World Bank refuses to fund Diamer-Bhasha dam

[Interceptor]

World Bank refuses to fund Diamer-Bhasha dam

Thursday, July 31, 2008

By Dilshad Azeem

ISLAMABAD: The World Bank has categorically refused to fund water and power projects in Azad Jammu and Kashmir (AJK) and the Northern Areas (NAs), including the Diamer-Bhasha Dam, The News has learnt.

"The bank's refusal to provide funds has virtually endangered the practicability of the Bhasha Dam on whose feasibility and technical reports huge amounts have already been spent since 2006," sources privy to a high-level meeting said.

The meeting was told that the Water and Power Development Authority (Wapda) required $30-40 billion for the projects, including the Bhasha Dam and others in the next 15 years to meet the growing electricity requirements through cheap power.

Water and Power Minister Raja Pervez Ashraf, Wapda Chairman Shakeel Durrani, officials of the Planning Commission, the finance ministry and the Economic Affairs Division attended the meeting held at the Water and Power Ministry on hydropower generation and water resources.

"Wapda raised the issue of financial resources for its mega projects, which is a big challenge as the Word Bank has declined to finance the Diamer-Bhasha Dam and other projects in the Northern Areas and the AJK," the minutes of the meeting reveal.

The document, available with this correspondent, states that the water and power minister, concerned with the World Bank's refusal to fund Wapda's projects in the AJK and the Northern Areas, made an observation on this occasion that we had to live with these constraints.

"It was proposed that a study may be undertaken whereby one fourth of the amount required be provided through the PSDP and surcharge on electricity consumption, one-fourth through suppliers credit and DFIs, one-fourth be raised through the market/loans and one-fourth through private sector stocks sale and investment."

"The Planning Commission and the Economic Affairs Division and the finance ministry would coordinate the issue of raising the finances," it reads. The six-page document consists of the Wapda chairman's briefing on the overall water and power scenario, the Economic Affairs Division officials’ update about refusal of funds by the World Bank, financial resources for the water and power sector, views of the provincial governments, small dams construction and ignorance of hydropower projects.

The Wapda chairman, in his briefing, authenticated the failure of both the political as well as the military governments during the last three decades. "Development of water storages and hydel power development have been ignored – apart from the Ghazi Barotha project (1,450 MW) – over the past 30 years. The country is now paying the cost of this neglect," the Wapda chairman was quoted in the document as telling the meeting.

The Wapda chairman maintained that currently Wapda was implementing projects for generation of 25,000 MW. "During the next five years, hydel projects with generation capacity of 20,000 MWs could be started."

The News contacted Wapda's official spokesman Razaul Haq Siddiqui to seek his department's version, who stated "definitely the Wapda chairman owns his points mentioned in the minutes of such a high-level meeting chaired by the water and power minister."

World Bank refuses to fund Diamer-Bhasha dam

 

[IceCold]

Lol so much for making dams without having the resources to built them.

 

[blain2]

I say let all the provincial governments hear from the people how fed up they are of power issues and automatically we would get consensus on most of the Dams....I am sure there are reasons for WB to decline, but obviously those are not disclosed...I am also sure the WB asked the government to tighten its belt somewhere else and cut out wastage. You wont hear about the reasons..typical!

 

[Neo]

Forget WB and allow private direct investments from all over the world including Pakistani expats.

Why doesn't GoP issue developments bonds for expats for mega projects?

 

[Cheetah786]

I say let all the provincial governments hear from the people how fed up they are of power issues and automatically we would get consensus on most of the Dams....I am sure there are reasons for WB to decline, but obviously those are not disclosed...I am also sure the WB asked the government to tighten its belt somewhere else and cut out wastage. You wont hear about the reasons..typical!

I'll take a wild shot in the air and say because WAPDA is losing money year after year and is being bailed out by the GOP so for that simple reason they might say no.

 

[Neo]

China to fully finance Diamer Bhasha dam in Pakistan​

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Friday, 15 August 2008

In a major development regarding the construction of Diamer Bhasha dam, China has agreed to completely finance the $8.5 billion project, sources in Water and Power Development Authority (WAPDA) told on Thursday.

German Company Lemhyer has issued final draft of the dam in which the company has projected the cost of dam at $8.5 billion against the earlier projected cost of $6.5 billion in the year 2005. Government wants to start the construction work on Bhasha dam in the year 2009, sources added.

Pakistan has turned to China regarding the financing of the project after World Bank refused to add the project in the $1.4 billion aid for current financial year 2008-09. They further said that World Bank lending rates are higher and China would provide loan on lower rates. Pakistan had submitted the draft of detailed engineering design of the dam and in response China has agreed to provide financing for the said project. Sources informed that China has also great expertise in the working on big dams and it has expert labour force and machinery for such purposes.

Chinese government has offered Pakistan to provide skilled labour for the construction of the Bhasha dam as it has 17,000 skilled labourers who have worked on three Gorges Dams in china, which are generating 30,000MW electricity. They said that China has also assured that it would hire a company to provide financing to Pakistan for the construction of the dam. Earlier, Pakistan was looking at Asian Development Bank (ADB) and World Bank.

Government has allocated Rs 200 million in Public Sector Development Programme (PSDP) 2008-09 for Bhasha dam.

The government has started work to develop infrastructure for communication link of Bhasha dam and in this regard the work on a Karakuram Highway to link Bhasha dam was also in progress. Karakuram Highway would be upgraded at cost of Rs 11.578 billion and government has released Rs 2 billion for the said project.

Final draft of Bhasha dam: German Company Lehmar has issued final draft of Diamer Bhasha dam which indicated that as many as 37,000 families would be affected following the construction of the dam. Lehmar has submitted final detailed engineering design to the Water and Power Development Authority (WAPDA) in which it has recommended the government to set up nine model villages near Gilgat to accommodate the affected families. The company has also recommended allotting five Marlas for residence per family and six canals to one family for agriculture purpose.

According to the design, dam would generate 4500MW power and its water storage capacity would stand at 7.5 million acre feet (MAF) whereas dam would have four turbines and two powerhouses.