ADB demands resolution of Basha boundary dispute

ISLAMABAD: Asian Development Band (ADB) has stressed that government should focus on addressing issues of affected population, environmental impact and revenue sharing between the contesting territories for the smooth execution of the mega hydel power project of Diamer Basha Dam.

Talking with a select group of reporters, Head of Energy Division of ADB Rune Stroem, along with Country Director Pakistan Werner Liepach said boundary dispute between Gilgit Baltistan (GB) and Khyber Pakhtunkhwa (KP) threatens to derail the Diamer-Bhasha Dam project. KP government is disputing ownership of 18 kilometer long belt with GB government in a bid to get a share in income from power generation. GB legislative assembly has passed the resolution against the KP claim. If the dispute is not amicably resolved it may end up in court that may delay initiation of the project that government plans to under take from next year.

Stroem is fully aware that there will be strong debate on revenue sharing. We can give advice but at the end the issue will have to be decided by the Council of Common Interests. He said ADB will play its role as senior lender, co-financer and will be the financial advisor to Pakistan on the project. He said both parties will review draft of Memorandum of Understanding next week that will clearly define the role of ADB in project execution. He said Wapda will evaluate bids for the project but ADB will also review to ensure transparency. ADB has strong anti-corruption policies and the agency’s involvement will give more credit to the project.

Stroem said success of the project hinges on the satisfaction of local people. The resettlement work has been done but still there are gaps where government needs to bring in improvement as per international standards. He said environment issues and social safeguards with respect to resettlement are extremely critical for successful completion of the project.
Diamer-Bhasha dam, with a storage capacity of about eight million acre feet and projected electricity generation of 4,500MW will be built on River Indus near Chilas in Diamer district of Gilgit Baltistan. Estimated cost of the project is $11.2 billion and will take more than eight years to build.

He said project could not be donor-driven as government is the primary driver. ADB was helping government to structure the project and make it bankable. It is the most complex and the most comprehensive project ADB has ever financed. Werner Liepach said ADB has not yet framed clear views on dam financing requirements but export credit will be major source of financing. Other than export credit International Financial institutions and commercial financing would also be availed to complete the project.