My understanding: Russian engineers warned Saddam it could not be built there, but he ordered it done anyway to partially cut off Kurdish rebel movement by creating a lake. See eg

https://web.archive.org/web/20140219214451/http://www.shafaa...

The whole thing is an utter clusterfuck. An American civil engineering prof is saying the sole possible solution is a cutoff wall that, by the way, has to not only be 800 ft below the embankment but is significantly deeper than any other such cutoff wall ever built. And it must be constructed in the middle of Iraq under a dam in serious danger of collapsing.

http://foreignpolicy.com/2016/02/03/will-italy-be-able-to-fi...

And finally another interesting article; the alternative to a cutoff wall is building a second $2B dam downstream. There's a good graphic half way down the article of the problems with the Mosul dam. Of course, that's not just $2B but at minimum several years away...

http://www.theguardian.com/world/2016/mar/02/mosul-dam-engin...