The federal government has directed Water and Power Development Authority (Wapda) to seek Chinese financing for water sector projects in RMB (Yuan) rather than US dollars, official sources told Business Recorder. The decision taken at a high level meeting on March 12, 2019, has been endorsed by the federal cabinet, in its meeting held March 19, 2019. However, Wapda has to consult Finance Division, Economic Affairs Division and Planning, Development and Reform Division.
As Prime Minister Imran Khan is scheduled to visit China from April 25-27, 2019 to attend Second Belt and Road Forum hosted by Chinese government; all the concerned Ministries and Divisions have been directed to complete paper work for projects to be discussed during Prime Minister”s visit. Under the Wapda Act 1958, Wapda is responsible for projects in water sector in irrigation, water supply and drainage. During the period 1962 to 1974, two dams, five barrages and nine link canals were completed by Wapda. At present, water storage capacity of Wapda is 17.91 Million Acre Feet (MAF) which with the passage of time, has been reduced from original capacity of 22.74 MAF due to silting. Current power generation from capacity of existing hydel stations is 9,406 MW.
The recently commissioned projects i.e. Kacchi Canal (phase-1), Neelum Jhelum, Tarbella, 4th extension, Golan Gol are providing direct annual benefit to the tune of Rs 86 billion. It was stated that population has increased considerably and it would be 312 million by 2050. Additional water requirement for urban areas and irrigation would be 10 MAF and 60 MAF respectively. In order to meet future requirements, Wapda is working on enhancement of water storage capacity in the country. A number of hydropower projects have been identified for the purpose.
During discussion on the agenda item related to ” major dams and water sector projects”, when Mohamand Dam was mentioned, Advisor to Prime Minister on Commerce, Textile, Industries and Production and Investment, Abdul RazakDawood stood up and requested that he may be excluded from the discussion on that particular agenda. However, Chairman ECC stated that there is no need for the Advisor to leave the discussion room, as the discussion was focused merely on overall progress on water sector projects.
The meeting was informed about current status of Mohamand Dam, DiamarBhasha dam and Dasu Hydropower Project (stage-1) and it was stated that total estimated cost of Mohamand Dam project is Rs 309 billion which will provide a capacity of 0.68 MAF and generate 800 MW. The project will be completed by 2024.
It was revealed that land required for the dam and power house has been acquired. However, land required for water reservoir has not yet been acquired. Wapda maintained that acquiring land is not an issue as ownership of land is in the name of an individual rather than the tribes of the area who have ownership. These tribes have already agreed to sell their land for the reservoir. Acquisition of land for the purpose will be done soon.
It was further stated that contract of construction has been awarded to M/s CGGC-Descon JV and preliminary re-appropriation of federal PSDP allocation of Rs 17 billion for financial year 2018-19 has been approved and Wapda equity of Rs 684 million has already been injected.
Regarding Diamer-Bhasha, the meeting was apprised that currently 32,139 acres (86 per cent) of land out of total required land of 37,419 acres has been acquired. Preliminary work like project colony, model village at Harpan Das, right bank, periphery road, Cadet College at Drang Das, Chilas are under construction. An alternate resettlement plan has been proposed by the Chief Secretary GilgitBaltistan due to non availability of land for two model villages. It was stated that due to efforts of Divisional Commissioner Diamer and Hunza, locals have allowed work in ”disputed territory” between GilgitBaltistan and Khyber Pakhtunkhwa, wherein boundary dispute will be resolved at the government level. The estimated project cost of the dam and power house would be Rs 480 billion and Rs 505 billion respectively which will be met through PSDP allocation, Wapda equity and commercial financing. The preliminary work on the project was started in May 2017 which will be completed by 2027.
Water Resources Division briefed the meeting about the status of Dasu Hydropower Project. It was stated that the work on the project is halted due to land acquisition issues. Steering committee recommended formula for settlement of affectees which requires government approval. The cost of project will be Rs 480 billion which will be met through commercial financing and Wapda equity. It was stated that commercial financing of Rs 144 billion has been arranged from local banks which is the highest financing for a single project.
It was pointed out that land acquisition for Dasu Hydropower Project is very important for starting the project at the earliest. In this regard, assistance from KP government is required to resolve the issue of land acquisition other-wise it will delay the project.
The forum directed Water Resources Division to arrange a meeting under the chairmanship of the Prime Minister to discuss issue of land acquisition for Dasu Hydropower Project by this week. The Chief Minister KP may also be invited to the meeting.
The meeting was informed that the Chinese are willing to provide financing in RMB (Yuan) for water sector projects. In this regard Ministry of Water Resources was directed to explore possibility of seeking Chinese financing (in RMB rather than US dollars) in consultation with Finance Division, Economic Affairs Division, Planning, Development & Reform Division.
After a detailed discussion, the meeting directed Planning, Development & Reform Division to give an overview of priorities (short, medium and long-term) in water sector projects and availability of funds for these projects, to the ECC within two weeks. Water Resources Division will consult Government of KP to set time lines for acquisition of land for the reservoir of Mohmand Dam.
The meeting also directed that Water Resources Division/ Wapda share financial plan for Mohmand Dam, Diamer-Basha and Dasu Hydropower Project with Finance Division.
(This news/article originally appeared in Business Recorder on March 21st, 2019)