Energy crisis: no assistance from US so far, National Assembly told

[Naveed Yaseen]

ISLAMABAD (November 13 2009): Federal Minister for Water and Power Raja Pervaiz Ashraf on Thursday informed National Assembly that the United States has not so far provided any financial assistance to overcome the energy crisis. However, US is planning to provide $125 million assistance for short-term measures in the power sector.

In a written reply, he said that the terms and conditions have not yet been decided on financial assistance by the US to overcome the energy crisis. To a question, he said that no proposal to provide free electricity to agriculture is under consideration at PEPCO level.

Responding to a question on rental power plants, he said a service has been contracted with availability of the Rental Plants between 88-93 percent. Incidentally, the availability for IPPs is a maximum of 86 percent. The availability of the Rental Power is governed through following guarantees/assurances:

The penalties shall be imposed @ 1.5 times of monthly rent in case the plants do not perform to the levels as prescribed in the contract. In case after commissioning the plant generates less power by I0 percent or more of the prescribed level the Government can cancel the contract and also impose above penalties.

As such on the face of it, the origin, make, year of manufacture is not relevant but for the guarantee that the requisite service will be available as per Rental Service Agreement (RSA). The period, for which, these plants will remain installed in the country, is 36 to 60 months. As per rental service contract, the seller is at liberty to shift the plants back to those countries or whenever he wants after completion of the prescribed period.

Answering another question, he said that the present status of the dispute on the construction of Wullar Barrage and Kishenganga Dam with India is given as under: In case of Wullar Barrage, India started construction of storage work namely Wullar Barrage and Storage Project in the garb of "Tulbul Navigation Project" in 1985 without informing Pakistan. Pakistan raised objections that India is not allowed to construct such storage on the main stem of river Jhelum.

The issue was discussed between India and Pakistan at the level of Commission and at the Government level, and the work was got suspended in 1987. Since then, thirteen rounds of Secretary-level talks have been taken place till August 2007 for resolution of the issue. The issue falls under the ambit of composite dialogue between the two countries since 2003. The work at the site is still suspended. Last physical inspection of the site was carried out in March 2007.

Kishenganga Hydroelectric Plant, India informed in 1994 about construction of "Storage Work" incorporating a power plant to produce 330 MW hydel power by directing the flow of river Jhelum into another tributary of river Jhelum, Pakistan raised objections on the design of the plant and the diversion of waters to Wullar Lake. The Commission deliberated on the issue in its 5 meetings from November 2004 to November2005. India ultimately changed its project from "Storage Work" to "Run-of-River Plant"

The detailed information about Run-of-River plant was received from India on 25 June 2006, according to which dam height was reduced by 40 meters. However, the power generation capacity of 330 MW and diversion of water to Wullar Lake remained the same as proposed in the "Storage Work". Pakistan raised objections under the relevant provisions of Indus Water Treaty as the proposed diversion has adverse effects on Pakistan's Neelum Jhelum Hydroelectric Plant under construction by WAPDA in addition to environmental effects in the Neelum Valley. Four meetings of the Commission from June 2007 to July 2008 remained inconclusive.

Pakistan Commissioner notified India Commissioner on 11 March 2009 to resolve the "differences" regarding the design of Kishenganga Hydroelectric Plant through "Neutral Expert" and for the "disputes" of "diversion of waters" and "drawn down of reservoirs below DSL" through a court of Arbitration. The Government of Pakistan has undertaken the required steps provided in the Treaty accordingly. However, India denies arising of differences and disputes and insists to continue the discussion at the level of the Commission, which from our point of view is an effort to stall on the resolution. Pakistan is processing the case for establishing Court of Arbitration and appointment of Neutral Expert under the provisions of the Treaty.

Minister for Water and Power said there is a provision in the Indus Water Treaty 1960 for its edification through mutual understanding. However, neither India officially asked for revision nor Pakistan deems it beneficial. Rather Pakistan wants that the Treaty may be implemented in its letter and spirit. Clearly, there is no proposal under consideration by the Government of Pakistan to revise the Indus Water Treaty 1960.

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