Federal Government is preparing a decade long action plan to implement reforms in water sector through National Water Policy (NWP) as well as to yield minimum investment of Rs 883 billion (dollars 14.8 billion) for construction of new dams, canals, and improvement of drainage system.
In future, official sources disclosed, the water infrastructure investment would have to be accompanied by a greater and more balanced focus on increased efficiency, demand management, and improved productivity that will require significant institutional and policy reforms.
Recognising the need for change, official sources stated the Government has initiated actions intended to stimulate reform in the water sector. In October 2004, the Ministry of Water and Power endorsed the draft National Water Policy (NWP) that is anticipated for approval by the Cabinet. Moving forward on the new NWP was a key recommendation of the ADB-supported Water Sector Strategy (WSS) study completed in October 2003. Both the WSS and the draft NWP will require restructuring of institutional arrangements at the federal level to improve water resources management and sector strategic planning and policy analysis. Both the WSS and draft NWP call for development of an apex body for water resources management that would require significant capacity development.
Under the new proposed plan, the apex body would carry out expanded and improved strategic planning and policy analysis, and help forge a consensus on a water sector strategy and master plan. The apex body would also develop a framework and common matrix for project assessment to ensure that infrastructure investment achieves maximum developmental impact. Development of the apex body and the capacity to ensure its effectiveness are key objectives of the Government and are necessary to improve infrastructure investment within the water resources sector.
Presently, Agriculture uses about 95 per cent of the water resources of Pakistan. Until the 1990s, expansion of water supplies for irrigation, first from surface water until the 1970s, then from groundwater through the mid-1990s, was a key engine of agriculture sector growth. Investment in water resources and irrigation infrastructure has declined steadily since the 1980s. Since that time, it has been limited to a few projects and piecemeal rehabilitation that has failed to halt the steady deterioration of substantial asset base caused by the lack of resources for operations and maintenance, and ineffective institutional arrangements and governance. The recent severe drought that lasted from 1999 to 2001 and reduced water supplies by up to 50 per cent helped galvanise the Government's focus on the sector and on the need for greatly increased investment.
THE RESPONSE OF FEDERAL AND PROVINCIAL DEPARTMENTS, AND AGENCIES HAS BEEN:
(i) to propose a huge portfolio of projects to develop over the medium to long run new storage reservoirs and canals; and
(ii) during the short run, to rehabilitate and line the canal distribution system, including the vital but aging barrages.
In addition, the provinces have identified quick gestation investments that would benefit water-deficit areas, such as small dams and spate irrigation systems.
However, the combination of rising water demand in agriculture and other sectors, high population growth, and persistent rural poverty have brought into sharp focus the long-term scarcity and limits to water resources development in Pakistan. Also there is a growing realisation that the traditional supply-driven approach may no longer be appropriate to achieve the needed high economic growth rates.
Long-term incremental needs for additional water resources in all sectors, including environmental flows in the lower Indus River, are greater than the available incremental supply of water from all sources regardless of how much new storage is built. Hence, in the future, water infrastructure investment will have to be accompanied by a greater and more balanced focus on increased efficiency, demand management, and improved productivity that will require significant institutional and policy reforms.
In March 2004, the Government proposed Rs 883 billion (dollars 14.8 billion) long-run programme of investment in new dams and canals to be implemented over the next 10 years, and in more immediate system improvement and drainage. However, investment in the water resources sector in Pakistan has been and continues to be problematic.
The Public Sector Development Plan (PSDP-FY03-04) for water resources and agriculture is about Rs 15 billion, and carry forward to finance completion of ongoing and recently started projects at the end of the FY04 will be about Rs 350 billion. The FY 04 PSDP budget was a 36 per cent increase over FY 03 PSDP, but at that level of funding over next five years, total investment of about Rs 72.5 billion would be over Rs 270 billion short of funding needed to complete projects being carried forward. Failure to complete projects in the PSDP has been a persistent problem caused not only by a long period of fiscal stringency, but also by over commitment to too many projects and to long gestation periods. Achieving much higher economic growth targets on the order of eight per cent or more will require greater attention to project completion during the plan period, as well as to quicker-gestation investments that yield early returns.
To achieve greater development impact from infrastructure investment, there will need to be greater clarity of objectives with a more coherent strategy that addresses the challenges of future. This will require a more integrated approach and greater emphasis on introducing new thinking about how inefficient water use could be reduced, in addition to simply looking at large storage projects. To help meet the Government's macroeconomic growth objectives, an analytical and institutional framework is needed for setting investment priorities and reshaping water infrastructure portfolio. Achieving this will require capacity development along with restructuring of the institutional arrangements for water resources management.
Commenting over the "Key Issues in the Water Resources Sector", sources disclosed that ADB-supported WSS and a more recent World Bank sector review provide considerable analysis of the challenges and issues Pakistan must address in future. Pakistan diverts an average of 103.8 million acre-feet of Indus River Basin flows (about 72 per cent of the mean annual flow) through 16 barrages into 37 canals to irrigate about 36 million acres of land. The system has only about 12.8 million acre-feet of storage, just about 12 per cent of current use. Nevertheless, this storage is crucial because it provides 89 per cent of existing hydropower capacity, as well as the capacity for carry over of water from high-flow summer season to the arid, low-flow winter season, enabling a major increase in annual cropping intensity.
According to Pakistani experts, the Indus River Basin is a major, complex hydrologic system that must be carefully managed yet responsibility for managing the infrastructure is divided between the Federal and Provincial Governments. Water distribution to farmers and other users has always been a provincial responsibility in Pakistan, while inter-provincial water management, including reservoir operation, has been a Federal responsibility. Major capital works such as new major dams and canals are normally built by the Federal Government, but operated by the provinces. They are an integral part of the provincial water distribution system.
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