A Cost-Benefit Analysis of Building a Dam in Pakistan: To Mitigate Floods, Promote Tourism, Boost Agriculture, and Generate Electricity

Abstract

Every year, Pakistan is on the verge of a serious water crisis. It is expected that the crisis of water shortages in Pakistan will reach an alarming level in the near future. Water degradation, climate change, particularly recent global warming, overuse, misuse, diminishing water availability, a lack of water management policies, pollution, population growth, and environmental neglect have all contributed to this crisis. This has undermined Pakistan's economy. Floods in Pakistan have adversely affected livestock, infrastructure, lives, and property, as well as agricultural land and crops. Floods negatively impact agricultural production and the country's economy without adequate water management. The travel and tourism sector in Pakistan plays a crucial role in the country's economy and contributes to its growth and development. However, despite its potential, this sector remains unsatisfied and faces several challenges and limitations. Furthermore, Pakistan faces a persistent electricity shortfall that has led to the implementation of load shedding across the country. The shortage in electricity supply has become a significant issue for both businesses and consumers, impacting the economy and overall quality of life. This paper examines the cost-benefit analysis of building a dam to reduce flood damage, promote tourism, and boost agriculture and electricity. It is difficult to provide accurate estimates of dam construction costs due to a lack of precise information. So many assumptions have been made to complete the analysis. There will also be a sensitivity analysis to test some assumptions.