Cost-Benefit Analysis of Kaptai Dam in Rangamati District, Chittagong, Bangladesh

Abstract

This study aims to assess the net benefit of the kaptai dam on the Karnafuli river in Kaptai, Chittagong, Bangladesh. Kaptai Dam, the only hydroelectricity power source in Bangladesh, provides only 5% electricity demand of Bangladesh. The Dam is located on the Karnafuli River at Kaptai in Rangamati District, 65 km upstream from Chittagong. It is an earth-fill or embankment dam with a reservoir with a water storage capacity of 11,000 skm. Though the Dam's primary purpose is to generate electricity, it became a reservoir of water used for fishing and tourism. To find the net benefit value and estimate the environmental costs and benefits, we considered the environmental net benefit from 1962 to 1997. We identify the costs of Kaptai Dam, including its establishment cost, operational costs, the costs of lives that have been lost due to conflicts, and environmental costs, including loss of biodiversity, loss of land uses, and loss of human displacements. Also, we assess the benefits of electricity production, earnings from fisheries production, and gain from tourism to Kaptai Lake. The findings show that the Dam contributes tremendous value to Bangladesh. As a source of hydroelectricity, the Kaptai Dam is a source of clean energy, and its value might have been worthy of this Dam produced a significant portion of the electricity. However, providing less than 5% of the national demand for electricity followed by various external and sensitive costs, the Dam hardly contributes to the Bangladesh economy. This study thus recommends that Bangladesh should look for other sources of clean energy that have no chances of eco-political conflicts.