Key project: Islamabad approaches World Bank for Dasu Dam

Published: November 5, 2013
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As the WB was more than willing to finance the Dasu project over the 4,500-MW Diamer Bhasha dam, it immediately started the process and an appraisal mission of the WB is already in town, according to sources in WAPDA. DESIGN: TALHA AHMED KHAN

As the WB was more than willing to finance the Dasu project over the 4,500-MW Diamer Bhasha dam, it immediately started the process and an appraisal mission of the WB is already in town, according to sources in WAPDA. DESIGN: TALHA AHMED KHAN

ISLAMABAD: 

Pakistan has put the Diamer Bhasha dam on the back burner and approached the World Bank (WB) to finance the $7.5 billion, 4,320-megawatt (MW) Dasu hydropower project, conceding to a major demand by international lenders who were reluctant to fund the Diamer Bhasha project.

The federal government wrote last month to the Washington-based lending agency to start the process for the approval of a $700 million loan for the Dasu hydropower project, according to sources in the Ministry of Finance.

The letter was sent to the WB by the Economic Affairs Division (EAD), marking the beginning of a departure from the current government’s stated policy of first building Diamer Bhasha and then starting work on Dasu. An official of the EAD confirmed that the government approached the WB to finance the project.

As the WB was more than willing to finance the Dasu project over the 4,500-MW Diamer Bhasha dam, it immediately started the process and an appraisal mission of the WB is already in town, according to sources in Water and Power Development Authority (Wapda). The mission will hold wrap-up meetings in Islamabad this week and decide a date for presenting the project in front of the Board of Directors of the WB to approve a $700million loan, the sources said.

The WB loan is for the upfront cost of the project, compensation for the affected population, resettlement plans and pre-construction activities, the sources said. Usually, such activities are funded through domestic resources as these activities have low or no rate of return at all. This highlights the WB’s eagerness to fund the Dasu project at the expense of Diamer Bhasha.

The site of Dasu power project is 74 kilometers (km) downstream of the Diamer Bhasha dam and 350 km from Islamabad. The feasibility study and detailed engineering designs of the project were already completed and tender documents ready to be issued, the sources said.

Over the past several years, the WB kept refusing to finance the Diamer Bhasha dam, requesting a no-objection certificate from India first. After the WB’s refusal, the Asian Development Bank (ADB) too attached many conditions, including seeking a consensus resolution from the Council of Common Interests before asking for loan for the $14 billion Diamer Bhasha dam. Recently the ADB raised resettlement and environmental issues resulting from the construction of the dam.

The WB country office confirmed that the work on approving the loan for Dasu project was underway.

The international lenders were of the view that it would be difficult for them to finance the Diamer project due to the huge financing required. They argued that work on Dasu could be completed in four phases with initial funding through loans in the first phase, while the rest of the work can be completed by Pakistan.

The Planning Commission has already received a PC-I form for approving the project for land acquisition for the Dasu project, confirmed Planning Commission spokesperson Asif Sheikh. The commission has not yet critically reviewed the PC-I form but the water and power ministry has put the initial land acquisition cost at Rs74 billion.

Rana Assad Amin, spokesman for the Finance Ministry, said that initiating work on Dasu would not mean that the government has abandoned the Diamer Bhasha project. He claimed that the government will implement both projects simultaneously.

To a question on arranging up to $25 billion funds for carrying on activities simultaneously, Amin said the Dasu project will be completed in eight years while Daimer project would take at least 10 to 12 years, allowing Pakistan more time to raise funds.

Published in The Express Tribune, November 5th, 2013.

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Reader Comments (22)

  • Saleem Hatoum
    Nov 5, 2013 - 2:47AM

    Why can’t the govt ask the people of Pakistan to put up the money to build dams.

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  • EL CHOR
    Nov 5, 2013 - 3:21AM

    Only NS will provide brighter future to Nation.
    Others are too busy supporting Talibs and fighting Nato.

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  • Babloo
    Nov 5, 2013 - 3:24AM

    Islamabad approaches US for Dollars, China for building Gwadar and nuclear weapons, Iran for financing and building gas pipeline , Saudi for subsidized oil and WB, IMF for building dams.

    Does Pakistan build and finance anything by itself ?

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  • londonistani
    Nov 5, 2013 - 5:49AM

    @Saleem Hatoum:
    because people of pakistan are not willing to pay electricity at production cost, let alone finance this mammoth project which is ofcourse good for the country.

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  • Nov 5, 2013 - 5:51AM

    I would like to see both these plus other dams built. The natural resources of Pakistan should fully utilized to generate another 45,000 MW of hydroelectric electricity. Hope for the best for achieving the required loan.

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  • Justice
    Nov 5, 2013 - 6:49AM

    @Saleem Hatoum:
    duh, cause that money will go in the pocket of the ‘government’..common sense bro

    Recommend

  • M. Emad
    Nov 5, 2013 - 7:00AM

    Pakistan now better try signing long term ‘pipeline drinking water’ treaty with India. A few years later it will be a lost chance like Kashmir.

    Recommend

  • Xnain
    Nov 5, 2013 - 8:10AM

    @Saleem Hatoum:
    Those who evade taxes, how can you expect money from them?

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  • Muhammad Mudassar
    Nov 5, 2013 - 9:23AM

    These multilateral agencies our just wasting our time each day we loose shall increase the cost of the projects as well as the conditions attached to it. Why dont we ask the Overseas Pakistanis which are sendng around 14 Billion US Dollars a year which is increasing year on year to only invest that 5% of this amount in our Dam project it wil provide us 700 million dollars a year for 10 years makes 7 billon dollar in next 10 years. If we go to banks we have to give them interest ay way why not give the profit to our overseas Pakistani which will invest in these projects.

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  • Umair
    Nov 5, 2013 - 9:42AM

    We already are. Every household electricity connection has been paying a fixed rate to gather funds for Diamer Basha for almost two years now. Interesting question is, where has all that money gone?

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  • Shakil Ahmed
    Nov 5, 2013 - 9:49AM

    this is called micky mouse funding for nothing on the ground, the work on Diamer has already been started! The new gimmick and no real work will be carried out by World Bank consultants and much of the loan goes back to US and World Bank in the name of feasibility studies of the project, at the end of the this phase this government will be gone, most of the real work still pending on both projects! So Pakistan will successfully delayed much needed power projects!

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  • Viji
    Nov 5, 2013 - 10:03AM

    The WB is not a charity that pakistani government thinks about.Even the closest ally china does not like to invest any more, as they know that money will ultimately go to drain.

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  • polpot
    Nov 5, 2013 - 10:04AM

    @Babloo: “Does Pakistan build and finance anything by itself ?”
    +++++++++++++++++++++++++++++++++
    Yes Epicenter of Global Terror.

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  • Vijay
    Nov 5, 2013 - 10:27AM

    @Babloo: Then they say India is poor country and Pakistan is rich

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  • Vijay
    Nov 5, 2013 - 10:30AM

    @Umair: Money has gone to your strategic asset.

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  • polpot
    Nov 5, 2013 - 3:13PM

    “vhe Dasu project will be completed in eight years while Daimer project would take at least 10 to 12 years,'”
    ++++++++++++++++++++++++++++++++++++++++++++++++++
    Starting when?

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  • Stop
    Nov 5, 2013 - 6:28PM

    When are we gonna stop being beggars. IK rightly said. Beggars ki koi izzat nahi hoti.Recommend

  • Nov 5, 2013 - 6:52PM

    @Babloo: Pakistan only knows how to beg for loans, aid, and grants without collecting taxes. Salams

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  • don
    Nov 5, 2013 - 7:13PM

    @M. Emad:
    We will get kashmir anyhow understand

    Recommend

  • sure?
    Nov 5, 2013 - 11:11PM

    @Saleem Hatoum: “Building a dam is not a chanda drive. If people pay their income tax honestly and the government reviews its ‘defense’ expenses, it will money to invest in infrastructure projects like this one.

    But less than 1% of people in Pakistan pay income tax.

    Recommend

  • TUNG
    Nov 5, 2013 - 11:49PM

    we dont like to pay taxes yet we ask the world to build things for us!shame

    Recommend

  • B
    Nov 6, 2013 - 12:51AM

    They only need US$7.50 billion for this project (lasting 10-15 years)? Well if I was their Financial Minister, I can raise this amount very easily. Just remove US$700 million from the Defence each year (statically based on 2013 budget) and presto, you have yourself completed it without begging.

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