Finance Minister Ishaq Dar. — File photo
Finance Minister Ishaq Dar. — File photo

ISLAMABAD: In a fresh twist, Finance Minister Ishaq Dar said on Monday that the government had decided to immediately take up the $6 billion Dasu hydropower project because its construction could start without delay, while the $14bn Diamer-Bhasha project would take 10-12 years to complete.

“We are going into both projects simultaneously. Why should we waste time” making preparations for the Diamer-Bhasha project, he said at a news conference.

He said the USAID had been able to persuade the US Congress to approve $20 million for technical study of the Bhasha dam which was a big development. Earlier nobody ever talked about this project. This would be followed by more funding for construction of the dam, he said.

The minister said the Asian Development Bank which would be the lead financier of Diamer-Bhasha was studying its project structure. He said it was a big project that no one agency could finance.

“Then the World Bank will study it and it will take 2-3 years for the project to shape up.

“Therefore, I have decided we should immediately start work on the Dasu hydropower project” that could be initiated in six months without any major paper and technical work and start producing electricity from two or three units in three years, he said.

Mr Dar said he had convinced the US authorities and the World Bank the project did not need a no-objection certificate from India.

When asked if lending agencies and investors could provide more than $20bn for the two projects, he said annual instalments and sequencing would address this challenge.

The World Bank has been asking Pakistan to give preference to the 4,320MW Dasu project over the 4,500MW Diamer-Bhasha dam that will also provide storage of 8.5m acre-feet of water and enhance the life of Tarbela Dam and barrages downstream.

But some Wapda officials viewed this sequencing as a ploy to put the strategically important Diamer-Bhasha dam on the back-burner.

AFGHANISTAN: About his talks with the Afghan finance minister, Mr Dar said the two sides had agreed in principle to jointly develop a 1500MW hydropower project on the Kunar River and Afghanistan had been asked to provide its feasibility study.

He said the two sides had accepted the Afghan minister’s proposal to build a motorway from Peshawar to Kabul. “We have agreed to the proposal and sought immediate preparation of a feasibility report so that the project can be placed before the multilaterals for financing.”

He said Pakistan had agreed to get approval of the federal cabinet for Tajikistan-Kyrgyzstan-Afghanistan-Pakistan electricity trade, known as Casa (Central Asia-South Asia) project. He said the project would now be of 1,300MW instead of the originally envisaged 1,000MW.

The minister said the other states had adopted a resolution for the project’s implementation. He said Pakistan would clear the project in a couple of days.

He said Pakistan had agreed to resume work on the Torkham-Jalalabad road. About 57 per cent work on the road had been completed in 2008 when it was halted. The two sides agreed to realign the 170km Torkham-Jalalabad railway line through Loi Shalman valley bypassing Landi Kotal and create an 11km railway link between Chaman and Spin Boldak.

Mr Dar said Pakistan had removed all restrictions on Afghan transit trade through Wagah, including guarantee for goods transportation, insurance guarantee and permission for non-containerised vehicles.

Afghanistan has been asked to reciprocate by removing the requirement of cash guarantee on transportation of Pakistani goods to Central Asian republics.

BAILOUT PACAKGE: The finance minister said Pakis-tan had met ‘4.5’ of the five pre-conditions of the International Monetary Fund for a $6.6bn bailout package, while the remaining condition pertaining to the State Bank would be accomplished on Aug 27 when it would announce the monetary policy for the next two months.

He said the government had not accepted a condition of currency devaluation, except for natural devaluation.

In anticipation, the IMF management has already circulated the agenda and letter of intent of the Pakistan government to its executive board which will meet next month to approve the assistance programme.

He said that with the IMF programme and assistance from the World Bank and Asian Development Bank a total financing package of $12bn had been put in place that would take care of all external liabilities for three years.

He said the international lending and credit agencies were looking positively at Pakistan after the recent political transition and corrective measures taken by the government.

FISCAL DEFICIT: Mr Dar said the country had concluded the last financial year with a fiscal deficit of 8pc against the originally estimated 8.8pc as a result of cutting expenditures. He said the fiscal deficit of the federal government was estimated at 8.2pc but it dropped to 8pc (Rs1.834 trillion) because of Rs57 billion cash surplus provided by the provinces.

He said the FBR had missed its revenue target last year by a big margin and collected Rs1.936tr instead of Rs2.381tr. The total revenue stood at Rs2.982tr, including tax revenue of Rs2.231tr and non-tax Rs751bn. Total expenditure was Rs4.816t, while Rs368bn was provided for subsidies and Rs342bn for circular debt.


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Comments (8) Closed


Anwar Khushab
Aug 27, 2013 07:35am

Has anyone noticed two points. First, Mr Dar is producing one wish after another, and is asking the multilaterals to finance them. He appears to be totally innocent of the idea that these are Pakistan's priorities and therefore Pakistan has to make a substantial contribution to financing them. But that would mean taxing his constitutents, so he won't do it. Second, he appears not to be bothered that multilateral (or any other) borrowing will add to Pakistan's external debt. I suppose he is not bothered because he expects some other government to repay it.

Red Dawn
Aug 27, 2013 09:52am

Another Kalabagh dam in the making.... Hahahahahahaha this time by PML N instead of PPP

S. Israr Ali
Aug 27, 2013 11:11am

The Accountant Finance Minister has come out with strange logic again to deceive people that he has not accepted the condition of devaluation of currency except for natural devaluation.

Already the parity rate of Rupee has further slided down to Rs.104.33 per US Dollar during this short period of even PMLN government.

During the previous said to be the democratic government of PPP, the country saw debasing the nationl currency from Rs.60 per dollar sliding down to Rs.100 per dollar. This meant about 70% worth of rupee viz-a-viz., dollar lost i.e., in other words a common man of Pakistan for every Rs.100 held lost value of his hard earned rupee assets by Rs.70 during this period. This erosion in worth of rupee made an average Pakistani poorer by 70% on his hard earned assets in national currency while conversely gaining a fortune upward in same proportions by the elite classes on their assets held in other than in national currency.

Come the next said to be democratic government of PMLN with much fanfare,highly critical of their predecessors of large scale all round corruptions, frauds and incompetence, loud and tall claims that they now not only will arrest the situation but will reverse the trend. On the contrary what we see unstoppable further free down sliding of national currency and even during this short period of their stint when rupee has come to close at Rs.104.33 per dollar with no prospect in view of checking this down sliding.

Earlier lso at the time of PMLN government, similar debasement of national currency took place when the parity rate of rupee saw unprecedented decline as was ruling at Rs.86 per US Dollar. With however, taking over the government by military in 1999, the conditions altogether changed and same rupee drifting lower saw increase in its value to dollar to close at Rs.60 per dollar which remained stable all through this period and almost fluctuated in same band making an average Pakistani richer with stability and confidence in national currency while elites left moaning with their foreign assets.

One wonders if in the name of democracy the nation is being made fool and game of fraud and loot making average Pakistanis poorer and poorer groaning under sufferings conversely benefitting the elite classes holding assets in other than rupee making them richer and richer at the cost of poor masses is continuing.

The PM as well as the Federal Finance Minister, who by profession is an account

M S Ahmad
Aug 27, 2013 12:22pm

The GoP has still not understood and is therefore incapable of

M A Baig
Aug 27, 2013 01:19pm

Pakistan has a simple choice - build dams or be damned

Waqas Mumtaz
Aug 27, 2013 03:32pm

I like to read dawn news. News are displayed with very good explanation and authentic. Keep doing good work.

amd
Aug 27, 2013 10:51pm

Pakistan should give topmost urgency to construction of dams for hydroelectric power because the benefits are huge.It is really surprising that with so many rivers and such a huge potential of hydro power(@50000MW),Pakistan has lagged behind in electricity production..If this backlog is cleared ,Pakistan can one day start exporting surplus electricity

Pervaiz Syed
Aug 27, 2013 10:59pm

It appears from the Finance Minister's statement that financing for Dasu project is in order and construction contract documents are almost complete. Congratulations.