WB urges settlement of Dasu land acquisition issue

Updated 28 Sep 2019


The WB warns that further delay will result in cost increase, deprive national grid of additional cleaner energy. — Photo courtesy of pak workers.com
The WB warns that further delay will result in cost increase, deprive national grid of additional cleaner energy. — Photo courtesy of pak workers.com

LAHORE: The World Bank has pressed the government to immediately resolve the issue of land acquisition for the Dasu hydropower project (Stage-1) with a warning that further delay will not only increase its cost but also delay the addition of much-needed cleaner and cheaper energy to the national grid.

Following the warning, the Executive Committee of the National Economic Council (Ecnec) has placed the issue on top of its agenda for its Oct 2 meeting, according to documents available with Dawn.

“Following our discussions on Aug 22, 2019, I appreciate your interventions in expediting the resolution of the land acquisition issues associated with the rates to be paid. Unfortunately, since then, the process was further delayed causing a near standstill of all construction activities,” said WB Country Director Patchamuthu Illangovan in a recent letter to the PM’s adviser on finance.

“The continuing delays will result in additional cost to the government and prevent the addition of much-needed cleaner and cheaper energy for the betterment of the economy. I understand that the federal agencies and the government of Khyber Pakhtunkhwa are near to finalising the necessary legal instrument for the enhanced land compensation levels. We sincerely hope that this would be placed before the Ecnec as a priority and the problem resolved fully and finally,” said the letter.

Warns that further delay will result in cost increase, deprive national grid of additional cleaner energy

The DHP-I has been facing a holdback for four years due to issues in acquisition of land for the project infrastructure. Though all contractors for the construction of the project have been mobilised and are on site, the progress is practically at a standstill due to the unavailability of land. Since 10,000 acres of land are required for the project, only 700 acres of the 2,700 acres needed for infrastructure footprint have been acquired so far. The land acquisition for the project is being carried out using the guidelines of KP’s Land Acquisition Act, except for determining land and property rates given the special conditions in the area, absence of land markets, and that similar projects (such as Diamer-Bhasha, Kyal Khawar, etc) are carried out by the federal government using negotiated rates.

Due to these reasons, rates for various categories of land were initially approved by the Ministry of Water and Power (the relevant ministry at that time) and the Ministry of Finance, as required, according to the legal agreements for the project between the WB and the government of Pakistan. The rates were notified after approval by Ecnec on Nov 14, 2015. Section 4 for land acquisition for the project area was issued in 2013 and 2014. However, given Kohistan’s unique situation (the lack of records and the security situation), the preparation of land records has taken a long time. Since 2015 people in the area have constructed structures and developed land by making terraces, etc. In addition, people demanded revision of land rates as the rates determined in 2015 were not revised according to inflation.

The district administration and KP government expressed their inability to deal with this extraordinary situation that could not be addressed under normal conditions and prevalent laws, and brought the issue to the project steering committee (PSC) headed by the minister of water resources and KP chief minister in November 2018. The PSC held three meetings on this matter, and in March 5, 2019, decided that buildings and land developed after issuance of Section 4 in 2013 and 2014 will be recognised with an increase of 40 per cent in the land rates across the board and all categories of land will be accepted. And the PSC would seek approval of this change of rates and recognition of property and land development from the finance ministry as required under the project agreement and as needed from Ecnec quickly.

The Ecnec meeting held on July 15, 2019 approved the recommendation of the PSC and attached a condition that the sponsoring agency (water resources ministry)

will seek opinion from the ministry of law and justice division of the federal government regarding revision of cost of land and built-up property after imposition of Section 4 of Land Acquisition Act (LAA) 1894 within a week and submit a report thereof to Ecnec. The current situation is outside the LAA 1894 and regulations for land acquisition given the unprecedented situation in the project area. This resulted in the original decision being made by the PSC and subsequently approved by Ecnec in November 2015.

Published in Dawn, September 28th, 2019