Looking at history for the future of the CPEC

The China-Pakistan Economic Corridor (CPEC) is being hailed as a ‘game-changer’ for Pakistan, with a projected amount of $46 billion. It is hoped it will change the fate of a dismal economy plagued by mismanagement and rampant corruption over decades. Here I attempt to compare the CPEC with another aid package that had similar themes as its goals: poverty reduction and economic growth – the Indus Basin Project (IBP).
Historically, Pakistan and India’s water disputes emerged just after eight months of independence, over the ring of the Indus system of rivers. At this critical stage when both countries were at loggerheads over Kashmir, David Lilienthal, the then chairman US Atomic Energy Commission highlighted the issue at Washington to ink a water accord.
Eugene Black, president of the World-Bank at the time, chalked out a gigantic system, as the chief architect of Indus Basin Project (IBP), starting in 1951. His idea was to have an integrated development plan for the Indus Basin as a whole, focusing on water-sharing between India and Pakistan. He had developed awareness in both countries before the World Bank masterplan of the Indus-Basin project was created, after an indepth study of the Indus Basin. Moreover, under the IBP, India agreed to the construction of Mangla Dam in AJK, a landmark achievement. This precedent kills the argument that multipurpose hydropower projects cannot be developed in the disputed areas of AJK or Gilgit-Baltistan.
The World Bank’s efforts were strong for storage reservoirs (Tarbela, Mangla and Chashma), six barrages, eight new inter-river link canals, and tubewells and drainage works, roads and bridges included in the job. These projects made everlasting impacts on the economy and energy sector of Pakistan. Fifty-five years have passed since the ratification of the treaty, and Pakistan continues to enjoy its benefits. Today, so far, almost 85 percent of hydroelectricity and 95 percent of water storage in Pakistan is because of the World Bank’s commitment to the Indus Basin.
Black paid special attention to the Indus Basin Development Fund (IBDP) as well, convincing the US, the UK, Canada, Germany, Australia, and New Zealand to have a $894 million fund. Pakistan was additionally supplemented by $376 million (when one USD was equal to 4.8 Pak rupee), out of $70 million was in loan. It was through the untiring efforts of Black that India paid $162 million for the IBDP.
The World Bank’s work towards the Indus Basin was a game-changer for Pakistan because of one key reason: the commitment of the World Bank and sincere efforts by its personnel towards the goal. The Indus Basin Development Fund had the true spirit of a ‘game-changer’.
Eugene Black had appointed the best engineering consultant of the time, an American firm, Tippetts-Abbett-McCarthy-Stratton. Their designs had flexibility that allowed Tarbela Dam to touch the storage capacity of 11.62maf and hydropower capacity of 3478MW later on. The storage capacity of Mangla Dam was raised to 5.88maf with 1000MW of hydropower. The IBP was flexible to facilitate the extensions of the projects too, with 1450MW for Ghazi Barotha and Chashma Barrage (0.95maf and 184MW).
The success of the IBP speaks itself, as even after five decades, 94 percent of total water capacity and 87 percent hydroelectricity are accredited to the IBP – and the benefits continue. Successive governments failed to install turbines for additional capacity at already constructed. In a simple story of gross negligence, it can be seen that though in the 2002 Power Policy, the 1410MW Tarbela-IV was supposed to be completed in December 2008, the project started in June 2014. Even though the design was complete, civil works were negligible and only machinery was required for extension. The delay speaks volumes about the slow progress in Pakistan.
However, Black’s ideas were prophetic. On April 18, 1960 he said to the World Bank’s executive directors in these words: ‘Water reservoirs are indispensable for energy and food security’. Pakistan is an agrarian economy where agriculture contributes around 20 percent to GDP and provides employment to 45 percent of the labour force. The construction of water reservoirs in the 1960s gave a boost to agricultural yield and helped achieve food sufficiency. Agriculture land increased from 11.7 million hectares in 1947 to 27.3 million hectares in 2007. Water from a vast network of barrages, canals and dams have irrigated our lands, made our lands fertile, improved crop yield, helped us become a net exporter of raw materials and earn foreign exchange.
Tarbela, Mangla, Ghazi-Barotha and Chashma have generated 723 TWH units together till 2014. If these many units were generated using natural gas as a fuel, it would have taken 8.68 trillion cubic feet of natural gas to generate the same number of units. Not only have dams been able to save the cost of the fossil fuel that would have been required otherwise but through cheap generation the cost of electricity for the consumer has been very low.
Finally, these three dams are extremely important as flood mitigation and water storage mechanisms. The dam plays three roles for the economy of Pakistan – storing water for irrigation, producing cheap hydropower as a by-product and alleviating floods as an additional bonus.
Moreover, the footprint of the funds is clearly visible, with tangible enormous measurable benefits, with even the Wapda House Building in Lahore, standing tall as an emblem of that era, as an architectural landmark and symbol of sustainability since 1965. It is tragic that Pakistan has not even been able to build a monument that could surpass it, let alone meet that pace of development.
The question is: will Pakistan be able to repeat history and bring substantial development as a result of the CPEC?
China’s expertise in building dams is unmatched. Currently, Chinese companies and banks are involved in 330 dams in 74 different countries. Yangtze Power, a state-owned company in China, oversaw the building of the Three Gorges Dam which is the world’s biggest dam. Chinese companies continue to dominate the field of dam construction. Not utilising their expertise and capacities under the CPEC for the development of multipurpose dams would be unwise.
As an engineer, I was amazed to read how wisely Black defined the role of the World Bank, from administration to monitoring, right from concept to reality. Nevertheless, the most impressing niche of the IBP is perceiving the benefits at the planning stage.
Saying that the CPEC is a game-changer sounds more like paid content. Has the Ministry of Planning ever tried to quantify the potential benefits, or at least the basket price of electricity generation after completing high cost coal, wind and favourite LNG energy projects?
Who will be the master architect for the CPEC? It would be best to request those who had chalked-out the economic reform map for China to help the CPEC. Without strong leadership, the fate of the CPEC will not be too different from the annual PSDP projects or the $7.5 billion Kerry-Lugar aid package. Sadly, there is hardly any footprint of this package because of institutional failure in Pakistan.
The IBP was a game-changer, not only because of the funds raised, but also for engaging the best engineering firms. Eugene Black’s role was instrumental in this regard. It takes sincerity to accomplishing something this great. If we had more Eugene R Blacks, M Shoaibs and Ghulam Ishaq Khans, the CPEC would have taken better shape. It was the combined wisdom of the aforementioned personalities that turned the IBP into a success. Without sincere intentions and commitment, neither $894.6 million nor $46 billion can be a game-changer.
Email: ahabasi@gmail.com