Pak seeks assistance form FoP for 54 mega projects

Islamabad: Pakistan has sought assistance from Friends of Pakistan (FoP) for 54 mega development projects, including 8.4 billion-dollar Diamer Bhasha dam, and Neelum Jhelum hydropower project.

According to the sources, a formal announcement for assistance may come in the next ministerial meeting of the FoP that the Japanese government has offered to host.

'Friends of Pakistan' forum, considered to be President Asif Ali Zardari's brainchild, was launched in New York on September 26, 2008 on the sidelines of the 63rd United Nations General Assembly meeting held in New York. The FoP membership consists of countries that are also members of the aid-to-Pakistan consortium, which was constituted in 1960 by the World Bank in an effort to facilitate co-ordination amongst the major assistance providers to Pakistan as well as for other debtor countries.

By 1991, the consortium held about 92 percent of Pakistan's outstanding disbursed debt. The aid-to-Pakistan consortium's members include the United States, Canada, Japan, Britain, Germany, France, and international organisations such as the World Bank and the Asian Development Bank. The FoP has four additional members, namely China, United Arab Emirates (UAE), Turkey and Saudi Arabia.

The second meeting of the FoP was held in Dubai on November 17, 2008 with Pakistan and the UAE joint hosts. At that time, the Pakistan government had submitted proposals for 71 projects, costing a total of 60 billion dollars, which was labelled by several 'friends' of Pakistan as a wish list.

The government has since scaled down its expectations and has sent a list of 54 projects to the FoP, though the exact cost of these projects has not been made known. However, the Planning Commission is also working on identifying projects near completion for which funding is not available from the domestic resources due to paucity of funds.

This is in spite of the fact that Public Sector Development Programme (PSDP) was slashed by Rs 100 billion with an ongoing exercise to cut another Rs 70 billion. An important meeting was held in the Planning Commission on Thursday last and concerned ministries have been directed to prepare a list of the projects that are on the verge of completion.

The Planning Commission will soon hold a conference of concerned ministries to finalise the list of ongoing projects to seek assistance from the FOP, the sources added. The government has released only Rs 71 billion - 19 percent of the total allocation for PSDP - in the first six months of the current financial year due to financial constraints.

In a meeting held last Thursday, it was decided to seek assistance for Kachhi canal (phase11) and Rs 5.3 billion Khan-Khawar hydropower project from the FOP. The estimated cost of former project is Rs 3.12 billion and the government had allocated Rs 500 million in PSDP, whereas the PSDP allocation for the latter is Rs 1.1 billion.

The government has sought assistance for 8.4 billion dollars for Diamer Bhasha dam with an estimated capacity of 4500 MW power generation to Japan International Co-operation Agency (Jica).

The government has allocated Rs 200 million in the current year PSDP and is also seeking financing from other donors, including International development Bank (IDB)), China and Asian Development Bank (ADB). The sources said the government was focusing on the energy projects that could bail out the economy of the country. The energy crisis has hit the economy that could lead to reduction in growth rate.

According to the sources, Pakistan is also seeking assistance for Neelum Jhelum hydropower project from Saudi Arabia, UAE and China. The other main energy projects include 800 MW Gudu steam power project; 330 MW combined cycle Dadu power project; Golan Gol hydropower project and Munda dam.