The Executive Committee of Pakistan’s National Economic Council (Ecnec) has given the go-ahead to the Diamer-Bhasha Dam project.

Work on the dam should begin in September next year. The total cost of the project has been estimated at $12.6 billion. The deadline for completion is 2016.

The Ecnec meeting, presided over by the adviser to the prime minister on Finance, Shaukat Tarin, and held in Islamabad, also sanctioned Rs60 billion for land acquisition for the dam.

Pre-qualification of bids for the 272 metre high, 4.5 GW dam, will start by the end of the month.

After completion of pre-qualification, civil work will begin on the main dam, diversion of tunnels and an underground power house.

Ecnec also approved upgradation of the Karakoram Highway to facilitate the dam’s construction.

The minister for Water and Power, Raja Pervez Ashraf, told a press conference that about 28 000 people, (about 4250 families) would be affected by the project in the NWFP (North West Frontier Province) and Northern areas.

The minister said that leading companies from China and Middle East were ready to invest in the dam, in consortia and on a build-operate-transfer basis. interested European companies, however, wanted to operate on the basis of ‘supplier’s credit’.

The project should be able to pay off its investment costs within seven years of commissioning, because it would generate electricity worth $1.5 billion and supply water for irrigation worth $600 million per year.