BEIJING (AFP): In the short space of just a few weeks, Pakistan, Nepal and Myanmar have confirmed the cancellation three major hydroelectricity projects planned by Chinese companies. The rejection of the three projects, worth nearly $20 billion, comes as a serious jolt to China’s ambitious trade-linking project, the Belt and Road Initiative.
Pakistan cited tough financing terms imposed by China as its reason for canceling the $14 billion Diamer-Bhasha Dam project.
Nepal’s deputy Prime Minister recently announced a decision to scrap a $2.5 billion contract for a hydroelectricity project, accusing the Chinese company of financial irregularities. And Myanmar, which halted a $3.6 billion Chinese-backed dam three years ago, confirmed last month that it no longer is interested in big hydro-electric power projects.
The decisions by China’s neighbors could mean a serious loss of image for BRI, which involves plans to build infrastructure across the globe, including in developed countries like the United States and those in Europe.
While there are also diverse local political and economic reasons behind the three decisions, there is a growing realization among poorer countries that Chinese proposals to build massive infrastructure projects come at an extremely high price, analysts said.
Asked about these decisions by Pakistan and Nepal, the Chinese foreign ministry said it was not aware of it. “I am not aware of this information,” Geng Shuang, foreign ministry spokesman, said at a media briefing. “China and Nepal have sound relations and bilateral cooperation covers a wide range of areas.”
According to the local media accounts, Muzammil Hussain, chairman of Water and Power Development Authority (Wapda) in Pakistan told the Public Accounts Committee (PAC) of parliament that the Chinese company involved in the project there had imposed very difficult financing conditions, which included pledging the new dam, as well as an existing dam, as loan security.
“Chinese conditions for financing the Diamer-Bhasha Dam were not doable and against our interests,” Hussain said.
Himanshu Thakkar, coordinator at the South Asia Network on Dams, Rivers & People, a New Delhi based NGO, said, “For Pakistan, the biggest ally has been China.They (Pakistanis) would not take out this project without consulting them (the Chinese).”
Indeed, China and Pakistan frequently describe their relationship as “all-weather” and “iron brothers.” “As far as Pakistan is concerned, they really want financing for this project,” Zorawar Daulet Singh, an analyst at the Center for Policy Research in New Delhi said.
Singh said he would not take the Pakistani official’s statement at face value. Islamabad had approached the World Bank and Asian Development Bank for funding but was turned down, he pointed out.
