mega project

Gilgit-Baltistan:KP Government is Disputing in a bid to get share in income from the Power Generation-ADB’s Head of Energy Division

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ISLAMABAD (D.Times): The Asian Development Bank (ADB), the lead financer of the Diamer-Bhasha Dam on Tuesday suggested Pakistan to focus on resolution of revenue sharing issue between Khyber Pakhtunkhwa (KP) and Gilgit Baltistan (GB) as well as affected population and address issues of environment degradation for smooth execution of the mega project.

ADB’s Head of Energy Division Rune Stroem while speaking to a select group of journalists along with the ADB’s Country Director to Pakistan Werner Liepach after conclusion of his visit to Pakistan aimed at ‘critically reviewing the mega project’. He said, “ADB is fully aware that there will be strong debate on revenue sharing and ADB can give advice but at the end the issue will have to be decided by the Council of Common Interests.” The KP government is disputing over the ownership of 18 kilometres long belt with GB government in a bid to get share in income from the power generation. The GB legislative assembly has passed the resolution against the provincial government claim and intends to take the matter to the Supreme Court if it is not amicably resolved.

“Pakistan has not been focusing on social aspects of the project as much as one could hope,” Stroem said and added that the success of the project hangs on local people satisfaction with resettlement activities. “The resettlement work has been done but still there are gaps where the government needs to bring in improvement as per international standards,” he added.

Explaining the gaps, Stroem said individual activities were going on at relatively small scale and lots of pilot projects have been initiated. He said the legal dispute over sharing of revenues between GB and KP has to be worked through and on environment no sufficient work has been done yet.

Stroem said there was a need to ensure minimum water flows during storage to offset negative impact on the environment. He said no water flows at the time of construction and storage will have adverse affects.

Having an estimated cost of $11.20 billion the project is planned to be completed in 12 years that will generate 4,500 megawatts (MW) electricity besides storing 8.5 million acres feet water for agriculture purposes. The project’s groundbreaking has been performed twice. The ADB official said that the agency has not yet fully assessed the price and completion period but the total cost may change due to price escalation.

Stroem said that an unwritten agreement has been reached with the government. According to that the ADB will play its role as senior lender, co-financer and will be the financial adviser to Pakistan on the project. He said next week both the parties will review the draft of the Memorandum of Understanding that clearly defines the role of the ADB in project execution.

He said the project can’t be donor-driven instead the government is the primary driver and it’s cognizant of the fact. The ADB was helping the government to structure the project and make it bankable. “It is the most complex and the most comprehensive project the ADB has ever financed.”

Liepach said that the ADB has not yet framed clear views on the dam financing requirements but the export credit will be major source of financing. Other than the export credit the international financial institutions and commercial financing would also be availed to complete the project, he added. Stroem said the Water and Power Development Authority will evaluate the bids for the project but the ADB will also review to ensure transparency. The ADB has strong anti-corruption policies and the agency’s involvement will give more credit to the project, he added.

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