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ECNEC decisions

Headed by the Prime Minister, Shahid Khaqan Abbasi, the Executive Committee of National Economic Council approved five mega projects at the total cost of Rs. 504 billion. The most important project is the construction of Diamer-Basha dam. It marks a watershed in the development planning and execution process which is hitherto hostage to the skewed priorities of spending trillion of rupees on the construction of less productive motorways and losses incurring metro bus schemes. On Lahore Orange Train project Rs. 162 billion are being spent.

Construction of big dam storages was deliberately abandoned since 1975 abandoned which resulted in the power crisis and adversely affected the growth of agriculture sector and landed the country in acute water shortages. Now the situation is that experts put the loss of precious water resource $ 21 billion annually. But unfortunately the ruling political elite deliberately do not take cognizance of this colossal loss of a national resource. The nationalist political parties of KP and Sindh and mainstream political party, PPP compromised the national interest and made Kalabagh dam politically controversial which is economically the most beneficial multidimensional project. It is the biggest causality of myopic vision of national and regional political parties.

Better late than never is the final go-ahead to the construction of Diamer Basha dam at an estimated cost of $Rs. 474 billion aimed at increasing the country’s depleting water storage capacity. The reservoir of the dam has a live storage capacity of 64 million acre feet and has a power generation potential of 4500 megawatts. The Central Development Working Party (CDWP) had cleared the Diamer Basha dam at a cost of Rs. 625 billion. Subsequently, the Planning Ministry excluded the land component and construction of Residential Colony from the dam cost, bringing the price tag down to 474 billion. This outlay is meant for building the reservoir alone. On the completion, the project will increase national water storage capacity from 38 days to 45 days and will enhance the life span of downstream Tarbella dam by substantially reducing the silting rate in its reservoir.

The issue pertaining to the purchase of land and payment of compensation to the people being displaced is yet to be fully resolved. Water and Power Development Authority (WAPDA) has informed the Prime Minister that land issue has to be resolved before starting construction of the dam. Successive governments have given Rs. 138 billion for land acquisition and settlement. Most of this work has already been done and the government has spent Rs. 58.3 billion on land acquisition. An amount of Rs. 53.5 billion has additionally been approved for settlement.

The execution of this project hit snags in the past as World Bank and Asian Development Bank were not willing to fully finance it. In the past 17 years, almost every head of state and head of government had performed the ground breaking ceremony of the project but civil work could not be started. The Asian Development Bank sanctioned a loan of $ 300 million in 2009 but the previous government could not fulfill the procedural formalities to get this amount. The project was going to be included in the CPEC framework in the hope to get the required finances from China on the pattern of international lending agencies. But Pakistan has to withdraw its request to include the $ 14 billion Diamer Basha dam from CPEC framework, the much publicized game changer to the national economy. Citing the reasons for this decision, Chairman WAPDA Muzamil Hussain told Public Accounts Committee on November 15, 2017 that Chinese conditions for financing this mega project were not doable and against national interest. He said that conditions were about taking ownership of the project, operation and maintenance cost plus securitization of Diamer Basha project by pledging another operational dam. It implies that in addition to other tough conditions, Chinese made an irrational demand of mortgaging Tarbella dam with them. This sort of condition was not asked for by the international donors to finance three dams including Tarbella, Mangla and Warsak in the decade of 1960s.

Monda dam was also cleared by CDWP at a cost of Rs. 303 billion but perhaps it was not submitted for ECNEC approval. Water crisis will not be overcome to greater extent unless Kalbagh dam and proposed dam of Kurram Tangi are also built on priority basis. These dams will provide irrigation water to millions acres of land in Punjab and Southern districts of KP.

 

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