07 March 2005	Monday	25 Muharram 1426

ISLAMABAD, March 6: The Planning Commission is reported to have asked the government not to start any new water project for next five years and concentrate on ongoing projects because there is a shortage of funds.

If the government decides to build a big dam, Kalabagh or Bhasha would form part of the next five-year plan.

"At least we are not proposing any new project or dam in the five-year plan", said a senior official when asked whether the commission was also opposed to construction of Kalabagh dam or Bhasha dam in the coming five years.

"Construction of Kalabagh dam will be a political decision. If it is made, some special financial arrangements would have to be resorted to", he said, adding that if a decision was made about Kalabagh, financing would not be a problem.

The PC was informed that an amount of Rs293 billion was being spent on water projects under the medium-term development framework (MTDF) 2005-10. This included about Rs242 billion for federal projects and Rs51 billion for provincial projects.

A PC source told Dawn that the amount was sufficient to complete the ongoing projects only and there was little room for undertaking new major projects. He said even the projects currently in progress were facing shortage of funds and the government had recently authorised the Wapda's water wing to issue bonds to meet financial shortfall.

The source said the commission was of the opinion that the ongoing projects could be delayed unnecessarily if the funds allocated for them were diverted to new projects. This would result in heavy cost overruns. He said an allocation of Rs242 billion for completion of ongoing projects would be sufficient to increase the total water availability by 14.67 million acre feet (MAF) to more than 150 MAF by the year 2009-10 from the current total availability of 135.68 billion.

He said it was not economically desirable to spread the portfolio too much and then keep on expanding it to lead to cost overruns. He said Rs360 billion Bhasha dam might be included in the five-year plan because a couple of billion rupees could be allocated for this project by 2009-10.

He, however, said that funding for the ongoing projects would have to be almost doubled the next year because their construction activities would be in full swing as their contracting and initial formalities had been completed.

As such, the funding for water sector projects would increase to Rs59 billion next year as compared to current year's Rs25 billion allocation. This would increase water availability to 138.6 MAF by the end of 2005-06.

The allocations for the water sector would be the highest in the subsequent two years, i e 2006-7 and 2007-8, and would amount to a total of Rs138 billion in two years. In financial year 2008-09, the water sector allocations would reduce once again to Rs24 billion and Rs21 billion in 2009-10. The total water availability, however, would reach 150.35 MAF by 2009-10, he added.

He said that about Rs300 billion worth of water and hydropower projects were currently in progress. Of these, Rs240 billion worth of projects, mostly water resources development, were fully financed by the federal government or Wapda.