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Project to import 1,000MW electricity to be completed in 5 years Work on trade corridor project not abandoned: World Bank

The World Bank has said that the multi-billion dollar National Trade Corridor project connecting Pakistan, Afghanistan and the Central Asian republics by air, road, rail and sea has not been abandoned and is currently being restructured.

“The World Bank’s sector expert [Amir Durrani] is working to restructure the project; it is not a dead project,” said the World Bank’s senior operation officer for South Asia Diep Nguyen Van Houttee. She was addressing a training workshop for South Asian journalists on Wednesday.

Houttee said that feasibility studies for importing electricity from Tajikistan and Kyrgyzstan for Pakistan have been completed and negotiations are currently underway to determine the respective shares of Pakistan and Afghanistan from the 1,400 MW the Central Asian states are willing to supply. “The cost of the CASA project is estimated at $953 million and after approval, the project will be completed in the next four to five years,” she said. The official said that while the amount of financing the World Bank would provide had not been finalised, its share was expected to be substantial.

According to Houttee, the Bank was asking both Pakistan and Afghanistan to fully implement the newly-placed transit agreement. When asked to comment on possibility of World Bank funding the Bhasha dam in Pakistan, she would only say that discussions were currently underway.

Earlier, during a session about trade, energy and regional cooperation in South Asia, Houttee had pointed out that there was a significant amount of informal trade within the region, which could be reduced by the removal of non-tariff barriers. And that by allowing transit facilities, countries stood to earn a great deal of revenue.

She also said that the Bank has asked Pakistan to arrange a regional trade forum, which would allow all states to explore the possibilities for enhancing cooperation.

Meanwhile, via video link from Kabul, the Bank’s task team leader on CASA Richard Spencer said that given Pakistan’s very substantial energy shortage, Afghanistan is eying transit fees as a major source of revenue. However, he added, Afghanistan would have to demonstrate its reliability as a trading partner by improving its security situation.

According to Salman Zaheer, programme director for regional integration at the World Bank South Asian Region, the Bank is working on regional integration in this part of the world since studies suggest integration could boost the GDP of the participating countries by two to three percent.

Meanwhile, Dr Ratnkar Adhikari of the South Asia Watch on Trade said that he had proposed the setting up of a Least Developed Countries fund to compensate smaller countries, which could be hit by enhanced regional cooperation. The list of LDCs he proposed included Bangladesh, Nepal, Afghanistan and Bhutan. Adhikari said that Afghanistan’s trade deficit with regional countries stood at $2 billion and Bangladesh’s at $4 billion while India was enjoying a trade surplus of $9 billion with regional countries.

“If proper care is not taken, the LDCs will be further marginalised by the regional trade arrangement,” he added.

Addressing the workshop, Nepal’s former commerce secretary Purushottam Ohja said that trade facilitation was a key area for the SAFTA agreement and transit trade was also a crucial issue.

“Port inefficiency is a major issue for all countries, especially the landlocked ones,” he said, adding that regional trade was still being impeded by tariff barriers and the absence of harmonised standards.

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