of Dassu Hydropower Project Soars by 240% with No Accountability Assigned

Islamabad:A government inquiry has revealed that the cost of the Dassu Hydropower Project has skyrocketed by 240%, raising its budget from an estimated 486 billion rupees in 2014 to a staggering 1.74 trillion rupees. Despite this massive increase, the responsibility for the delay and cost overruns has not been placed on any single individual or institution. The blame has been shared among Chinese contractors, the Water and Power Development Authority (WAPDA), and the Planning Commission.
The inquiry committee, headed by civil engineer Athar Hamid, pointed out that delays in land acquisition, local administrative issues in Kohistan district, and security concerns following two deadly attacks on Chinese contractors contributed significantly to the rise in costs. The security measures, while increasing safety, added an additional 48 billion rupees to the project budget, though this only accounted for a minor 3.8% increase in the overall cost.
The project, which was originally scheduled for completion by 2019, has now faced a 10-year delay. The total cost has risen by 1.3 trillion rupees, or 240%, and in dollar terms, the increase amounts to 6.2 billion USD. The committee found that Chinese contractors ignored consultant instructions, while WAPDA awarded construction contracts without ensuring the availability of required land. Local administration also failed to acquire land on time.
Despite these issues, the committee refrained from naming any specific WAPDA officials or senior executives responsible. Instead, it held the Planning Commission accountable for its failure to address land acquisition and settlement issues in a timely manner.
Minister for Planning Ahsan Iqbal, leading the Central Development Working Party, recommended conditional approval from the National Economic Council’s Executive Committee for the project. The committee’s report concluded that the delays resulted from a complex interaction of factors, including administrative hurdles, unforeseen technical challenges, and resistance from local communities.
The inquiry also highlighted the lack of coordination between contractors and consultants, challenging security conditions in the project area, and natural factors like flooding and difficult terrain, all of which contributed to the delay.
The report further stated that 85% of the cost increase was attributed to price hikes, while 15% was due to changes in the project’s scope and design. The committee emphasized that the success of the project now depends on cooperation among the federal government, the Khyber Pakhtunkhwa provincial government, Kohistan’s district administration, WAPDA, contractors, consultants, and local communities.
The project, which began with a budget of 486 billion rupees in 2014, saw its cost revised to 511 billion rupees in October 2019 due to rising land prices. Its completion date was then extended to June 2024. As of January 2025, the project had only progressed by 23.3% in construction and 23% in financial terms.
The project is primarily funded by the World Bank, local and foreign commercial banks, and WAPDA equity, with a total expenditure of 317 billion rupees so far. Of the total estimated cost of 1.73 trillion rupees, 479 billion rupees is attributed to interest on loans.
The committee’s findings raise serious concerns about the management and oversight of large infrastructure projects in Pakistan, especially in light of the continued delays and cost overruns on the Dassu Hydropower Project.