Pakistan: Bhasha versus Dasu

EDITORIAL

The government, according to news reports, has contemplated shelving the plans for building the Diamer-Bhasha Dam due to financial constraints as a result of paucity of resources and uncertainty about financial assistance from multilaterals and FoDP (Friends of Domestic Pakistan). Earlier this month, the Senate Standing Committee on Water and Power was informed that the World Bank has indicated its support for the run of the river Dasu dam with an installed capacity of 4320 MW, a support that greatly implies that the construction of the Diamer-Bhasha dam with a capacity of 4500 MW may be delayed by 10 years. This pre-supposed limited resources which constrain the government from undertaking even one of these two mega hydel projects with its own finances. Chairman Wapda had taken strong exception to this and categorically and unambiguously stated that it is the prerogative of the Bank's member country to identify its project priorities and not that of the multilateral donor. No one can challenge the inherent relevance of his contention. Multilaterals too accept this which explains why they reiterate time and again in their loan proposals that a project or a programme loan would be at risk if it is not driven by the borrowing country; or, in other words, multilaterals acknowledge that the success of any lending is contingent upon all the stakeholders in a proposed project being taken on board including the government, the political leadership, the civil society as well as the beneficiaries/affected people of any specific project. Until and unless there is a broad consensus the success of any project or programme support would be negligible, if any. In the matter of Diamer-Bhasha dam there are reports that multilaterals have requested the government of Pakistan to first get approval for the construction of the dam from India - a strange request given that the 1960 Indus Water Treaty gives exclusive use of the waters of the western rivers to Pakistan. The main reason for Chairman Wapda's preference for Diamer-Bhasha as opposed to Dasu, apart from the difference in energy output of around 180 MW, is the fact that Dasu, as the run of the river dam, does not provide for any water storage capacity in marked contrast to Diamer-Bhasha which, in turn, envisages four major outputs that are sorely needed in Pakistan today: (i) 4,500 MW of electricity; (ii) store an extra 8,500,000 acre feet (10.5 km3) of water for Pakistan that would be used for irrigation and drinking; (iii) extend the life of Tarbela dam located downstream by 35 years; and last but not least (iv) control flood damage by the River Indus downstream during high floods. However, it is also prudent to acknowledge that donors - bilateral as well as multilateral - have to adhere to safeguards that are approved by their parliaments/board of directors. Failure to comply with these safeguards in their lending proposals would lead to an automatic rejection by parliaments/board of directors. The two safeguards most commonly used to deny lending for hydel projects to member countries are those related to mitigating the impact of the project on environment and resettlement. A look at the environmental impact assessment of the Diamer-Bhasha dam reveals the following: (i) 31 villages would be affected, (ii) 4,100 houses would be affected, (iii) 35,000 people would be displaced, (iv) 1,500 acres of agriculture land would be submerged as a result of the dam's construction and 25,000 acres would be under reservoir. The government proposed 9 model villages, resettling 28,000 people, building new physical and social infrastructure, and development of a tourism industry however issues with the affected people of the project remain. Diamer-Bhasha and Dasu were no doubt proposed as energy projects critical to Pakistan's economy to the World Bank. However, the Bank opted for Dasu with a lower total cost and assessed environmental impact as well as lower resettlement cost. Resources of multilaterals are not limitless and perhaps this is a lesson learned: to propose a limited number of projects that can be processed based on the envisaged country strategy of each multilateral.