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Delay in Chinese loan puts Neelum-Jhelum project in doldrums

The Neelum-Jhelum hydropower project is facing shortage of funds that could slow the pace of construction providing an edge to India, which is building Kishanganga project on the same Neelum river on its side of Kashmir, a senior official of Ministry of Water and Power said.

According to the Indus Water Treaty the country that first completes its project on Neelum tributary will have the priority rights on the water of Neelum River.

The financial situation of the project got worse as Pakistan did not get the expected credit line of $448 million from China, the official said.

The Chinese were delaying the credit line either on pressure from India or to exert pressure on Pakistani authorities to revise the financing rates of the project, the official said quoting the assessment of the EAD officials.

If Pakistan fails to complete its project before India, then it will lose the water rights to the upper riparian country.

Keeping in view the importance of the project, the official revealed EAD secretary Dr Waqar Masud dashed to China for two days last week to get the loan of $448 million, which the top man of China had committed during the visit of President Zardari to Beijing in 2009.

The Chinese Exim bank did not entrain Masud saying it would give the loan at appropriate time, although three years have elapsed since the commitment of China to Pakistan.

The Chinese Exim bank is delaying the disbursement of the loan since 2009 despite the fact bank’s team came to Islamabad in 2011 and visited the site of project where in it expressed satisfaction. However, the Chinese bank is still evasive in funding the project knowing the fact that Chinese contractor is completing the project. It is pertinent to mention that China has already refused to provide finding for Iran Pakistan gas line project.

The officials are surprised that Beijing has immediately released $130 million for the Chilas Road in Sakrdu, whose PC-I is even not approved just because of the fact the said road would connect border of China, but when it comes to the country’s strategic project, it is delaying the disbursement of the loan.

When asked as to how the construction work is underway on the site of the project on main components keeping in view the acute financial constraints, the official said the Neelum-Jhelum Hydropower Company has acquired the loan of Rs6 billion from Wapda, which itself is a cash-strapped entity and if Pakistan fails to manage funding for the project, it is quite obvious that the pace of construction will alarmingly slow down.

“We are in contact with Islamic Development Bank, Saudi Development Bank, Abu Dhabi Fund, Kuwait Fund for the required finding,” the official said.

He said that IDB has committed $200 million, Saudi Fund $337 million, Abu Dhabi Fund $100 million and Kuwait Fund $30 million and the government is pursing the said donors to expedite the disbursement of their credit line for the timely completion of the project.

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