Khyber Pakhtunkhwa (KPK) has two main objections to the dam:
- KPK claims that the running of Cheshma-Jhelum link canal and overuse of water from the Tarbela Dam is a common occurrence.
- Although the entire canal system of the Ghazi-Barotha hydro electric project is in Khyber Pakhtunkhwa, the electricity generating turbines lie just 500 metres (1,600 ft) inside Punjab such that KPK is denied to resultant royalties.
- While the reservoir will be in KPK, the dam’s electricity-generating turbines will be just across the provincial border in Punjab. Therefore, Punjab would get royalties from the central government in Islamabad for generating electricity.
- Concerns have been voiced that large areas of the Nowshera District would be submerged by the dam and that the wider area would suffer from water-logging and salinity, as has occurred with the Tarbela Dam. As the water will be stored within the Kalabagh Dam as proposed, water levels in city areas up to 200 kilometres (120 mi) away will rise. Engineers with expertise on dam construction repeatedly admitted that Nowshera City could be submerged by the dam’s lake.
- Punjab follows a paradoxical policy when it comes to canals to be run out from the Kalabagh Dam. It talks of a right bank canal which will supply water to D I Khan, but in dialogue with Sindh, rejects construction of the right bank canal as unfeasible.