Diamer-Bhasha: WB links dam’s funding to Indian agreement
Amidst strained relations with the US, Pakistan was unable to obtain a positive response from Washington-based World Bank to help finance the $11.7 billion Diamer-Bhasha dam project.
Sources in the ministry of finance revealed that the World Bank has again linked the financing of the multi-billion dollar project with Indian concurrence. Pakistan was unable to receive a firm commitment from World Bank’s Vice President for South Asia Isabel Guerrero to co-finance the mega project when Finance Minister Dr Abdul Hafeez Shaikh met with the former on Monday.
Sources added that Shaikh raised the issue of financing the dam with the vice president but could not get a “welcoming response”.
Earlier, the government had claimed that the World Bank has agreed in principle to finance the project. The breakthrough was achieved during Shaikh’s meetings with top officials of the international lending agency during his visit to Washington.
Officials are attributing the bank’s retraction and change of heart to the strained relationship that Islamabad and Washington have witnessed of late. Some sources said that the World Bank has linked the financing of the dam with Indian concurrence for the project — given India’s opposition to the dam on claims that it is located in the disputed territory of Gilgit-Baltistan.
Insiders insisted that the US has given assurances that it will ask the World Bank to finance the project but the promise remains unfulfilled. “We have come to the conclusion that the issue of the financing of the dam by the World Bank can only be resolved during strategic discussions with the US,” an official said.
The US enjoys immense clout over the working of the international bank given that it is the largest fund provider and also holds the presidency of the multilateral lending agency.
The finance minister also asked the World Bank to restore its budgetary support that remained suspended due to deterioration in key macroeconomic indicators of the country. However, the government could not get encouraging response on that front either.
The Asian Development Bank (ADB) is expected to be the lead financer of the project that is expected to generate 4500 megawatts of electricity besides storing water for agriculture purposes once completed.
Although the ADB has yet to formally announce the exact numbers despite forcing the government to agree to various conditions, Pakistan is expecting to receive around $4 to $4.5 billion.
In a bid to avoid any dispute, the ADB has compelled the government to offer compensation of international standards which increased the cost of land acquisition. The fresh cost of land acquisition has been worked out at Rs116.4 billion, according to the Planning Commission document. However, the government has allocated only Rs7.8 billion for the next year expecting little progress on the dam due to financing bottlenecks. ADB’s new Director General for South and West Asia Klaus Gerhaeusser is also coming to Islamabad on a one-day visit to discuss issues relating to the financing of energy sector projects, primarily the Diamer-Bhasha dam, said sources.
He is slated to hold meetings with Shaikh, Minister for Water and Power Chaudhry Ahmad Mukhtar and Wapda Chairman Shakil Durrani.
Affectees stopped construction
Meanwhile, hundreds of people likely to be displaced by the construction of the dam in Chilas intervened and forcefully stopped the work on the model villages, threatening that they would not let the work start unless the government gives them a payment of compensation.
According to the residents of Chilas, hundreds of people went to Harpan Das where construction work on model villages was underway. “They were demanding assurance from the government to pay them compensation in return for their land,” a resident of Chilas said on Monday.
The protestors later gathered into a rally and complained that while people of Chilas were facing displacement, authorities were busy making money.
The construction work had been suspended till the filing of this report.
(WITH ADDITIONAL INPUT BY SHABBIR MIR FROM GILGIT)
Published In The Express Tribune, June 26th, 2012.
COMMENTS (24)
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@Vikas: Boy!!!!! You Seriously Need To See A Psychiatrist
I don't know what really these indian think. they are actually day dreaming. you people should try to look what is happening in your country. economic grow is either stop or in negative. from jan to june more than 30 billion of investment has gone out of india. if world bank don't provide funds the construction will be slow but it won't stop. well about pakistan asking india for power and e.t.c india need pakistan if it wants to grow because all the gas and oil what india need in future is coming from central asia.
@Tanweer:
The dams built in India are funded by India and we don't need anyone permission to build them. With respect to violation of Indus Water Treaty - I urge you to read the following "Troubled Waters" in this week thefridaytimes. Be informed and then only make statements
http://www.thefridaytimes.com/beta3/tft/article.php?issue=20120622&page=8
@Mirza: Hahahaha Yaa ryt. asking India 4 power supply crude oil refining train engines dengue medicines and yet U r b top power. Even Chinese r not this arrogant despite being a 4 trillion dollar economy while Pakistan barely manages to touch 200 billion. Study economics plzz
@Vikas: And what about dozens of dams India has built or under construction in Indian 0ccupied Kashmir, that too in total disregard to Indus Water Treaty that clearly defines which rivers would be used by Pakistan. Aman ki Asha and other people to people contacts are merely an eye-wash. India wants to economically cripple Pakistan.
@mr. righty rightist: Well, technically, J&K also belongs to Pakistan as all Pakistani rivers flow from there!
$ 11-12 Billion is not a big amount for Saudi, Kuwait, UAE and so on. Only if they are rightly approached to pitch in.
Gilgit Baltistan is a legal part of Pakistan and we have got our independence in 50s,its only a conspiracy against Pak-China relation ship because Gilgit is the only route to china and other central Asian countries. I am a Pakistani by birth how dare a Indian bania called me Indian?
Everything seems to fall in place if one goes through the article of Ms C. CHRISTINE FAIR in Foreign Policy magazine
(http://www.foreignpolicy.com/articles/2012/06/21/whattodoaboutpakistan?page=0,2 )
It seems game has started as per American plans.
@Arijit Sharma, Dreaming in the day light is your absolute right.
@Arijit Sharma: " The world recognizes that Pakistan is in illegal occupation of parts of the Indian State of Jammu and Kashmir.These areas will revert to India in short course of time" Inshallah brother it will happen.
@Arijit Sharma: Wake up beta time to go to school.
In Your Dreams
That is a good development. Gilgit Baltistan is not a part of Pakistan rather a disputed land. The people of Gilgit Baltistan are living without a constitution.
And still the world does not understand why general public has a disliking for USA, when people need water and energy USA puts its foot down.
Very good.
India should never concur to the building of this dam. There is a genuine reason.
It will be invariably built by the chinese. Chinese presence in the disputed Gilgit Baltistan, which technical is INDIA, should not be encouraged.
India should keep opposing t the building of this dam.
The world recognizes that Pakistan is in illegal occupation of parts of the Indian State of Jammu and Kashmir.These areas will revert to India in short course of time.
Multi billion dollars is chump change. We are a proud country and we do not need to beg the West. In fact many of us want the West to stop giving aid to Pakistan, isn't that what many of us have been demanding? We have lots of money to develop a couple of hundred bombs, missiles and most expensive war toys with huge army with all the perks. We can afford all this and do not need to beg. In addition all the dams in Pakistan are made with the help from China and S. Arabia our best friends and they would provide the money. We are one of the top half a dozen powers and the world is going to bow down to us.
It's Simple: Just ask the so called Difa-e-Pakistan & J.I. like parties who were on U.S. Payroll long enough and now not anymore and in retaliation they want to promote Extremism in Pakistan & Afghanistan to not just pay for the Dam but start some economic plan after their funding from Middle East and overseas Muslim will soon going to be cut to pay for Nato Route, Got it?How can one construct dam in a territory which belongs to India? How can one expect permission at first hand?
How can Pakistan construct dam on Indian occupied territory? I am not sure how come one is expecting any kind of approval from Govt. of India?
What happens to the thousands of poor people who are forcefully thrown out, their lands forceflly taken, their livelihood destroyed, and the unaccounted loss of nature, environment? The downstream river would be dead causing immense damage if this dam is made. Are we behaving like the chinese who dont care about citizens or environment? Good to know it is stopped
WB pays attention to what USA thinks. Keep watching other developments.
Why doesn't the World Bank just read the Indus Water Treaty, there is NO dispute here as India and Pakistan have agreed the matter in the treaty the World Bank itself brokered!!
And America's epic support for democracy in Pakistan continues!! Uncle Sam clearly has no shame.