The cost of the Diamerpasa Dam project increased by 119.21%, rising from Rp479 billion to Rp1.05 trillion, due to revised design standards, enhanced security measures, and exchange rate fluctuations. Water Resources Minister Musadiq Malik revealed these numbers in a written response during the National Assembly session.
The Minister explained that the design reviews were based on updated seismic standards recommended by the International Commission on Large Dams (ICOLD). These included modifications to the main dam, diversion system, and hydromechanical works to meet Safety Flood Check (SCF) and Potential Maximum Flood (PMF) criteria.
Malik further stated that security incidents involving Chinese contractors and expatriates necessitated major improvements, including increased security deployments at a cost of Rs17 billion and the purchase of a helicopter worth Rs9 billion to facilitate the safe transportation of foreign employees. In addition, movement of expatriates from Islamabad to the site has been limited to air travel for safety reasons.
The project cost was also affected by the depreciation of the rupee, as the exchange rate shifted from Rs105.3 to Rs278.3 per US dollar between 2018 and 2024, representing an increase of 31.34 percent (Rs178 billion). The design changes contributed an additional Rs 85 billion (14.95 percent) to the revised cost. Expenditures related to the Safe City project added Rs7 billion, while Rs82 billion was returned to interest during construction for the foreign component.
The Minister noted that the overall progress on the MW-I contract was 16.09 per cent, and time overrun was an important factor in the cost escalation. He stressed that the Diamer-Basha Dam Company applied the best international practices to monitor progress and address delays.