Day After ‘Terror-Rebuke’,Pakistan Approves Financing For Dam That India Is Opposed To

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New Delhi: In a move that may appal India, Pakistan Monday agreed to finance the Diamer-Basha dam, a gravity dam on the Indus river in Gilgit-Baltistan's Diamer district.

Prime Minister Nawaz Sharif Monday approved, in principle, the financing plan for the dam which has faced objections from India in the past.

Sharif directed the water and power, planning and finance secretaries to expedite work on the financial proposal and start related preparations to ensure the physical work on the dam's construction kicks off before the end of 2017, Dawn reported.

The development comes a day after Pakistan was rebuked for terror at the Heart of Asia summit held in Amritsar, India.

Prime Minister Narendra Modi called for dismantling of terror sanctuaries. "Terrorism and externally induced instability pose the gravest threat to Afghanistan’s peace, stability and prosperity. And, the growing arc of terrorist violence endangers our entire region. As such, support for voices of peace in Afghanistan alone is not enough.

"It must be backed by resolute action. Not just against forces of terrorism, but also against those who support, shelter, train and finance them," PM Modi had yesterday said.

Snubbing Pakistan over terrorism, Afghanistan President Ashraf Ghani said, “We need to identify cross-border terrorism and a fund to combat terrorism. Pakistan has pledged 500 million dollars for Afghanistan's development. This amount, Mr. Aziz, can be spent to contain extremism,” directly addressing Pakistan Prime Minister Nawaz Sharif’s Foreign Affairs advisor Sartaj Aziz.

The Diamer-Basha dam has faced several setbacks because major sponsors, including the World Bank and Asian Development Bank, refused to finance the project. According to them, the dam's location is in a disputed territory, and they asked Pakistan to get a no-objection certificate from neighbouring India.

The dam portion of the project will be constructed through Public Sector Development Programme (PSDP) allocations and Water and Power Development Authority (Wapda) generated resources.
The remaining financing for the power-generation portion will be arranged on commercial basis by the ministry either through Wapda or through leasing its existing projects.

The dam was approved for construction by the Council of Common Interests (CCI) in 2009. Efforts to finance it through multilateral donors had been prolonged.

The Diamer Basha dam will provide 8.1 million acre feet (MAF) of gross storage. Of this, 6.4 MAF will be live storage and a capacity to produce 4500 MWs of cheap and clean energy. The premier also appreciated the fact that the land acquisition for the dam has been completed.

The construction of Diamer-Basha dam was originally scheduled to be completed in 2016, and then in 2019 after the military regime of Gen Pervez Musharraf decided on its construction. But work on the project did not progress at all during his rule.

India in the aftermath of Uri attack decided to revisit the Indus Waters Treaty in order to teach its neighbouring country a lesson. "Blood and water can't flow together," PM Modi had said.

IWT Row Might Take A Worse Turn

The India-Pakistan water dispute is set to intensify, with New Delhi questioning the World Bank’s neutrality in arbitrating between the two countries.

The World Bank, which brokered the Indus Waters Treaty (IWT) in 1960, settles differences arising from sharing of water and setting up projects along the Indus river basin.

India is miffed with the international body for accepting Pakistan’s demand to initiate a court of arbitration (CoA) process to resolve a dispute involving the 330-MW Kishenganga and 850-MW

Ratle hydroelectric projects. Government sources said New Delhi – in a strongly worded letter – accused the World Bank of adopting a “non-neutral” stand that appeared to favour Pakistan.

India shot off the letter soon after returning from Washington, where both the countries had been invited for mediation on November 17. “We have told them in no uncertain terms that their action is biased, and India is not going to take part in the arbitration proceedings. We have taken a very hard stand against the World Bank for not acting on India’s request to have neutral experts look into the dispute as per IWT provisions,” said a foreign ministry official.

An official from the Union water resources ministry alleged that the World Bank did nothing despite having 20 days to work on India’s request. “But they promptly accepted Pakistan’s demand to have a CoA,” he said.

The latest row follows the World Bank’s decision to proceed simultaneously with two parallel mechanisms – Pakistan’s demand for a CoA and India’s request for neutral experts. India termed it as a decision that was “legally untenable” and violated the provisions of the IWT. Sources said India may consider approaching the United Nations for redressal if the World Bank insisted on following this course of action.

The tussle involves two hydroelectric projects that are coming up on the Jhelum and Chenab rivers respectively. Objecting to the design of the 330-MW Kishenganga project, Pakistan claimed it would result in a 40% reduction of water flowing into the country – flouting IWT provisions in the process. As for the 850 MW Ratle power plant, Pakistan wants the planned storage capacity of the project to be reduced from 24 million cubic metres to eight million cubic metres.

India, however, held that the two projects do not violate any provision of the treaty.

This row has put the IWT under further strain. After the September 18 attack on the Uri army camp, the Modi government had indicated that it would make full use of its share of water permissible under the treaty to provide for India’s power and agricultural needs.

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