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Japan denies it made $4 bn offer for Bhasha dam
ISLAMABAD: It has now been confirmed that the Senate Committee on Water and Power was misinformed by the Economic Affairs Division (EAD) when it was told that Japan had agreed to provide $4 billion for the Bhasha dam as Japan International Cooperation Agency (JICA) has denied it officially.
The impression that Japan has taken the lead by agreeing to provide funds of $4 billion for machinery and equipments including turbines for the much touted Diamer-Bhahsa dam was given by EAD officials but a JICA spokesman told The News that Tokyo had not given such a nod to Pakistan. The controversy over Japan funding the Bhasha dam emerged when a senior EAD official informed the Senate Committee meeting that Japan had come forward and agreed to help install the electro-mechanical system of the dam which includes the 12 power turbines, each with a capacity of 375MW and to this effect it would provide $4 billion credit line.
Pakistan is facing the huge funding crisis for Diamer-Bhasha dam after ADB’s informal no to finance the project unless Pakistan arranges a credit line for the project from the Work Bank which has already linked its financing with a No Objection Certificate (NOC) from India
“We are only working for the replacement of 4 hydro generation units installed in Mangla dam and to this effect Japan would extend $200-250 million loan to Pakistan. With the replacement of the existing 4 units in Mangla dam, the hydro generation capacity of the dam would increase by 180 MW. However, as far as Diamer-Bhasha dam is concerned, we have not given any undertaking to provide funding for the machinery and equipment valuing $4 billion to be installed in the said dam,” the JICA spokesman said.
“The cost of the Bhasha project is so high and a country like Japan is not in a position to provide such a huge funding for machinery and equipment,” he said and added: “The scope of the civil works of the project is also vey large.” To a question if Japan is hesitant in taking part in a project in which China may be the part of the project, the JICA spokesman dispelled the impression saying that Japan took part in Ghazi Barotha hydropower project in which construction contract was given to a Chinese company. “So, Japan has no such issue.”
However, when contacted Joint Secretary Kazim Niaz who deals with Japan in the EAD said that Japan has shown keen interest in providing machinery and equipment for Diamer-Bhasha dam, but it has not said that it would provide $4 billion for machinery and equipment.
To a question, he said that in meeting of JICA head with the EAD secretary, Japan showed interest in providing machinery and equipment. However, the cost of full machinery and equipment stands at $4 billion.
In another alarming disclosure, the inordinate reluctance by ADB in releasing the loan has delayed the initiation of the project by 2-3 years owing to which the cost of the project has further escalated by $2.5 billion from the estimated cost of $11.178 billion worked out in 2009 to $13.684 billion. It is also pertinent to mention that Japan had also taken the lead among the Friends of Democratic Pakistan (FODP) by meeting the pledge of giving $1 billion to Pakistan.
The pledges from FoDP member countries amounting to $5.2 billion came up for Pakistan in donors moot held at Tokyo in April 2009. And Japan had fulfilled its promise by disbursing the $1 billion loan to Pakistan.
The official also disclosed that Ministry of Water and Power is going to move a summary either to ECC (Economic Coordination Committee) or Cabinet seeking a nod to formally ask China to complete the whole civil works of the dam portion, and tunnels leading to power houses.
The construction of the whole civil works will cost somewhere between $2.50-3.5 billion. However, the EAD officials in the Senate committee meeting held on Wednesday last took a diplomatic posture saying the ADB has not asked for NOC from India for its credit line for the project and termed the media reports baseless. “If it is the case then why is Wapda working to scuritise its assets to generate funding and looking towards China and Japan for more funding,” the sources in the Ministry of Water and Power argued. They said that ADB had softened its stance for Bhasha dam when it came to know that Pakistan had seriously made up its mind to handover the project to China. The EAD officials also told the Senate committee meeting that US had agreed to provide $200 million from the Kerry Lugar money.
The top EAD official said that $200 million is nothing for the huge project but it has a symbolic value and it will help persuade other IFIs (international financial institutions) to come up with the required credit lines for the project. It is to be noted that Washington had earlier promised but never extended the loan. Now the US is again reiterating the same thing.
ISLAMABAD: It has now been confirmed that the Senate Committee on Water and Power was misinformed by the Economic Affairs Division (EAD) when it was told that Japan had agreed to provide $4 billion for the Bhasha dam as Japan International Cooperation Agency (JICA) has denied it officially.
The impression that Japan has taken the lead by agreeing to provide funds of $4 billion for machinery and equipments including turbines for the much touted Diamer-Bhahsa dam was given by EAD officials but a JICA spokesman told The News that Tokyo had not given such a nod to Pakistan. The controversy over Japan funding the Bhasha dam emerged when a senior EAD official informed the Senate Committee meeting that Japan had come forward and agreed to help install the electro-mechanical system of the dam which includes the 12 power turbines, each with a capacity of 375MW and to this effect it would provide $4 billion credit line.
Pakistan is facing the huge funding crisis for Diamer-Bhasha dam after ADB’s informal no to finance the project unless Pakistan arranges a credit line for the project from the Work Bank which has already linked its financing with a No Objection Certificate (NOC) from India
“We are only working for the replacement of 4 hydro generation units installed in Mangla dam and to this effect Japan would extend $200-250 million loan to Pakistan. With the replacement of the existing 4 units in Mangla dam, the hydro generation capacity of the dam would increase by 180 MW. However, as far as Diamer-Bhasha dam is concerned, we have not given any undertaking to provide funding for the machinery and equipment valuing $4 billion to be installed in the said dam,” the JICA spokesman said.
“The cost of the Bhasha project is so high and a country like Japan is not in a position to provide such a huge funding for machinery and equipment,” he said and added: “The scope of the civil works of the project is also vey large.” To a question if Japan is hesitant in taking part in a project in which China may be the part of the project, the JICA spokesman dispelled the impression saying that Japan took part in Ghazi Barotha hydropower project in which construction contract was given to a Chinese company. “So, Japan has no such issue.”
However, when contacted Joint Secretary Kazim Niaz who deals with Japan in the EAD said that Japan has shown keen interest in providing machinery and equipment for Diamer-Bhasha dam, but it has not said that it would provide $4 billion for machinery and equipment.
To a question, he said that in meeting of JICA head with the EAD secretary, Japan showed interest in providing machinery and equipment. However, the cost of full machinery and equipment stands at $4 billion.
In another alarming disclosure, the inordinate reluctance by ADB in releasing the loan has delayed the initiation of the project by 2-3 years owing to which the cost of the project has further escalated by $2.5 billion from the estimated cost of $11.178 billion worked out in 2009 to $13.684 billion. It is also pertinent to mention that Japan had also taken the lead among the Friends of Democratic Pakistan (FODP) by meeting the pledge of giving $1 billion to Pakistan.
The pledges from FoDP member countries amounting to $5.2 billion came up for Pakistan in donors moot held at Tokyo in April 2009. And Japan had fulfilled its promise by disbursing the $1 billion loan to Pakistan.
The official also disclosed that Ministry of Water and Power is going to move a summary either to ECC (Economic Coordination Committee) or Cabinet seeking a nod to formally ask China to complete the whole civil works of the dam portion, and tunnels leading to power houses.
The construction of the whole civil works will cost somewhere between $2.50-3.5 billion. However, the EAD officials in the Senate committee meeting held on Wednesday last took a diplomatic posture saying the ADB has not asked for NOC from India for its credit line for the project and termed the media reports baseless. “If it is the case then why is Wapda working to scuritise its assets to generate funding and looking towards China and Japan for more funding,” the sources in the Ministry of Water and Power argued. They said that ADB had softened its stance for Bhasha dam when it came to know that Pakistan had seriously made up its mind to handover the project to China. The EAD officials also told the Senate committee meeting that US had agreed to provide $200 million from the Kerry Lugar money.
The top EAD official said that $200 million is nothing for the huge project but it has a symbolic value and it will help persuade other IFIs (international financial institutions) to come up with the required credit lines for the project. It is to be noted that Washington had earlier promised but never extended the loan. Now the US is again reiterating the same thing.