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| Pakistan violating Indus Water Treaty | | India to lodge protest against Neelum-Jhelum project | |
BL KAK
NEW DELHI, JAN 5
Unabated river water row between India and Pakistan is set to take a serious turn, with New Delhi expected to lodge a strong protest with Islamabad over the latter's plans to construct a hydro-power project utilising the waters of the Jhelum river flowing from Kashmir into Pakistan occupied Kashmir (PoK).
A Ministerial source told EARLY TIMES that the Union government would formulate its line of action "only after we get a detailed report about Islamabad's scheme of things". The source said that if Pakistan had forced India to suspend construction of a power generating project in Kashmir after Pakistan raised a hue and cry over the alleged violation of the Indus Water Treaty by India, the government of India "just cannot be expected to be silent after Islamabad is found going against the provisions of the treaty".
India's Foreign Office is said to have received broad contours of Islamabad's plan in relation to the Neelum-Jhelum hydro-power project in Pakistan occupied Kashmir. New Delhi's formal protest will be lodged after a clear picture is made available by Indian High Commission in Islamabad.
Meanwhile the Musharraf government in Islamabad has divulged that it is contemplating arranging 1 billion dollars foreign exchange through a mix of buyer's credit and issuance of bonds to fund 969MW Neelum-Jhelum ydropower project in PoK following Wapda's inability to secure the lowest bid with financing facility. Wapda has been seeking about 600-800 million dollar buyer's credit as part of the EPC (engineering, procurement and construction) contract for the construction of 1.4 billion dollars project that is considered crucial to secure Pakistan's priority rights over Neelum waters -- a tributary of the river Jhelum threatened by the Indian move to use its waters for power generation and diversion.
The project has already been delayed by more than six years due to lack of public-sector allocations for the project. Several rounds of bidding have been held and cancelled for one reason or the other.The Neelum-Jhelum project should have been started in 1999 as originally planned. It is estimated to take at least seven years for completion.
Riaz Ahmad Khan, Pakistan's adviser on water and power, has been quoted by Dawn as saying that the entire project would cost about 1.4 billion dollars, and major financing would come from the Bank of China as buyer's credit and issuance of bonds while the remaining gap would be met locally. The mode of foreign financing was earlier changed by the government from supplier's credit to buyer's credit which would mean that Pakistan's sovereign guarantees would be provided for the loan.
A few months ago, Wapda received three bids for the construction of the project. The bid from a consortium of Vinci of France and the Frontier Works Organisation (FWO) that had offered to provide 800 million dollars credit on soft terms was rejected on technical grounds because the FWO did not have relevant experience as lead contractor.
The China International Water & Electric Corporation emerged as runner-up with a contract price of 1.8 billion dollars to complete the project and also offered financing facility of 800 million dollars but the bid money was too high. The lowest 1.3 billion dollars bid from a consortium of China Gezhouba Group of China and CMEC China was recommended by Wapda to the Pakistan government for approval.
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