Tuesday, August 14, 2012

Diamer-Bhasha Dam funding

THE country’s perennial water shortages notwithstanding, there is little evidence of a concerted push by the state towards speeding up projects that could contain the crisis.

On Friday, a Senate Standing Committee on Water and Power said that the World Bank would rather fund the Dasu power project in Khyber Pakhtunkhwa than the Diamer-Bhasha dam in Gilgit-Baltistan on account of India’s objections rooted in Gilgit-Baltistan’s territorial status. This reported preference appeared acceptable to the presiding senator but not to the Wapda chairman who emphasised that the Bhasha dam would remain a priority.

Both stances have merit — alternative projects should not be rejected if there are difficulties in undertaking others, while Bhasha, which would be the first mega dam after Tarbela was completed in 1976 and would generate 4,500MW of electricity, is of primary importance.


However, the core problem, that of debilitating water scarcity, is glossed over in such a debate. India has not made its objections formal, and in any case its concerns are hardly tenable when its own water security is not threatened by the Bhasha project. It is important, then, to look at other factors which may be causing potential donors to blink, and hampering the government’s plans.

The apparent absence of a comprehensive business plan, with the names of all donors and lenders, comes immediately to mind. How does Pakistan propose to fund the huge venture of at least $12bn? The government is still looking around to complete a consortium of committed financiers, while interested parties willing to invest in the costly project are concerned that a partnership of public and private entities including governments, banks, investors, lending agencies, etc. has yet to take shape. It is only the active pursuance of such a plan that will send out the right signals so that even dithering financiers can shake off third-party objections and place confidence in the government’s intentions.

Doubts have been cast on the capacity of the authorities, right from the Planning Commission to the Ministry of Finance, to see the project through. But the cost of not doing so can prove heavy for the country in the long run. Dawn

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