U.S. considers funding Pakistani dam project, despite tensions

McClatchy NewspapersAugust 16, 2011 

ISLAMABAD — Even as U.S.-Pakistani cooperation on anti-terrorism programs is withering, the United States is considering backing the construction of a giant, $12 billion dam in Pakistan that would be the largest civilian aid project the U.S. has undertaken here in decades.

Supporters of a U.S. role in the project say American participation would mend the United States' tattered image, going a long way toward quieting widespread anti-Americanism amid criticism that the U.S. lavishes money on Pakistan's military while doing little for the country's civilian population.

Approval of the project still faces many hurdles. India objects to the dam because it would be in Kashmir, an area that India also claims. The project also is likely to face opposition from Pakistan's critics in the U.S. Congress, who've called for all aid to be cut off after Osama bin Laden was found hiding in northern Pakistan earlier this year. Recent Pakistani actions, including allegations this week that Pakistan had allowed Chinese military experts to inspect the wreckage of an American stealth helicopter that crashed in the bin Laden compound, are likely to inflame such criticism.

Still, proponents of U.S. aid for the project recall that the United States was popular in Pakistan in the 1960s and '70s, when Washington backed the construction of two enormous dams, Tarbela and Mangla.

"Getting involved in a long-term project like this is very compelling for us," said a senior U.S. official who asked not to be identified because no final decision on the project has been made. "This would be a huge demonstration of our commitment to Pakistan and our faith in the country's future."

The Diamer Basha dam would provide enough power to overcome Pakistan's crippling electricity shortage. Proponents of the project also claim that its water storage capacity, in a 50-mile-long lake that would be created behind the dam, would be so great that it would have averted last's years devastating floods, which deluged a fifth of the country, pushed 20 million people out of their homes and did an estimated $10 billion in damage.

The U.S.-Pakistani alliance since 2001 has been plagued by accusations in Washington that Islamabad is playing a "double game" by secretly supporting Afghan insurgents, while Pakistan thinks it's been bullied into acting against its own interests and that it's been unfairly blamed for American failures in Afghanistan. The unilateral American raid that killed bin Laden in May humiliated Pakistan's powerful military, causing anti-terrorism cooperation to be all but halted.

Diamer Basha also could bolster the credentials of the civilian side of Pakistan's government, which traditionally is locked in a struggle with the military over who'll dictate policy. The last two military-run governments didn't manage to build a large dam, leaving the country with a shortage of electricity that forces daily blackouts, known as "load shedding," that last for as long as 12 hours. The blackouts disrupt industry, throwing thousands out of work and creating misery in ordinary households.

Diamer Basha, to be located on the Indus River, would provide 4,500 megawatts of power, roughly the country's current shortfall, though it would take some eight years to build.

Shakil Durrani, the chairman of Pakistan's Water and Power Development Authority, said the dam had received Pakistani government approval and that he was confident of American support for the project, after talks with U.S. officials. The authority plans to develop a shortlist of contractors for the massive construction project at the end of this year.

"If we had a reservoir the size of Diamer Basha, the floods last summer would not have occurred," Durrani said. "This would be the largest project ever undertaken in Pakistan. It is our top priority."

The U.S. would provide only a fraction of the $12 billion needed to complete the project. However, the American money would be crucial in enabling other international finance sources to support the dam, especially the Asian Development Bank.

The U.S. official indicated that some $200 million would be provided initially, with the possibility of hundreds of millions more as the project develops.

"We want to see the Diamer Basha project launched. We believe that putting down some money at the beginning will act as a catalyst, accelerate the process," the official said.

U.S. aid to Pakistan, ramped up to $1.5 billion a year under the Obama administration, has been widely dismissed in the country as going mostly to consultants and lacking direction. It remains unclear how much of the money has arrived in Pakistan since the new aid program began in 2009.

The U.S. official said Washington had spent $2 billion on civilian assistance in Pakistan since October 2009, including $550 million on flood relief last year, but Pakistani officials and analysts say the amount is much less.

"The vast majority of the U.S. aid has gone to the Pakistan military, not schools or social services," said Mosharraf Zaidi, an analyst. "Diamer Basha would be tremendously good for Pakistan and would show that the U.S. is invested in a long-term relationship with Pakistan, no matter how bad things look today."

Since 2001, Washington has provided $20.7 billion to Pakistan, according to a recent report from the Congressional Research Service. Of that, $6.5 billion was economic aid, including budget support, an assistance program for the extremism-plagued tribal area and help for internally displaced people. However, it's included no landmark infrastructure projects.

"U.S. aid is neither visible nor tangible, as far as the people of Pakistan are concerned, unlike, say, aid from China or Saudi Arabia," said Tariq Fatemi, a former Pakistani ambassador to Washington. "Most Pakistanis want the U.S. to focus on sectors that really matter, namely energy and power."

In contrast, Chinese economic aid in recent years has included nuclear power plants and the construction of a large deepwater port at Gwadar in the country's southwest. The Saudis are constantly pumping money into mosques and religious seminaries in Pakistan and they periodically provide cut-price oil.

The Indian Embassy in Islamabad declined to comment directly but it pointed to a statement that the government of India issued in 2006, after the Diamer Basha project was first proposed. That statement said India had officially protested to Pakistan, as the dam would be "in territory that is part of the State of Jammu & Kashmir, which is an integral part of India by virtue of its accession to it in 1947."

(Shah is a McClatchy special correspondent.)

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