In a move that may appal India, Pakistan today agreed to finance the Diamer-Basha dam, a gravity dam on the Indus river in Gilgit-Baltistan's Diamer district.
Prime Minister Nawaz Sharif today approved, in principle, the financing plan for the dam which has faced objections from India in the past.
Sharif directed the water and power, planning and finance secretaries to expedite work on the financial proposal and start related preparations to ensure the physical work on the dam's construction kicks off before the end of 2017, Dawn reported.
The development comes a day after Pakistan was rebuked for terror at the Heart of Asia summit held in Amritsar, India.
Prime Minister Narendra Modi called for dismantling of terror sanctuaries. "Terrorism and externally induced instability pose the gravest threat to Afghanistan’s peace, stability and prosperity. And, the growing arc of terrorist violence endangers our entire region. As such, support for voices of peace in Afghanistan alone is not enough.
"It must be backed by resolute action. Not just against forces of terrorism, but also against those who support, shelter, train and finance them," PM Modi had yesterday said.
Snubbing Pakistan over terrorism, Afghanistan President Ashraf Ghani said, “We need to identify cross-border terrorism and a fund to combat terrorism. Pakistan has pledged 500 million dollars for Afghanistan's development. This amount, Mr. Aziz, can be spent to contain extremism,” directly addressing Pakistan Prime Minister Nawaz Sharif’s Foreign Affairs advisor Sartaj Aziz.
The Diamer-Basha dam has faced several setbacks because major sponsors, including the World Bank and Asian Development Bank, refused to finance the project. According to them, the dam's location is in a disputed territory, and they asked Pakistan to get a no-objection certificate from neighbouring India.
The dam portion of the project will be constructed through Public Sector Development Programme (PSDP) allocations and Water and Power Development Authority (Wapda) generated resources.
The remaining financing for the power-generation portion will be arranged on commercial basis by the ministry either through Wapda or through leasing its existing projects.
The dam was approved for construction by the Council of Common Interests (CCI) in 2009. Efforts to finance it through multilateral donors had been prolonged.
The Diamer Basha dam will provide 8.1 million acre feet (MAF) of gross storage. Of this, 6.4 MAF will be live storage and a capacity to produce 4500 MWs of cheap and clean energy. The premier also appreciated the fact that the land acquisition for the dam has been completed.
The construction of Diamer-Basha dam was originally scheduled to be completed in 2016, and then in 2019 after the military regime of Gen Pervez Musharraf decided on its construction. But work on the project did not progress at all during his rule.
India in the aftermath of Uri attack decided to revisit the Indus Waters Treaty in order to teach its neighbouring country a lesson. "Blood and water can't flow together," PM Modi had said.
