Pakistan asks for $2.5 billion each from the two lenders.
ILLUSTRATION: FAIZAN DAWOOD
A move by the Asian Development Bank to bring World Bank on board for co-financing Diamer Bhasha Dam backfired when the World Bank instead asked the ADB to first seek a no-objection certificate from India – a condition that has derailed the project.
The ADB has so far faced criticism for asking for Indian NOC at the eleventh hour when Pakistan has already met agreed prerequisites. Background discussions with officials of multilateral lenders and Pakistani officials concerned revealed that it was actually the World Bank that set the condition of NOC and also asked the ADB to press for the same.
The plan was to seek $2.5 billion each from the ADB, Pakistan’s largest creditor, and the World Bank, the second largest creditor.
“The ADB will never itself impose a condition that is tantamount to undermining sovereignty of the country and seems stupid,” said an official requesting anonymity. He said the ADB was trying to manage the situation and resisting World Bank pressure.
Compared to initial estimates of $11.2 billion, the revised cost of Diamer Bhasha Dam is touching $14 billion with construction work yet to start. Lately, Japan has come forward with a $4 billion package for procurement of machinery, but still the lead financier is missing.
At a time when the ADB was taking up the matter with the World Bank, Pakistan and India had already locked horns over Delhi’s move to divert water to generate electricity. Pakistan invoked an arbitration clause of the Indus Waters Treaty after both the countries failed to resolve disputes over Baglihar and Kishanganga hydropower projects.
Last week, Pakistan lost Kishanganga case in the court of arbitration. The Indus Waters Treaty, inked between India and Pakistan, provides for appointment of a neutral expert by the World Bank as a last option to resolve water disputes between the two countries.
According to another official, the Indian lobby in the World Bank actually prevailed over the management that placed the NOC condition. The bank took the position that since it was an arbitrator between India and Pakistan, financing for Diamer Bhasha Dam would compromise its position.
The ADB has managed to get its board of directors approve a couple of projects in Azad Jammu and Kashmir and insists that it can do the same when the need arises. Yet, it does not solve the equation.
The other day, the ADB’s Director of Energy Division of the Central and West Asia Department, Rune Stroem, stated that right now Pakistan does not have the needed fiscal space to finance mega projects like Diamer Bhasha Dam. Furthermore, the energy sector over the last few years has rotten away and financing of such projects should be seen in broader macroeconomic perspectives.
The way the government has handled the construction of Neelum Jhelum hydropower project, which is far smaller compared to Diamer Bhasha, has further made the ADB wary.
Owing to delays and kickbacks in award of contracts for procurements, the cost of the project has ballooned from Rs84.5 billion to a staggering Rs274.8 billion. ADB officials said the bank did not want to finance a project which remains incomplete after years.
What is going on between the two international lenders does not absolve the government of its responsibilities. Officials said the government could have fought back against the Indian lobby by approaching the Americans who have expressed interest in financing the dam.
Published in The Express Tribune, March 1st, 2013.
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1719053250-0/BeFunky-collage-(5)1719053250-0-270x192.webp "non solar consumers bear rs200b burden")
Why wait , start building dams on self finance . And get some from bank time to time to keep building . In 5 to 20 years . At least we'll have the dam . So start building .
The last user has the first right on water . Every one has rights . Why fight and tussle @Vishnu Dutta:
If Bhasha is for usd14bln than mangla and tarbela assets are worth usd 100bln
pakistan should ask WB and IMF to mortgage the two and inject USD 25bln in the next five year plan
@Burhan: If you have read some of my comments on various solar energy projects in Pakistan you would not be adding arrogance to your ignorance. I have 20+ years of experience in all aspects of solar power, from manufacturing of silicon and solar cells to installation of systems. To clear your ignorance please read on the cost of the solar lights recently distributed by Punjab government. Here is the link: http://tribune.com.pk/story/500331/ujala-programme-bahawalpur-students-get-15000-lamps/
This is most likely a 10 watt module, at the most a 20 watt solar module, with probably a 5-6 watt LED. It costs Rs. 12000 or USD 120. Approximately 50% of the system is the cost of solar modules, i.e. USD 60 for at the most a 20 watt solar module which makes the cost of solar module USD 3.00 per watt. I won't be surprised if it is just a 5 watt module with a 3 watt LED as many would have made lot of money in this program. Larger modules cost much less per watt but it is still around $1.50 per watt and you are quoting $0.10 per watt. What to say of your ignorance !!!! Even double Shah claimed to double only not coming up with a price which is 15 time less than actual. At $0.10 per watt, it is almost free electricity. Just try to calculate the cost per unit, if you have the knowledge you claim.
@Vectra: How much are you paid for this false propaganda? Illegal invaders, aggressors and occupiers. You did the same in Kashmir, Hyderabad, Junagadh, Daman and Diu. India that gives a damn to international law. Talks of power all the time. See your cities. You do not have an alternate route in a city. Look at the conditions in almost all cities and you are going to the moon instead of providing roads and infrastructure to people. You spend on defence and never on the poor people of India.
@Raj - USA: I cant help your ignorance.
@gullu.jaan: You have the cash to give me? I am not a politician that I will run away to Saudi or Dubai in times bad. So I will be around.
@ABKhan: yes dear we dont read INDIAN news. as in ur news much more related to INDIA. and Indian news there is no ur name n we love to hate u ;)
IWT 1961 prohibits dams building by india in indus jehlum and chenab river.paksitan gave two rivers to india the Ravi and Sutlej.
so india should not mess things and make this region unstable,
@Jat:
You are very right,they have no means to finance it
@Burhan: "The right of water is of the country in the lower reaches" Both the countries be in the upper and lower riparian have the right to water of the rivers.
. @ Burhan ; "So India is violating an International Law by building dams in the upper reaches. India must dismantle all those illegal dams and let the water flow into Pakistan as per the existing treaties if not the international law which any ways India gives scant respect to."
riparian water rights is a principle based on English common law which is accepted by many countries . There is no codified International law on it ( acceptable to all). Hence the Indus Water Treaties came into existence after brokering by World Bank ( with prolonged discussions hitches, stumbling bloc) . The treaty has the provisions for construction of dams. canals for the upper riparian ( India)with mandatory clause to inform the lower riparian in advance. India adhered to it. The Baglihar dam's construction was stopped for years due to objection of Pakistan.> Pakistan went to third party Arbitrator (in case of dispute ) on the matter of Kishanganga dam which finally went in India's favour. keeping in tact the water flow meant for Pakistan So how can you say( it is unfair) that India did not respect the IWT or International law/ principles.?
@Burhan: "Just give me 32,000 acres of waste land in each province and I will increase the power generating capacity by 20,000 MW ie 20GW. Total cost for four plants each of $ half billion will not exceed 2 billion dollars."
the project cost of solar power plant for one MW (excluding land cost) is 3 million USD per MW. At this cost solar power plant of 1000 MW is commissioned in Gujrat (India) using the canal top ( which eliminated the fresh land requirement). At this rate 60 billion USD will be required for 20000 MW solar power project. . I am afraid your calculation is wrong somewhere..
@Gary: @Foreign Leg:
You can always choose to ignore my comment(s).
We can be goody goody Indians and let ourselves be ruled by handful of foreign invaders for another 1000 years OR we can learn to fight for our freedom, our motherland, our resources and our future.
@Jat: "Every now and then gp65 tends to forget on which side her heart lies. Pakistani river, my foot !"
Ha, those are harsh words my friend.
@nadia: "being the lower raparian as per international law, Pakistan dioesnot need any NOC from India regarding building a dam."
The NOC is not because of IWT, it is because Gilgit is disputed territory. You may say well so is J&K why is the World Bank not asking India for an NOC and the answer is - India did not go to WB to get funding for the dam. Get your facts.
@Foreign Leg: Thank you. I wasn't planning to get into a flame war though because with rare exceptions, I ignore ad hominem attacks - unless I see a pattern with some people. My heart beats for India and I know that is true about @Jat as well.
@G. Din: "Please be careful not to characterize these rivers as “Pakistani”. They are not Pakistani. The waters flowing in these rivers have been designated for Pakistan’s use."
You are correct of course. What I meant was that the accusations frequently made by Pakistanis that by building Kishenganga India was diverting water meant for Pakistan's use to Indian lands was incorrect. I certainly could have phrased it better.
@Burhan: "So India is violating an International Law by building dams in the upper reaches. India must dismantle all those illegal dams and let the water flow into Pakistan as per the existing treaties if not the international law which any ways India gives scant respect to. "
This is exactly what Pakistan contended and international arbitration courts validated India's stand of building the dams. There is nothing so far that the neutral arbitration courts have indicated that would lead us to conclude that India violated the treaty. SO what is the basis of your conclusion?
@Naveen: Ouch, snap, you destroyed @nadia's argument in one fell swoop!
@Burhan: Really. Now you remember international laws. The most important international law says that you cannot declare proxy war against a sovereign country. You cannot push terrorists in other country and kill thousands. You cannot pick and chose which law you want to obey.
Comment section full of Indian trolls as usual. I wonder if they keep any news of their own country too
@vasan: Actually I being an Indian was thinking on almost same lines. When cricket world cup comes for subcontinent to organise, all 4 countries are able to divide the matches between themselves and conduct the world cup well,( I know it could not involve Pakistan last time but that was due to terrorism image in rest of the world who would have refused to visit Pakistan for matches.), So why both these countries not talk to each other and build all the dams these both countries require. Why keep using the IWT treaty to fight that it allows this or that. If there were talks on Neelam/KishenGanga, both dams would have spent far less and would have been built on the main stream without diverting any water whatsoever and also with the provision of silt clearing. Trust is missing and belligerence and defiance rule the talks. It is sad to waste money in unutilised capacities of both these dams given how tough it is to organise finance.
@nadia: - It is the financiers to the project who are insisting NOC from India because of dispute on the territory( where dam is is proposed) and not because of Pakistan being in the lower riparian
@Jat: That was rude as usual but misdirected. We all know where her heart lies, so let us not add fuel to the fire. . @vasan: You are partially right. Because you did not understand that Pakistan's biggest fear as a lower riparian state is that India can control the water supply in the event of war, not the diversion of waters from one river to the other, though it does put paid the Neelum-Jhelum project in Pakistan to a certain extent. . The solution is simple. No more military adventurism. That is the only way we can have lasting peace in the subcontinent.
@G. Din: @gp65: “… the water is being diverted from one Pakistani river (Neelum) to another Pakistani river (Jhelum). “ Please be careful not to characterize these rivers as “Pakistani”. They are not Pakistani.
Every now and then gp65 tends to forget on which side her heart lies. Pakistani river, my foot !
@nadia: What will Pakistan do if India stops flow of water into Pakistan?
@Peer Sain I am not here to create propaganda but only states facts which except pakistan is recognised by the entire world some recognition is done openly and some hidden.Here is some contradictory point against your statement. 1st "It has occupied part of it by force against the wishes of its people "More people going to cast vote yoy including some separatist. 2nd "The people of Kashmir will decide. India will not but the world will find a peaceful democratic solution and India will have to abide by it" It is Government of India which is supreme but yes kashmir population will be taken on board.As far as world is concerned they are on India's favour that is why they are constantly rejecting pakistans request for intervention even UN doesn't give much importance and statement regarding kashmir as earlier.All these are because of world community no longer interested in kashmir issue and simla agreement made the task easy. 3rd "All the dams that India has made are illegal" But ICT thinks otherwise. 4th "Since when Kashmir has become Indian territory?" Since 1947 from the day 1 when the Letter of Accession was handed over to India tha Maharaja of kashmir.Accept or reject that your choice but that Letter of Accession is a part of Indian constitution under which entire J & K including POK is India's territory.pakistan have to vacate POK anytime sooner or later no other choice.
@Burhan: You are claiming that you can build a 20 GW (20 billion watts) solar electricity generating plant for $2 billion. That is 10 US cents per watt or Pakistan Rs.10 per watt. Where do you get these strange figures?
@Burhan: "@Vishnu Dutta: What nonsense. The lower riparian has the first right to water as per international law. " Like ManMohan Singh's proclamation:"Muslims of India have the right to the first piece of the Indian pie which was created almost entirely by the non-Muslims? Quote some references to that "International law".
@SKChadha: "India should grant NOC for all dams in its de jure territory …?" Any particular reasons for this generosity except Punjabi affinity?
World Bank and ADB also have to take into account if Pakistan will exist 10 or 15 years from now. The way FDI is falling how on earth will Pakistanis return this huge loan ? Every Pakistani child born henceforth will be wholly indebted to the World Bank and its master.
@gp65: "... the water is being diverted from one Pakistani river (Neelum) to another Pakistani river (Jhelum). " Please be careful not to characterize these rivers as "Pakistani". They are not Pakistani. The waters flowing in these rivers have been designated for Pakistan's use. There is a difference. Because Pakistan does not own these rivers, its right to interfere in what India constructs on these rivers has been rebuffed by the arbitrators time and again. In the latest case, too, the right to question the Indian diversion of waters was quashed which proves what Pakistan should be concerned only with is that the quantum of water it receives through these rivers where they enter Pakistan remains undiminished, except for what is provided for in the IWT.
@Burhan: where to find you after giving you the cash?
@nadia: India didn't sought NOC from Pakistan because it doesn't need WB to fund its dams.
@hasan: you lost as usual.
@Vishnu Dutta: What nonsense. The lower riparian has the first right to water as per international law. Now India gives two hoots to international law as always. May be so but it is not right. Do dont talk rubbish please. Know the law first. India is giving no water.
@Aarvey: Are you trying to be sarcastic? That was a fraud. If you are ignorant like the rest in Pakistan does not mean the technology does not exist. The technology is there in Spain, Morocco, United States and India which is availing itself of three such plants of 5,000 MW each. Ignorant people should not be writing here - comparing a real solution to a fraud. Shame on you.
@ Nadia is on the dot.
@Vectra What rubbish. Since when Kashmir has become Indian territory? It has occupied part of it by force against the wishes of its people. The people of Kashmir will decide. India will not but the world will find a peaceful democratic solution and India will have to abide by it. All the dams that India has made are illegal as Burhan writes above. Vectra is totally wrong on so many counts. Sorry your statements cannot be accepted. It is either a figment of imagination or you are doing propaganda for India.
@Burhan: You sound like the brilliant guy in Pakistan who ran his car on water. All the best in your endeavours.
The right of water is of the country in the lower reaches. So India is violating an International Law by building dams in the upper reaches. India must dismantle all those illegal dams and let the water flow into Pakistan as per the existing treaties if not the international law which any ways India gives scant respect to.
Now Bhasha dam if it is for electricity is a stupid idea. In the press it was earlier reported that it is for generating 4,500 MW of electricity for US$ 8 billion. Now it seems the figures are in the vicinity of 15 billion already. If it is for irrigation this money is justified. Electricity is a byproduct. But if it is for generation about 5,000 MW of electricity then no. I believe since the site is too hilly canals can not be taken out.
Better alternative is to go for a Solar plant that will give you free electricity for as little as half a billion dollars. It also takes much lesser time. Just give me 32,000 acres of waste land in each province and I will increase the power generating capacity by 20,000 MW ie 20GW. Total cost for four plants each of $ half billion will not exceed 2 billion dollars.
How about that?
@Zaida P: India is giving water to Pakistan, so it makes sense for every dam pakistan seeks India's NOC. Why do people take it granted that India must always give free water to Pakistan.
@syed baqar ahsan:
You mean Muslims give Oil and Money? Wow......
@syed baqar ahsan: "Very strange India voileting Indus Basin Treaty " India has never violated the Indus Water treaty even during times of war. For 15 years work on BAglihar construction was brought to a halt due to Pakistani objections and it was resumed only after India won the case in an international arbotration that Paistan initiated. Same thing about Kishenganga dam where also the court has ruled in favour of India's right to build the dam. You should also be aware that while you are told that building the dam will lead to diversion of water, what you are not told is that the water is being diverted from one Pakistani river (Neelum) to another Pakistani river (Jhelum). The water is not diverted to Indian lands.
@rahul: Raghu Ram Rajan was the Chief Economist to IMF between 2003-2006. He is not the current Cheif Economist. Currently he works for the government of India as the Chief Economic Adviser. This is just fyi.
Few days ago we read India lost Pakistan won on Pakistani newspapers. Now, it is turning out its the opposite.
Not only that, by invoking arbitration and falsely charging India of violating the IWT, which clearly India has not done, you have managed to anger the one entity which can make sure water will flow into Pakistan smoothly.
Great going!
@Thomas: Not sure if it is the IWT or whether the dam is located in G-B which is a disputed region. It is a good sign that India is being more assertive when it comes to her interests.
India should grant NOC for all dams in its de jure territory ...?
'Kaushik basu' who was our previous Chief Economic Advisor is now "Economic advisor" to World Bank. Raghuram Ranjan who is the current Chief Economic Advisor is "Chief Economist" to IMF. So pakistan will find Indians everwhere at top post. So its better not take any decision against India.
Very strange India voileting Indus Basin Treaty every minute go by and now WB asking to obtain NOC to build Basha Dam.IMF,WB,ADB are made out of Muslims oil money and always used by Americans to twist arm of his so called ally or friend.For decades saying and bluffing to solve our ENERGY problem but never did and now Iran-PAK gas line paining them.
Punching above your weight is hazardous and Pakistan never learns. Having nukes is like tying a grenade to your chest - you'll never know if you won or lost the fight. The secret is to have an economy that is strong and growing.
"Officials said the government could have fought back against the Indian lobby by approaching the Americans who have expressed interest in financing the dam." +++++++++++++++++++++++++++++++++++ American interest....still after signing the IP deal with Iran?:)
Last week, Pakistan lost Kishanganga case in the court of arbitration
This is the wrong impression. Pakistan did not lose the case nor India won the case. The only point accepted was India's right to divert water from one tributary to another. But India is also directed not to divert fully and allow a minimum quantity to pass thru. This will put the dam built by India under utilized. One more point mentioned in the preliminary award is about draw down below min level for silt clearing. While the neutral expert accepted that this is a reality and allowed India to build accordingly, the court of arbitration has stopped this practice but only in the dams to be built henceforth. This is a point to Pakistan's liking. Given these kinds of tedious practices, It is in the interest of pakistan to negotiate with India so that it can purchase certain percentage of electricity from each dam from India at an agreed price for every dam to be built by India instead of wasting money and time.
This is classic example of "Hoar Chooppo"
@Pan Mat: Why did you only read the headlines AND NOT THE STORY THAT FOLLOWED?
What does this explain? Stop begging, tax the rich and utilize the immense remittances sent by OSP's and build the dam yourself
So what about the headlines claiming victory for Pakistan and its moral stand endorsed by a neutral body. Does any agency ever tell the truth to common Pakistani folks?
Tit for tat from India to Pak. Let the abuses on India begin....
If we are consistent on staying incompetent and letting projects overrun from Rs. 84.5 billion to Rs. 274.8 billion, such things will happen. Instead of finding people to finance, we need to pay back our loans. A country built on loans and owed interest would be too flimsy for future endeavors.
"Owing to delays and kickbacks in award of contracts for procurements, the cost of the project has ballooned from Rs84.5 billion to a staggering Rs274.8 billion........."
Why press will not write about these delays and expose those involve in kickbacks. Whole nation suffers because of few opportunists. They must be exposed and punished.