The federal government firmly rejected reports on Saturday suggesting that the power-generation segment of the Diamer-Bhasha Dam had been abandoned, labeling such claims as “fake news.” The power division issued a statement on social media to clarify that the generation component remains an active and committed part of both current and future Indicative Generation Capacity Expansion Plan (IGCEP) documents.
This clarification was prompted by circulating reports questioning the future of the dam’s power generation element. The power division stressed that this component continues to be integral to Pakistan’s long-term electricity generation strategy.
In a significant development, the division also noted that the era of independent power producers (IPPs) has effectively ended in Pakistan following the establishment of a free electricity market by the present government. It dismissed any attempts to associate IPPs with the Diamer-Bhasha project as baseless and driven by unfounded assumptions.
Earlier, a report claimed the government had decided to eliminate the dam’s 4,500-megawatt power generation capacity. This report referenced an alleged leaked internal document from the Economic Affairs Division dated earlier this year and cited an unnamed source familiar with the decision-making process. The source attributed the decision to lobbying efforts by IPPs.
The report suggested that scrapping the power component would maintain the existing electricity market structure, where dominant power suppliers continue to receive significant payments even when their plants operate below capacity. It further stated that the government’s official rationale for dropping the generation segment was the country’s current surplus in power generation capacity.
Meanwhile, the report indicated that the government’s contingency plan involves constructing the 4,500-megawatt hydropower complex at an unspecified future date, with the Diamer-Bhasha Dam initially serving primarily as a water storage reservoir. However, this was described as a possible political maneuver to soften the impact of the decision.
Hydropower engineers reportedly warned that postponing the installation of essential infrastructure could lead to serious technical and financial challenges. Critical components such as intake connections, isolation gates, tunnel sections, and other waterway structures need to be integrated during the dam’s construction phase while the site remains dry, the report added.
