Valuation and Pricing of Surface Water Supplies in Pakistan

Pakistan has the largest contiguous, well-articulated, and comprehensive irrigation system in the world, with 3 storage reservoirs, 68 small dams, 19 diversion barrages, and 45 canal commands with 12 Link Canals for inter-basin transfer of water. About 0.1 million outlets supply water to the farmers to irrigate land besides more than 600,000 tubewells. The whole irrigation network commands an area of 45 million acres (18.22 Mha) out of which 79 percent is irrigated by canals or tubewells/wells. More than half of the canal irrigated areas (58 percent) is irrigated perennially and 42 percent nonperennially [NWSR (2002)]. The average annual flow of Indus River System is approximately 151.58 million acre feet (MAF) of which presently 103.81 MAF (128.1 BCM) is being diverted to irrigate farm lands [NWSR (2002)]. The present live storage capacity of the reservoirs is about 12.5 MAF (13 percent of river flows) compared with the original capacity of 15.7 MAF. The hydropower generation is constrained by seasonal inflows to reservoirs and irrigation requirements by Indus River System Authority. The generation dictated by irrigation requirements is the highest in the months of July to October. Little more than half of the diverted flows (55 percent) become available at farm gate, 42 percent infiltrate to groundwater reservoir and balance 3 percent is lost as evaporation. Of the total water that seeps down to the groundwater reservoir, including some 27 percent of farm gate supply through field seepage, nearly 85 percent is being extracted. Groundwater owing its existence to operational canal system, supplies over 40 percent of crop water requirements of the country