Chairman Water and Power Development Authority (WAPDA) Muazamil Hussain, while Briefing the Public Accounts Committee, disclosed that Chinese conditions for financing $ 14 Billion Diamer-Basha Dam were not doable and against our interest. Pakistan has withdrawn the request to include this dam in the China-Pakistan Economic Corridor (CPEC) framework after Beijing placed strict conditions, including ownership of the project. He said Chinese conditions were about taking ownership of the project, operation, maintenance cost and securitization of Dia-Mir Basha project by another operational dam. Chairman WAPDA informed the Public Accounts Committee that these conditions were unacceptable; therefore, Prime Minister Shahid Khaqan Abbasi approved a summary to finance the dam from the country’s own resources.
It appears that after the removal of Nawaz Sharif and cutting to size of the Finance Minster Ishaq Dar national interest has returned to decision making process of the government. Securitizing of operational dam implies mortgaging a big dam, preferably, Tarbela Dam with China. Hence, replication of Srilanka and Mayamar models of Chinese investment. China gives loans for project financing at irrationally high rate of interest. On the other hand, multilateral donor agencies like World Bank and Asian Development Bank charge reasonably low rate of interest on their loans for financing mega multidimensional projects. Financing of Tarbel, Mangla and Warsak Dams are the living examples.
Building big dams with own resources is not possible for a developing country. Financial mismanagement and misappropriation of national resources by the previous and present governments has landed the country in a debt trap. Foreign loans will rise to $ 100 billion by June 2018 and the internal debt liability is more than 20000 rupees. The World Bank in its recent report “South Asia Focus” warned that Pakistan would need $ 31 billion to pay for external payments obligations in the next fiscal year. Raising $ 14 billion for financing Dia-Mir Basha Dam from own resources by a cash strapped country is a million dollar question. When Khwaja Asif was Minister for Water and Power, he along with the Finance Minister Ishaq Dar held a meeting with potential investor in New York in 2015 to acquire loans for this dam, but their efforts did not materialize.
Dasu Dam was also made a part of CPEC framework for which the Chinese contractors had already moved the construction machinery to the dam site. The construction work has not started because compensation amounts have not been paid to the people that will be affected by this dam. The federal government is paying daily demurrage charges to the contractors in foreign exchange. If Dia-Mir Basha Dam strict conditions were not acceptable to the government then what were the conditions for financing this dam and a number of coal based ongoing thermal power projects.
Unfortunately, our political leadership still do not realize how difficult is arranging finances for big environment friendly hydro-power projects. The international donor agencies were willing to finance Kalabagh Dam in the decades of 70s and 80s. Z.A Bhutto shelved this project of supreme national interest and his daughter Benazir Bhutto made critique against this dam a prime election issue in the general elections of 1988. Precious water resources worth $ 22 billion are annually dumped in the Sea because political leadership’s aversion to the construction of big dams and reservoirs. It is because of this myopic policy that Pakistan lost cases in the International Arbitration Court against India on the construction of controversial dams of Kishan Ganga and others being constructed in violation of Indus Basin Treaty. Now India has raised the issue of revision of this treaty the signing of which was made possible by the great lover of building dams, the nation builder President Ayub Khan. May his soul rest in eternal peace. Amen.
