Gilgit-Baltistan: ECC Decides to Facilitate ADB Lending to GB

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Islamabad (BR): Economic Co-ordination Committee (ECC) of the Cabinet has decided to treat Gilgit-Baltistan at par with AJ&K with regard to foreign re-lent loans aimed at facilitating approval of Asian Development Bank’s loan for two small hydropower projects, official sources told Business Recorder.

The decision was taken on the request of Chief Minister Gilgit-Baltistan who wrote a letter full of province’s woes to Finance Minister, Senator Ishaq Dar also the Chairman of the ECC.

Chief Minister, in his letter stated that the meeting for loan negotiation and its finalisation process with the ADB for two small hydropower projects (HPPs) of Gilgit Baltistan namely 26MW Shagharthang Skardu and 4MW Thack Chilas was convened on June 17, 2013 but was postponed due to the issue of relending and repayment of the loan by the GB government as per GoP policy for other provinces of Pakistan, as it was not included in the draft loan agreement earlier circulated for comments.

A meeting in the Ministry of KA&GB was held on June 25, 2015 chaired by the Secretary GBWPD and it was decided to move a summary for consideration of ECC regarding relaxation of the policy keeping in view the special status of GB.

Accordingly a summary was submitted by the Ministry of KA&GB to the ECC with the request that the GB projects be exempted from the condition of relending and repayment by the GB government and GoP may pick up the loans of GB projects for their repayment but unfortunately during the meeting on August 15, 2013 ECC rejected the proposal of KA&GB. GB government feels that the decision of ECC would adversely affect the hydropower development activities in GB due to its meager resources and the energy requirements of the poor people of GB would never be fulfilled and the dependence on fuel wood would also increase causing deforestation and environmental problems besides increasing poverty due to cutting of orchards and erosion of valuable cultivable lands.

Chief Minister GB requested that the ECC should review the decision of August 15, 2013 on the following grounds:- (i) ( GB does not possess a status equivalent to other constitutional provinces of Pakistan. The Self Governance and Empowerment Ordinance 2009 do not confer GB a status equivalent to other provinces. It is merely an administrative arrangement keeping in view the far flung locations of GB; (ii) GB has no indigenous financial resources and totally relies on the routine annual federal grant provided in shape of block provision to meet their development and non-development expenditures; (iii) The GB government has neither taxation outlay nor gets any share from the National Finance Award(NFC); (iv) The revenue returns from the sale of electricity produced from these projects will be meager due to the fact that the consumers will be mostly domestic subsistence users and there exist no industries and other load diversity like other provinces. However, it is a future vision to establish a regional grid and its further inter-connection to the national grid on availability for resources to promote private investment in the hydro sector to supply electricity to the national grid and contribute towards minimising the energy crisis in the country. In this way GB will also earn revenue on account of sale of energy to the national grid like other provinces and AJK; (v) GoP has not provided a single KW of electricity to GB since independence. All provinces ie KPK. Punjab, Sindh and Balochistan are connected to the national grid. Even AJ&K and FATA are connected to the national grid and all of them are enjoying equitable load shedding as per policy of the government. Wapda is a federal entity with the mandate to generate electricity and supply equitably to all the parts of the country on one grid yet GB is deprived. GB is neither connected to the national grid nor GoP has allocated any special funds in the past to resolve the energy issue of GB and the area is totally ignored; (vi) GB is developing its own micro and small hydropower projects to meet its energy demand from the block amount provided by the federal government on annual basis curtailing share of other important sectors such as education, health, water supply, irrigation, population planning etc whereas no other provinces utilise the block provision for development or energy projects, GB therefore deserve special dispensation; and (vii) the ECC decision is not in line with the GoP policy for equitable supply of electricity for the entire country as GB is not getting any electricity from the national grid whereas a huge amount on account of energy mix subsidy and circular debt is being borne by the GoP for other four provinces, AJK and FATA. GB therefore deserves special attention of GoP in the energy sector including exemption from repayment of loans of hydropower projects.

Gilgit- Baltistan government further stated that Asian Development Bank is ready to finance two projects of GB through REDSIP tranche-III for which umbrella agreement already stands signed with the GoP. Once this loan is availed for the GB projects it will be easier for GoP to get financing from international donors for other mega projects in GB territory such as Diamer Basha Dam and Bunji Dam on the same analogy.

Chief Minister GB requested that foreign funded projects in his province may be exempted from the condition of relending and repayment by the GB government and GoP may pick up the loans of GB projects for their repayment and ECC should review its decision of August 15, 2013 on compassionate grounds.

The sources said, Finance Minister as Chairman ECC approved the proposal of Chief Minister GB and tabled the case in the ECC in its meeting on July 4, 2014. The ECC also endorsed the decision of the Finance Minister which is as follows “in case of AJ&K, the Annual Development Program (ADP) is funded through Cash Development Loan (CDL)/ foreign relent loan. However, for debt servicing by AJ&K government, federal government makes necessary allocation in the budget as ‘ways and means advances’ and repayment principal/ mark-up are made by the federal government through book adjustment. The same mechanism may be adopted for foreign relent loans of Kashmir Affairs & Gilgit-Baltistan.”

Gilgit-Baltistan: Annual Budget of GB Worth 27.6 Billion Presented in GBLA

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GILGIT (ET): An annual budget of Rs.27.64 billion for fiscal year 2014-15 was presented in the Gilgit-Baltistan (G-B) Legislative Assembly on Monday.
Minister for Finance Mohammad Ali Akhtar delivered the budget speech in the assembly session chaired by G-B Assembly Speaker Wazir. The session was also attended by Chief Minister Mehdi Shah. It was the fifth budget under the governance of Pakistan Peoples Party (PPP).
The government has earmarked Rs9.6 billion for the development sector while Rs18 billion has been set aside for non-development expenditures: an increase of Rs3 billion since the last budget. The health and education sectors received Rs.810m each.

A 10% raise in government employee salaries was proposed and a minimum pension of Rs6,000 was suggested. Rs200.2 million for agriculture, Rs120 million for forests, Rs20.7 million for fisheries and Rs140 million for tourism were also set aside.
At the start of the proceedings, opposition lawmaker Nawaz Khan Naji stormed out of the house, terming the proceedings an exercise in futility while the only other opposition member present remained silent throughout proceedings.

Gilgit-Baltistan: Government Directed to Lift Ban on Gemstones Trade

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Gilgit (ET): On a point raised by Wazir Hasan of PPP, the speaker directed the government to lift the ban on trade of gemstone for residents of GB till laws are formulated by the assembly. “There is no justification to keep people associated with the gemstone business jobless in the name of making laws,” said the speaker.
Moreover, the speaker also directed the government to transfer Skardu DIG police for making derogatory remarks about the lawmakers. The DIG had allegedly warned a lawmaker from Baltistan, Sultan Ali, against “interfering in matters pertaining to police”.
Wazir Baig has sought details of Rs10 million sanctioned last year for sports and tourism.
“Tell me who pocketed the money. If I ask these questions, it is said I play the role of opposition,” said Baig, known for making blunt comments. He asked the minister for information to conduct an enquiry and submit a report to the house.

Gilgit-Baltistan: Five Year Tax Exemption for Setting up Processing Plants in GB

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Gilgit (APP): One of the Salient feature of the budget of 2014-15 is to help the locally grown fruits in Balochistan Province, Malakand Division, Gilgit-Baltistan and FATA reach the bigger markets and to promote investment, growth and employment in these areas, a five years income tax exemption is proposed for persons setting up processing plants for locally grown fruits.

Gilgit-Baltistan: Rs. 9.2 Billion Allocated for ongoing Projects in GB

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ISLAMABAD (APP): The government has allocated Rs. 21357.41 million for various ongoing and new development projects for Kashmir Affairs and Gilgit Baltistan under Public Sector Development Programme for 2014-15.
According to the official budgetary document, Rs 9230 million for Gilgit Baltistan have been earmarked for the ongoing schemes. The ongoing schemes of Gilgit Baltistan include Rs 8200 million for Gilgit Baltistan (Block Allocation), Rs 500 million for construction of 14 MW Hydel Power Project Naltar-III and Rs 300 million for construction of 14 MW Hydel Power Project Naltar-V.
The government has allocated Rs 400 million for execution of new schemes for Kashmir Affairs including Rs 100 million for Mir Waiz Muhammad Farooq Shaheed Medical College, Muzaffarabad. While Rs 50 million have been allocated to Gilgit Baltistan for new scheme of establishment of Regional Grid, Gilgit Baltistan.

Gilgit-Baltistan: Project to Enhance Quality of Various Fruits in GB

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GILGIT (ET): A recently initiated project aims to increase the quality and production of various fruits of Gilgit-Baltistan (G-B). “We have launched separate courses for apple, potato and apricot farming so farmers can better understand how to increase their yield,” said Muhammad Irfan, the project’s coordinator, while talking to journalists in Gilgit.

In this connection, renowned experts have been invited to train farmers in Ghizer, Gilgit, Hunza-Nagar and Bagrote – areas with comparatively better climatic conditions and potential for increased yield of fruits.

The project has been launched by Star Farm Pakistan, an agro-consultancy firm, with the support of USAID’s Small Grants and Ambassador’s Fund Programme, to improve quality and increase production of G-B’s key fruit species. “The soil here is fertile and best suited for mass production,” said Irfan, adding the produce can be increased considerably by helping farmers with technicalities.
Every year, a considerable volume of apple, potato and apricot is transported from G-B to other cities for export. However, a lack of modern techniques, incomplete utilisation of available resources and restricted market access are some of the obstacles farmers face in G-B.
The project would also help farmers improve packaging of fruits to link them with national and international markets. “We are sure this initiative will improve production as well as the economic condition of locals associated with farming,” said Irfan.

Gilgit-Baltistan: Progress on DBD Dam Reviewed by PM

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ISLAMABAD (BR): Prime Minister has said that the construction of Diamer-Bhasha Dam (DBD) will not only cater for energy requirements of the country but at the same time, it would be a source of development for Gilgit-Baltistan.
The Dam will prove to be an economic milestone for the country, he said while reviewing progress on Diamer-Bhasha Dam Project here at the PM House. The Prime Minister directed that 1% of the project cost should be allocated, specifically for environmental conservation so that local vegetation and wildlife resources are not affected. He said the first preference for unskilled jobs, should be given to locals of the project area.
He further directed that the security of foreign consultants, working on the project, should be ensured and security costs should be adjusted in the project cost.
The Prime Minister was apprised that a separate unit of Gilgit-Baltistan Scouts was being raised, specifically for security of this project and in this regard an MoU has been signed with the Interior Ministry.
It was informed during the meeting that 100 kilometers of the Karakoram Highway (KKH) will be affected after the construction of Diamer-Bhasha Dam and an alternative route, stretching 142 kilometers, will be built on KKH.
The Prime Minister directed that the Chairman WAPDA should visit the project site immediately and report the updated status regarding the progress of work.
The Prime Minister further said that he will personally monitor the project’s progress and will visit the site soon.
Earlier, the Prime Minister was briefed that the project will provide a gross storage of 8.1 million acre feet (MAF) and live storage of 6.4 MAF and the total cost of the project is US $ 13.87 billion with 9 years completion time.
The project will have an installed capacity of 4,500 MW generated from 12 units of 375 MW and will generate revenue of US $ 2.216 billion per annum.
The project will pay back its cost in 8 years and would also extend life of Tarbela reservoir by 35 years by blocking the sediments upstream.
The Prime Minister was apprised that land acquisition for the project was in process.
The Prime Minister was informed that three (03) model villages at Thak Das, Harpan Das and Kino Das, with all basic amenities, shall be developed for resettlement of 4228 affected households/families who are dislocated due to the project.