ISLAMABAD, Jan 4: The federal government will weigh on Saturday (today) the consequences in case India abrogates the Indus Basin Water Treaty 1960, official sources told Dawn on Friday.

The issue is being taken up for discussion at a meeting by the economic coordination committee (ECC) of the cabinet that would approve a new policy for independent power producers (IPPs).

The meeting, to be presided over by the finance minister, would be attended by senior officials of the water and power ministry, Wapda, the Indus River System Authority (Irsa) and other officials concerned.

The sources said the federal government had directed the federal and provincial departments concerned to deliberate upon the impact on Pakistan’s irrigation and agriculture sector in case India went ahead with its threat of abrogating the decades’ old treaty.

The meeting would also review availability and demand of strategic supplies, like oil and gas, spare parts, related material and equipment and their stocks’ position, as required under the “war book”.

The committee would review precautionary measures for the safety of important installations, including oil and gas and power generation facilities.

The power policy comes up for discussion after a period of four months when it was dropped from the agenda at the last moment due to strong opposition from Wapda on several issues.

“The disputes have almost been settled but Wapda is not being given the role of processing of IPPs. Instead of private power and infrastructure board, role of Nepra is intact and projects have to be taken over by the provinces at the end of 30-year project life and not by Wapda”, a government official said.

The policy anticipates an energy shortfall of 5,500MW by 2010, and introduces two-tier tariff system through international competitive bidding for attracting fresh private investment.

Under the draft policy, solicited and unsolicited proposals would be invited from local and international investors to develop power plants based on hydel and indigence fuel, including wind and coal.

The main focus of the new policy is on hydel projects that would be implemented on a build-own-operate-transfer (BOOT) basis to be transferred to the relevant province. Plants other than hydel would be developed on build-own-operate (BOO) basis.