ISLAMABAD, Dec 18: The World Bank on Wednesday expressed its serious concern over the failure of the government to implement the resettlement and environmental agreements under the Ghazi Barotha hydropower project.

In a letter to the secretary of the Economic Affairs Division and chairman of the Water and Power Development Authority, the bank warned that further failure in implementing agreements could result in the suspension of disbursement and possible cancellation of the loan.

The World Bank noted that combination of intensive visits to the hydropower project by bank staff and ongoing dialogue and correspondence over several years had drawn attention to the problems related with the implementation of the project.

“Today’s letter notified the Government of Pakistan that the bank would invoke the legal remedies under the loan agreement of March 17, 1996, if failure to implement the agreements was not reversed by Jan 31, 2003,” said an announcement made by the local office of the World Bank.

The outstanding issues which had not been successfully addressed included three areas in particular.

The first was the Resettlement Action Plan (RAP), designed to compensate people affected by the Ghazi Barotha project. The bank was specifically concerned that there had been a failure to comply with the Compensation Agreement and Action Plan, which set out in detail the compensation payable for the acquisition of different classes of land.

There had also been continued violations of the fundamental principles set out in the RAP for determining the level of compensation.

The second area of concern for the bank related to the environmental aspects of the Ghazi Barotha project, including the development of Wapda’s environment management capacity, analytical work on the environmental aspects of the project, and the construction of waste water treatment plants.

The third area of concern was the outstanding resettlement question related to an earlier project, the Tarbela Dam. The bank said there had been a “minimal progress” in taking satisfactory and timely actions to address the outstanding resettlement issues. A commission for Tarbela Dam’s victims had made recommendations in 1999 and the bank had repeatedly stressed the need to take concrete actions to implement them.

Further, the bank noted that Wapda was not in compliance with the financial covenants of the project and that the implementation of a previously agreed Financial Improvement Plan had been inadequate.

While the World Bank supports efforts to eradicate corruption and to ensure accountability through due process, it repeated its serious concern about the manner in which the investigations with regard to the Resettlement Action Plan implementation were being carried out.