The 25-month delay in reaching a consensus with Dasu dam affectees on the land acquisition has not only escalated the cost of the first phase of the Dasu hydropower project by $1.7 billion, it has also compelled WAPDA to pay commitment charges besides depriving the nation of Rs 9.3 billion in the form of cheap electricity, documents available with this scribe confirm.
According to the documents, WAPDA authorities’ inability to resolve the various issues within 25 months has landed the department into frustration as it could not acquire the required land before the deadline given by the World Bank.
The documents indicate that 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 this year of $4.5 billion loan agreements that were approved in Nov 2014.
Sources told Pakistan Today the acquisition of about 80,000 kanal was the basic component of the World Bank financing before going into the review. The documents also contain a letter of the World Bank seeking Finance Minister Ishaq Dar’s intervention for resolving the issues.
The KP government stayed on its claim of charging 2.5 percent as service charges for land acquisition which was unprecedented, and made things worse. However, the KP government withdrew its claim of services charges, later.
Additionally, the documents mention the KP government’s failure in ceasing locals for illegal construction on the marked land had further aggregated the problems in already negotiated prices that would go exceed Rs 10 billion now. Besides, federal government also took more than 15 months to finalise the property rates for acquiring project land.
Whereas, the documents mention that there would be a loss of Rs 8,375 million in 25 months for delay and KP faced loss of Rs.925 million for this barrier. 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. Project documents revealed that the cost of land acquisition had been reduced from Rs17 billion to Rs12 billion, while the cost of other components have gone up. The cost of relocation has been increased to Rs13.5 billion from Rs12 billion. The internal roads will be completed at an inflated cost of Rs10.5 billion. The cost of main dam was approved at Rs101 billion while an underground powerhouse will cost Rs60 billion.
On the other hand, sources said that negotiations on $800 million components took 25 months with foreign creditors and another $1.4 billion with domestic commercial banks. The documents indicate that WB has affirmed for extending guarantees for obtaining $1.9 billion of commercial loans. In addition, it also plans to approve another loan of $533.4 million for the project by next year, provided the scheme advances as per schedule. WAPDA spokesman claimed that consensus was developed after 2-month continuous negotiations.
WAPDA Chairman Lieutenant General Muzammil Hussain (r) told the affecters that the consensus between WAPDA and the affectees for land acquisition would pave way to be instrumental in removing the bottlenecks for implementing the project. The WAPDA spokesman said that besides compensating the project affectees for their land and assets, Rs 56.702 billion has been earmarked for various uplift schemes in the project area including communication infrastructure, livelihood support, area development and improvement in education, power and public health sectors etc.
