Ministry of Water and Power (MoWP) has requested the Finance Ministry and Planning Commission to earmark Rs 53 billion for 4500MW Diamer Basha dam in the upcoming budget 2010-11, Business Recorder has learnt. In budget 2009-10, government had earmarked Rs 8 billion for Diamer Basha Dam Project for Acquisition of Land & Resettlement and Rs 15 billion for construction of dam.
"Government and affectees of Basha dam have reached an out of court settlement under which government would pay Rs 40 billion to affectees during a three years period," sources said adding that now the Water and Power Ministry would require funding to pay compensation to the affectees. Money is also required for the construction of the dam.
"Government may allocate Rs 8 billion for the dam, but the decision to this effect will be taken in Annual Plan Co-ordination Committee (APCC) scheduled to meet on May 21," sources maintained.
Sources feared that the construction of the dam might be delayed as Ministerial committee had inked an agreement with affectees by granting100 percent royalty rights to Gilgit-Baltistan which may fuel a tug of war between North-West Frontier Province (NWFP) and Gilgit-Baltistan on the launch of the multi-billion dollar Basha dam project.
The government is currently seeking financial support from the United States, Islamic Development Bank (IDB) and Asian Development Bank (ADB) for Diamer Basha dam costing an estimated $12 billion, with an estimated 4500 mw power generation capacity. "Any controversy between NWFP and Gilgat-Baltistan on the royalty issue would make fund raising a challenge," sources said.
ADB has already urged the government of Pakistan to develop a consensus among all stakeholders on the project as any controversy on the dam would endanger investment. ADB has sought firm commitment from the government about ownership of the Basha Dam by passing a resolution from National Assembly. Sources said that the issue of boundary between Northern Areas and NWFP is still to be resolved.
"The royalty issue is to be determined by the boundary of the province where the project is to take off," sources said, adding that in the agreement, the ministerial committee had decided to seek help from Supreme Court of Pakistan to form judicial commission for resolving the issue of the boundary.
As many as 30,000 families, living in 31 villages, will be affected due to the construction of the dam and the government will build nine model villages for the affectees in the vicinity of the reservoir, according to the agreement. Under the agreement, 37000 acres of land will be utilised for the dam.
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