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  • Dec 30th, 2017
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China has reportedly refused to finance $14 billion Diamer-Bhasha Dam power project due to transboundary dispute between Pakistan and India, citing the stance already taken by the World Bank and Asian Development Bank (ADB), well informed sources told Business Recorder. This has been informed by Secretary Water Resources Shamail Ahmad Khawaja at a meeting of Cabinet Committee on CPEC presided over by Prime Minister Shahid Khaqan Abbasi. This update was also placed before the federal cabinet a couple of days ago.

The secretary Water Division briefed the meeting about the status of proposal of inclusion of 4500MW Diamer-Bhasha Dam (DBD) in the CPEC program. He stated that the Chinese side had carried out a detailed study to assess feasibility of DBD project. The assessment report was shared with Pakistan wherein some issues were raised regarding: (i) seismic hazard; (ii) logistics; (iii) technical aspects of construction and equipment; (iv) social and environmental impact and; (v) geo-political aspect.

According to the secretary Water Resources, the Chinese side had raised transboundary matter and pointed out that India had refused to give No Objection Certificate (NOC) to the World Bank and Asian Development Bank (ADB) for financing the project, adding that this response had seriously hampered the inclusion of Diamer-Bhasha Dam power project in CPEC and resultantly Chinese assistance could not be materialized.

The sources said the secretary Power Division proposed that in view of the Chinese response, dam part may be constructed through indigenous resources through combination of PSDP grant, commercial financing and Wapda equity. He also suggested that the power generation facility may be started 2-3 years after work is started. He further informed the meeting that 85 per cent land of the project had already been acquired by spending Rs 86 billion and resettlement was underway. The Prime Minister agreed to the proposal.

The Cabinet Committee on CPEC approved the proposal of Water Resources Division for construction of the dam part through indigenous resources. On November 14, 2017, the chairman Water and Power Development Authority (Wapda) had informed the Public Accounts Committee (PAC) that Chinese conditions for financing the Diamer-Bhasha Dam were not doable and against Pakistan''s interests, adding that Chinese conditions were about taking ownership of the project, operation and maintenance cost and securitization of the Diamer-Bhasha project by pledging another operational dam.

The Wapda chairman and the water resources secretary informed the Premier that the only way out was to fund the much-delayed project through domestic resources. In 2012, the Ministry of Water and Power had accused Asian Development Bank (ADB) of causing a $2 billion (Rs 190 billion) loss to Pakistan in four years because of its dilly-dallying on the 4,500-megawatt Diamer-Bhasha dam.

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