WASHINGTON: The World Bank and the United States have both reconfirmed their commitment to financing the Diamer-Bhasha dam, Finance Minister Hafeez Shaikh told a briefing here on Monday.
Diamer-Bhasha is an under-construction roller-compacted concrete dam on the Indus River in Gilgit-Baltistan.
Upon completion, it would produce 4,500 megawatts of electricity through hydropower generation; store an extra 8,500,000 acre feet of water, extend the life of Tarbela Dam by 35 years and help control flood.
Diamer-Bhasha would be the highest RCC dam in the world. According to a November 2008 estimate, the dam will cost about $12.6 billion.
“The Asian Development Bank also has reconfirmed its commitment to the Diamer-Bhasha project,” the finance minister said.
Dr Shaikh, who is in Washington to attend the World Bank’s spring meetings, said that the Americans were also providing $223 million for Mangla and Kurram-Tangi dam projects.
The minister said the government was quietly working on enhancing Pakistan’s capacity to produce affordable energy “but projects like these are not done overnight”.
Dr Shaikh pointed out that increasing oil-generated energy was not a correct solution for the country’s needs as it was an expensive and unaffordable source.
Later, some members of Finance Minister Hafeez Shaikh’s team told journalists that the government also had no problem with the Punjab government’s intention of buying electricity from India.
But a 40-mile grid line is needed to connect east and west Punjab and that will require investment from international financial institutions.
During their stay in Washington, the finance minister and his team had a series of meetings with World Bank, IMF, ADB and IFC officials.
They also had bilateral meetings with finance ministers of friendly countries but their most important meetings were with US officials, which included US special representative Marc Grossman.
Soon after the meetings, Mr Grossman left for Islamabad for talks on restoring strained relations between the two countries.
During these meetings, the US side urged Pakistan to reopen Nato supply routes to Afghanistan, saying, “Now that your parliamentary review is over, there’s no justification for further delay,” a senior diplomatic source told Dawn.
The Pakistani team urged the Americans to release about $2 billion the US owed Pakistan as reimbursement of expenses incurred in the fight against terrorism.
Dr Shaikh and his assistants also met officials of the world’s two major rating agencies, Moody’s and Standard and Poor. The discussion focused on Pakistan’s fiscal deficit, external accounts and on the government’s efforts to reform the economy.
“The message we gave them is that despite problems, we are making serious efforts to reform our economy and we believe that we left a good impression,” a team member said.
Moody’s places Pakistan in category B3 economies, which face challenges but are moving towards stabilisation.
Asked if Pakistan was also seeking another financial arrangement with the IMF, the finance minister said: “Our talks with the IMF are part of a continuing process. The message we are sending is that even though we have opted out, we are observing fiscal discipline and will continue to do so.”The IMF views Pakistan as a country which is “facing an uncomfortable economic situation, but it’s manageable and is moving towards stability”, said a member of the finance minister’s team.
The IMF was told that the government had brought inflation to single digit earlier this year but it slipped back to double digits. “Still, the IMF appreciates that bringing it from 14 per cent to 10.8 per cent is an achievement,” an official said.
The finance minister noted that after five years, Pakistan’s growth rate had gone up to four per cent of the GDP and the government was determined to push it up to six per cent.
The country’s exports, he noted, had reached a record level of $25.2 billion earlier this year while remittances jumped to a record high of $13.5 billion.