MONEM FAROOQI
The inability of resolving petty issues within 18 months of its one of top priority 4,320 megawatt (MW) Dasu Hydropower Project (DHPP), has landed government into frustration as it could not be able to acquire required land before the World Bank deadline.
The situation ended up in a mess as primary condition of implementing $266. 5 million social and environmental management plans, a critical component for the timely completion of the project’s first phase could not be implemented till mid-term review by Oct 31 of $4.5 billion loan agreements that was approved in November 2014, the sources told Pakistan Today adding the acquisition of about 80,000 kanals was a basic component of the World Bank financing before going into the review.
The sources said that the World Bank had been seeking Finance Minister Ishaq Dar’s intervention to resolve the issues. Whereas KP government’s claim of charging 2.5 per cent as service charges for land acquisition also made things worse.
Additionally, the sources said that the KP government failure in ceasing locals for illegal construction on the marked land further aggregated problems in already negotiated prices that would go beyond Rs 10 billion now.
The federal government also took more than 15 months in finalising property rates to acquire land for the project. However, the nation would have to bear the loss of Rs 335 million on daily basis for the delay besides the KP government would face loss of Rs 37 million per day.
The sources said that was the first attempt by the World Bank to finance a large infrastructure project on a sequential basis through a combination of credits and guarantees to mobilize the full financing over the construction period. They said that the credit was financed from the International Development Association (IDA), the World Bank Group’s grant and low-interest arm.
The project documents revealed that the cost of land acquisition has been reduced from Rs 17 billion to Rs 12 billion. However the cost of other components has gone up. The cost of relocation has been increased to Rs 13.5 billion from Rs 12 billion. The internal roads will be completed at an inflated cost of Rs 10.5 billion. The cost of main dam is approved at Rs 101 billion while an underground powerhouse will cost Rs60 billion.
On the other hand, the sources said that negotiations on $800 million components were still going on with foreign creditors and another $1.4 billion with domestic commercial banks, however, any agreement has not been finalized yet.
The documents also indicated that the WB has affirmed for extending guarantees for obtaining $1.9 billion of commercial loans. In addition to this, it also planned to approve another loan of $533.4 million for the project by next year provided the scheme advances as per schedule.
The KP government spokesman did not reply when requested for comment over the issue, however, Federal Minister for Water and Power Khawaja Asif and Minister of State Abid Sher Ali have been busy with their schedules till filing of this report despite several reminders.