$5bn to be sought from Friends of Pakistan (FOP) for power projects

[LahoreEstate]

Thursday, January 29, 2009
By Mehtab Haider

ISLAMABAD: The government has divided Diamer-Basha dam into two main categories for meeting financing requirements of $11.34 billion under which it will arrange financing of $6.5 for accomplishing civil works from its own resources while remaining $5 billion will be sought from the Friends of Pakistan (FOP) in shape of investment as well as soft loans for installing power generation equipment.

Deputy Chairman Planning Commission Sardar Asif Ahmed Ali revealed this while talking to a select group of journalists here at his office on Wednesday. He said inter-ministerial level meeting would be held at the foreign ministry on Thursday in order to further see the strategy for FOP forum related to four clusters such as security, development projects, energy cooperation and institutions capacity building.

He said the ministry of water and power as well as WAPDA was also on the board for taking a decision to unbundle the most crucial project of Basha dam on which work would start from next financial year 2009-10. “We have also rationalised the cost of development projects by 50 per cent which will be tabled before the FOP forum in its next meeting by Feb 20-21 in Islamabad.

The estimated cost of development projects has been brought down from $60 billion to $30 billion for 71 projects,” Deputy Chairman Planning Commission said.

Regarding unbundling of Basha dam, he said civil work for construction of the dam as well as interest cost during construction would be borne by the government through Public Sector Development Programme (PSDP) by arranging $6.5 billion while the remaining $5 billion would be generated by asking private sector such as IPPs as well as donors to arrange soft lending for installing power generation equipment.

The donors and investors will not be interested in selling water he said and added that the foreign and local investors as well as donors would be interested to provide their money for generating 4,500MW electricity.

Another project for skill development will also be tabled before the FOP forum for seeking $500 to $600 million investment under which One Center for Technical Training would be established in each district of the country that would help to train 2,50,000 youth in various sectors on per annum basis.

The Microsoft has agreed to join hands for developing skills of Pakistani youth for this programme, he added. He further said the FOP forum would be asked to provide financial resource for establishing college of nursing in each division of the country.

He said he received total cost in the range of $46 billion for the development projects going to be tabled before the FOP forum and he asked the ministries concerned to bring realism in it by rationalizing their cost. “We are continuously looking at the list and so far the cost has been brought down from $46 billion to $30 billion,” he added.

He said the government would also seek assistance from the FOP forum in areas of agriculture, construction of cold storages, maritime industries for increasing number of ship flags from existing 14 to around 50 flag ships, National Trade Corridor (NTC), creating water way in 36,000 canals, developing shipyards at Qasim and Gawadar ports.

He also said Chashma-2 and 3 would also get financing in order to meet the energy requirements of the country. He said the upgradation of Higher Education Commission (HEC) related projects would seek FOP assistance in the range of $373 million. There are 32 small and medium size dams, which are also included in the list presenting in the FOP forum.

The government has also sought $325 million from FOP forum for construction of Korum Tangi dam.

http://www.thenews.com.pk/daily_detail.asp?id=159562