The federal government on Saturday rejected a report claiming that the Centre had scrapped the power-generation component of the Diamer-Bhasha Dam, terming it "fake news". In a statement shared on social media, the Power Division clarified that the generation component of the Diamer-Bhasha Dam remains a committed project in both the existing and future Indicative Generation Capacity Expansion Plan (IGCEP) documents.

The clarification comes amid reports regarding the future status of the project's power generation component. The Power Division emphasised that the component continues to be included in the country's long-term power generation planning. "Furthermore, for absolute clarity, the new independent power producers (IPPs) business has permanently closed in Pakistan after the establishment of a free electricity market by the present government," the Power Division added.

It said that any attempt to link IPPs with this project and sensationalise it is based on nothing but fake assumptions. Earlier, a publication claimed that the government had decided to scrap the dam's 4,500-megawatt power generation component. The report cited an alleged "leaked internal document" from the Economic Affairs Division dating back to earlier this year and, quoting a source directly familiar with the decision-making process, said the decision came after lobbying by IPPs.

According to the report, this would effectively preserve an established electricity market structure in which entrenched power suppliers continue to receive substantial payments even when their plants generate little or no electricity. Hydropower engineers have warned that delaying the installation of critical infrastructure could create serious technical and financial difficulties if essential intake connections and waterway structures are not incorporated while the dam is under construction.