Diamer-Bhasha dam project: Centre blames ADB for $2 billion loss





The federal government has accused the Asian Development Bank (ADB) of causing $2 billion (Rs 190 billion) loss to Pakistan in four years because of its dilly dallying on 4,500-megawatt Diamer-Bhasha dam, sources close to Chairman Wapda told Business Recorder on Wednesday. 

Secretary Cabinet Division Nargis Sethi, who is holding the additional charge of Secretary Water and Power, will hold a meeting with ADB”s Board Group on energy vision, ongoing project and new proposal on Thursday (today). “ADB has a portfolio of $2 billion for Pakistan”s energy sector and we are discussing existing and future projects with the ADB delegation,” said an official. 

“ADB has reversed its commitment of providing lead financing and support for Diamer-Bhasha dam and the ADB President and new Director General Klaus Gerhaeusser have adopted a hostile approach to this project in line with the thinking of the World Bank,” the sources added. The sources said a senior official of ADB on June 28 this year met the Minister for Water and Power wherein the key issue discussed was the lead financing role for the project. 

During the meeting, it was observed that ADB was not ready to support the construction of Diamer Basha Dam and it was having second thoughts on becoming the lead donor for Diamer Basha Dam or even in supporting it. “ADB wants a broader donor coalition which implies the involvement of the World Bank, which has repeatedly declined to support the Diamer-Bhasha dam, as it feels that it is located in disputed area,” sources maintained. 

Wapda”s officials also maintained that there was no need to get a ”no objection certificate” from India before any commitment was made by the ADB. However, multilaterals “cannot get any project approved by their Board in a disputed territory unless both sides of the dispute agree to it”. The sources said that the GoP had already provided Rs 16.4 billion for land acquisition with as cumulative cost of Rs 50 billion and the allocation and release of this amount was related to the capacity of Gilgit-Baltistan administration to disburse the compensation amount to the affectees. 

The Council of Common Interest (CCI) had already unanimously approved the project which was one of the preconditions of ADB. The requirement of fully abiding by International/ADB ”safeguards” on land acquisition, resettlement, environmental conservation and adherence to international best practices in procurement for goods and services have also been met. 

Wapda officials argued that four times during the past four years, senior officials of the ADB committed to support Diamer-Basha dam. During his meeting with the Prime Minister in Davos Switzerland in 2009, the President of the ADB agreed to send Vice-President of the ADB for preliminary discussion on the dam. The Vice-President, Niaoyu Zhao, visited Pakistan a couple of months later and announced support for the DBD project in the Planning Commission. 

In 2010, Hina Rabbani Khar, the then Minister of State for Finance, in a meeting with Juan Miranda, the DG at that time, specifically mentioned the construction of Diamer-Bhasha dam as the highest priority to the exclusion of every thing else. This was followed by reiteration of the financial assistance and support in 2010 and 2011 by Juan Miranda. An Aide Memoire was also exchanged and agreed upon. The GoP and ADB also identified tentative dates in May-June 2011 for the ”Road Shows” in Europe, Middle East and Japan before the formal bidding in 2012-2013 for selecting consultants and contractors. 

Copyright Business Recorder, 2012





Muhammad Ramzan Rafique
Muhammad Ramzan Rafique

I am from a small town Chichawatni, Sahiwal, Punjab , Pakistan, studied from University of Agriculture Faisalabad, on my mission to explore world I am in Denmark these days..

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