Sindh opposes rushed approval of Rs1.1tr canal network package

Sindh, on Wednesday, opposed a highly questionable and sudden joint move by the federal government and the Water and Power Development Authority to secure approval for a roughly Rs1.1 trillion development package for constructing canal networks.

The development unfolded during a meeting of the Executive Committee of the National Economic Council (ECNEC), according to officials of the Planning Ministry.

Wapda presented the Master Plan for the Rs1.1 trillion Canals Network package at the ECNEC meeting without first securing the requisite endorsements from the Planning Commission and the Water Resources Ministry. Wapda was backed by ECNEC Chairperson Dr Shamshad Akhtar.

Attendees of the meeting told The Express Tribune that the package included construction of more than half a dozen canals, some of which were highly controversial, such as the Greater Thal Canal.

Sindh has long opposed the construction of some of these canals due to their adverse impact on the province’s water share. Some of these projects included in the package had separate approvals, but Wapda bundled them with those not yet approved by all competent forums.

ECNEC members were largely uninformed when Wapda introduced the proposal, backed by Finance Minister Dr Shamshad Akhtar, according to a cabinet member. In response, Sindh Revenue Minister Younus Dagha opposed the proposal, particularly objecting to the Greater Thal Canal project.

Dagha’s main objection was to the Greater Thal Canal project, said sources.

Wapda’s proposal also violated the commitment given to the International Monetary Fund and an Act of Parliament that requires thorough scrutiny of such proposals, said a senior planning ministry official.

During the meeting, the planning minister and planning secretary did not object to violations committed by Wapda. Sources said that at one point, the finance minister stated that she would conditionally approve the master plan.

The reasons for expediting ECNEC proceedings were unclear, especially as the interim government planned another ECNEC meeting next week after the general elections.

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A late-night press release by the finance ministry stated that “the summary of Ministry of Planning Development and Special Initiatives regarding Development of National Irrigation Network for Green Pakistan Initiative was discussed in detail with the submission to Ministry of Water Resources and Provinces to allocate priority to strategic canals in accordance with National Water Policy”.

The finance ministry further stated that “Greater Thal Canal Project (Phase II) was also discussed, on which the government of Sindh showed its concerns”.

The ECNEC directed the government of Sindh to present its views regarding techno-economic viability of the Greater Thal Canal (Phase II) project to the Council of Common Interest. “The forum gave approval of the Greater Thal Canal (Phase II) project, subject to approval of the CCI,” the finance ministry added.

The ECNEC approved increasing the cost of ongoing projects funded through the Public Sector Development Programme by 6% to compensate contractors against inflation. The 6% increase will dent the budget by Rs168 billion, despite approved projects already having the option to make adjustments against inflationary pressures.

The ECNEC was told that after a series of meetings, it has been recommended that the price adjustment formula will be applied on a case-to-case basis, with a financial impact of at least Rs168 billion.

The Constructors Association of Pakistan (CAP) and Association of Consulting Engineers Pakistan (ACEP) complained about the unprecedented inflation and recession of the economy in the country, coupled with the COVID-19 pandemic outbreak since January 2020.

They claimed that this unprecedented situation has crippled construction activities in the country and cast negative effects on the Engineering Consultancy Sector. The Pakistan Engineering Council (PEC) notified its document on September 19, 2022, to address the price adjustment in ongoing contracts, August-2022 due to an unprecedented price hike.

Published in The Express Tribune, February 8^th, 2024.

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