‘WB has termed Diamer-Bhasha Dam risk for financiers’

By Khalid Mustafa in the News, Oct 4

ISLAMABAD: The Economic Affairs Division (EAD) here on Wednesday informed a standing committee of the Senate that the World Bank (WB) had refused to extend a loan for the Diamer-Bhasha Dam project, terming it as risk financing. The EAD officials informed the Senate body about the situation, accepting their failure in arranging finance for the $12 billion Diamer-Bhasha Dam project.

However, there are some commitments for the project, the latest coming from the US of about $220 million. As far as the Asian Development Bank (ADB) was concerned, the EAD officials said it had never committed any loan for the project before. However, there were some estimates that the ADB would extend a loan of $3-4 billion if there were visible funding for the project, they added.

The ADB is of the view, according to the EAD Additional Secretary Iftikhar Rauf, that in case the government manages funding from other resources in reasonable size, it would not hesitate to fund the project. “No international financial institution and donor bank is ready for risk financing,” Rauf said.

To a question, he said that it had never been categorically conveyed by the ADB that it would extend a credit line for the project only when the World Bank would join the project, which had linked its funding with an NoC from India. He said that every international financial institutional and world donor agency had its own limits to extend loans.

The top EAD officials also revealed that Pakistan Railways and National Transmission Dispatch Company (NTDC) had signed some loan agreement with China, bypassing the EAD and violating the rules of business. Both the departments had signed loans of $817.60 million for four projects.

The members of the Senate body took a serious notice against Pakistan Railways and NTDC for signing these loans and asked for a detailed briefing from both the organisations and the Planning Commission in the presence of EAD officials. If the departments are found guilty, their case would be referred to the NAB.

Likewise, the Senate committee members also raised the issue of importing scanners from China at the cost of $11.66 million. The particiapnts were told that Interior Ministry had imported four scanners to be installed at two entry and two exit points in Islamabad under the Safe City Project. The Senate members were told by the EAD that these scanners were not being used so far as they emitted radiation in the radius of four metres and could hurt the people passing through the scanners.

The members posed the question to EAD as to why it had negotiated loan with China for these scanners. The official said that EAD started negotiations for the loan with a donor or a country only when Planning Division cleared the project. http://www.thenews.com.pk/Todays-News-13-17903-WB-has-termed-Diamer-Bhasha-Dam-risk-for-financiers