China’s conditions force Pakistan to drop PoK dam from CPEC

Updated on Nov 16, 2017 10:17 PM IST

Pakistan is struggling to raise money from international institutions such as the World Bank in the face of Indian opposition to the project on the Indus river in Gilgit-Baltistan.

The China-Pakistan Economic Corridor (CPEC), a part of Chinese President Xi Jinping’s Belt and Road Initiative (BRI), runs through PoK and India has raised objection to the project.(Reuters File Photo)
The China-Pakistan Economic Corridor (CPEC), a part of Chinese President Xi Jinping’s Belt and Road Initiative (BRI), runs through PoK and India has raised objection to the project.(Reuters File Photo)
Hindustan Times, Islamabad/Beijing | ByImtiaz Ahmad and Sutirtho Patranobis, Islamabad/beijing

Pakistan has withdrawn a request to include a strategic $14-billion dam project in the China-Pakistan Economic Corridor (CPEC) after Beijing proposed strict conditions, including ownership of the project, a senior official has said.

China’s foreign ministry on Thursday deflected questions on the Diamer-Bhasha dam in Gilgit-Baltistan being withdrawn from the CPEC, a key part of the Belt and Road Initiative, saying it had no information about the development. Foreign ministry spokesperson Geng Shuang said the relationship between the two sides is “extensive and profound” and that work on the CPEC is progressing.

Pakistan’s Water and Power Development Authority (Wapda) chairman Muzammil Hussain told the parliament’s Public Accounts Committee this week that the Chinese conditions for financing the dam were “not doable and against our interests”.

Briefing the parliamentary panel on the status of the much-delayed mega project, he said the Chinese conditions included taking ownership of the project, operation and maintenance costs, and providing security for the Diamer-Bhasha project by pledging another operational dam.

“These conditions were unacceptable. Therefore, Prime Minister Shahid Khaqan Abbasi approved a summary to finance the dam from the country’s own resources,” he said.

Work on the dam, located in territory claimed by India, is still at a preliminary stage though the foundation stone was laid in 2011. Ground-breaking for the dam has been performed five times in the past 15 years. The project is intended to generate 4,500MW of electricity and store six million acre feet of water.

The issue of excluding the dam from the CPEC also figured when Pakistan’s Cabinet Committee on CPEC met last week. Hussain and the water resources secretary informed the Prime Minister the only way out is to fund the project from domestic resources.

Pakistan took the dam off the table just days before a meeting of a Joint Cooperation Committee (JCC) scheduled for November 21 in Islamabad. The JCC will review progress in implementing projects that are part of the CPEC.

About 15 energy projects valued at $22.4 billion and with a generation capacity of 11,110-MW are part of the CPEC.

The local media reported that Pakistan has been struggling to raise money from international institutions for the Diamer-Bhasha dam in the face of Indian opposition. There were hopes Pakistan might finally complete the project after including it in the CPEC, whose worth has swelled to $60 billion.

Neither the World Bank nor the Asian Development Bank will finance the dam and the government has decided to use it own resources, said water resources secretary Shumail Khawaja.

India has repeatedly objected to the CPEC as it runs through Pakistan-occupied Kashmir, saying it’s a sovereignty issue.

When China’s foreign ministry spokesperson Geng was asked about the Diamer-Bhasha dam on Thursday, he said: “I am not aware of the information.

“China and Pakistan cooperation is extensive and profound. It serves the common interest and is conducive to the development of the whole region. As far as we know, the CPEC is progressing smoothly.”

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