Gilgit-Baltistan: Government plans changes in royalty, resettlement cost formula

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ISLAMABAD (Dawn): The government is considering preparing the formulae for sharing of royalties and resettlement costs of the proposed water reservoirs, including the Diamer-Bhasha dam, in such a manner that the people displaced by the projects benefit most from them.

Although the government has yet to come up with a clear formula on how the royalties and resettlement costs should be shared by the major stakeholders (the federation and provincial governments) the authorities now plan to make the resettled people “the first beneficiaries” of the upcoming projects, according to sources.

These ideas would be deliberated upon in detail during a US-Pak strategic dialogue on water sector reforms and international lending, scheduled to begin on Nov 2 in Islamabad. Minister for Water and Power Syed Naveed Qamar and US undersecretary Maria Otero will lead their respective teams.

The federal government plans to utilise the forum of Council of Common Interests to suggest constitutional changes to the parliament for approval, the sources said.

A supra-regulatory body, replacing the existing Indus River System Authority, may have to be put in place to deal with all water-related issues, from irrigation to urban uses and from wastewater management to construction of new dams and adoption of new watering techniques, they said.

A case under study is the revenue-sharing arrangements and their implementation in Brazil — considered as a modern satisfactory model — where 6 per cent of gross revenues are allocated to the affected areas, with half going to the provinces and half to the municipalities with affected people.

Pakistan’s experience in Tarbela and Mangla resettlement and profit-sharing has been far from exemplary, although it improved of late in the case of Ghazi Barotha Hydropower Project. While tens of hundreds of the displaced persons from the sites of two dams continue to raise dissatisfaction over resettlement even after four decades, the profits arising out of Tarbela dam have benefited only Khyber Pakhtunkhwa, albeit with continued dissatisfaction in the province and increasing revenue threat to Wapda.

The policy-makers believe that a lacuna in the Constitution that promised profits to the province where power station is located has been one of the major hurdles in implementation of new mega projects because in most of the cases sacrifices of the people displaced by the projects by far outweighed the contribution of power houses.

“The benefits should be directly proportional to the sacrifices and cost-sharing,” a senior government official said, adding the provinces would also be convinced to bear investment costs in cash and kind (in terms of submerged land, displacements and investment contributions) to claim shares in profits or return on investment.

A senior government official said it was very important to ensure that local people and authorities welcome such mega projects which was possible only if there was a modern, transparent and fair approach to sharing royalties with affected provinces or regions and the local people and if there was a strong capacity for effective resettlement.

The fresh thinking has come in the wake of a “huge wish list” submitted by Islamabad to the Friends of Democratic Pakistan (FoDP) which many development lenders believed ‘was asking for too much’ and ‘if everything was a priority, nothing was a priority.’

The FoDP task force on water sector had advised the government for a rigorous attention to the sequencing of the project priorities, keep in mind the fact that current environment offered Pakistan ‘a limited political capital’ in the world capitals.

The sequencing has, therefore, been set around building of major reservoirs starting with Diamer-Bhasha at a cost of $11 billion, agricultural productivity enhancement at a cost of $1.5 billion, urban water and sanitation improvement at a cost of $1 billion, besides associated projects for flood management and improvement in knowledge base and human resource development.

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