‘Uninterrupted’ funds needed to build dams, SC told

ISLAMABAD: The Implementation Committee on Diamer-Basha and Mohammad Dam (ICDBMD) has recommended to Supreme Court (SC) for ‘uninterrupted’ funding for mega projects and in case of any shortfall because of unforeseen circumstances, it may be recovered from divisible pool through which resources were distributed among the Centre and provinces under NFC Award.

According to presentation given to the SC and available with The News, the ICDBMD asked for appropriate legislation for adequate water pricing mechanism to meet development needs of water infrastructure. The ICDBMD asks for allowing National Electric Power Regulatory Authority (Nepra) for recovery of cost attributable to power generation in both projects from electricity consumers. To meet foreign exchange requirements of the projects, Wapda may explore international financial and capital markets in Far East, Europe and USA to tap commercial loans (syndicated or asset backed) and bond avenues.

All these recommendations possess far reaching impact as one is related to deduction of resources from National Finance Commission (NFC) Award and second they ask for adequate legislation for pricing of water instead of giving free of cost or getting meager payment on provision of water availability.

To ensure financing for Bhasha and Mohmand dams, the committee led by Chairman Wapda recommended to the SC for expanding fiscal space of Wapda. The federal government should ensure consistent Public Sector Development Programme (PSDP) allocations, both grants and releases, as par the financing plan approved by the PC-1. “Any shortfall because of unforeseen circumstances may be recovered from divisible pool,” the committee recommends to SC.

The CPPA should clear Wapda’s outstanding receivables including energy sale and net hydle profit. In future, Wapda’s monthly invoices should have “first charge” over the other claims. The recovery of Cash Development Loan (CDL) which is being provided by the government to Wapda, may not be affected from PSDP releases by Finance Division till COD (Completion Date). The mechanism for recovery of CDL after COD would be decided by the competent forum and the burden would be shifted to Wapda.

Any unforeseen resource shortfall during construction of Bhasha and Mohmand dams would be met through support from development partners and available donations. The government’s guarantee may be provided for commercial financing, both local and foreign. The Economic Affairs Division (EAD) will pursue with all development partners to arrange the requisite financing for two dams. A donor coordination meeting may be arranged in close collaboration with Water Resource Division in near future.