By Khalid Mustafa
The News (Pakistan), November 10, 2010
ISLAMABAD: In a major development, the World Bank, which had earlier
refused to provide funding for the Diamer-Bhasha Dam, arguing it was
situated in a disputed area as claimed by India, has now given
indications that it is ready to provide financing for some components of
the mega project. The Asian Development Bank, however, will continue to
be the biggest donor, Wapda Chairman Shakil Durrani told The News in an
exclusive interview.
"During the recent Pak-US Strategic Dialogue in Washington, we received
some signals from the World Bank's top management that it was ready to
provide finances for some components of the mega project," he said.
He said with the completion of this project, having live storage
capacity of 6.4 MAF and electricity generating capacity of 4,500MW,
Pakistan will get the dividends of $1.5 billion per annum in the shape
of cheap hydro power and half-a-billion dollars in the shape of water
storage that will be used for irrigating more land.
Till the repayment of the loans, he said, the hydro generation cost will
be hovering between 6-7 cents per unit and after retirement of the
entire loans, the cost will drastically tumble to just 2 cents per unit.
The World Bank, Durrani said, was also extending $700 million for
installing two turbines at the Tarbela Dam, which will enhance power
generation significantly. "We have scrutinised the world class
consultants, who will be assigned to design the project within 48 months."
When asked why the World Bank had refused to provide funding for the
Bhasha Dam, the Wapda chairman said it would be better to ask the Bank.
Asked if the US had agreed to provide funding for strengthening of water
infrastructure in Pakistan, Durrani said that Washington had committed
to providing funding of $40 million for Gomal Zam Dam and $20 million
for the Satpara Dam. And $17 million have been released for the Tarbela
Dam under $125 million assistance that Hillary Clinton made during her
visit to Pakistan.
"With the US funding, all generators in the Tarbela Dam will be
repaired, which will increase power generation by 80MW." Under the same
programme, three power generation companies will also be upgraded,
ensuring an increase of 400MW of electricity in the system. "Besides,
the US assistance will also be used in upgrading motors of 1,100
tubewells across the country."
The Wapda chairman pointed out that the country possessed the potential
to produce 100,000 MW of hydropower as per new studies. "Earlier,
estimates had put the potential capacity at 56,000 MW," he said.
"We have carved out a plan that will be initiated in the next five years
to harness hydro generation up to 20,000MW." He mentioned that the
country could get the cheapest 7,000MW of electricity from the Bunji Dam
and 4,300MW by constructing the Dasu Dam. Through completion of the
Neelum-Jehlum hydropower project, the country will get an additional
969MW and a further 1,100MW by constructing the Kohala hydropower project.
The Bunji Dam will be completed at a cost of $10-11 billion and the
Central Development Working Party (CDWP) has accorded approval to the
feasibility study of the project under which a 3-kilometre tunnel will
be excavated to ensure protection to the dam in case of an earthquake.
Coming to the $11.3 billion Diamer-Bhasha Dam, Durrani disclosed: "We
have almost completed the four safeguards (terms and conditions) of the
Manila-based Asian Development Bank to qualify for its credit line for
the mega project."
The ADB had set four conditions to fund the project that include: 1)
seeking national consensus for the Diamer-Bhasha Dam; ii) assurance in
procurement transparency in line with the procurement rules of WB and
ADB; iii) No forcible acquisition of land for the project and iv) the
resettlement action plan to the satisfaction of the ADB.
Durrani said that the CCI had approved the project with consensus and no
federating unit had any objection to the project. Even Gilgit-Baltistan
has raised no objection. "We have assured transparency in procurements,
which will be in line with the procurement laws of WB and ADB."
He said the ADB had sought the report of resettlement issue that they
had prepared. A panel of consultants will examine and fine-tune it. "To
this effect, ADB will send its fact-finding mission to examine the
report. Prequalification of various contractors and consultants will be
made next year."
Durrani also disclosed that Wapda was going to launch the Sukuk bond of
Rs 10 billion every year for four years to generate Rs 40 billion that
will be used for acquisition of land. The government has earmarked Rs 5
billion for land acquisition for the current fiscal.
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