US pledges $200m for initial work on Diamer-Bhasha Dam
07 December, 2012
WASHINGTON: The United States has pledged to finance Pakistan's multi-billion Diamer Bhasha Dam project, Finance Minister Abdul Hafeez Shaikh said on Wednesday evening at the conclusion of a series of meetings with American officials on advancing bilateral economic cooperation.
Dr Shaikh said the US would provide $200 million for completion of preliminary work on the multi-year power generation and water conservation project, which is likely to cost in excess of $10 billion. He dismissed the impression that the Asian Development Bank had backed out of its commitment to finance the mega project. The ADB and the United States would finance feasibility study, surveys and consortium formation for the dam, to be built in Gilgit-Baltistan in an estimated 8-10 years, he told Washington-based Pakistani journalists.
Pakistan, the finance minister said, would complete land survey, feasibility and land acquisition processes to pave the way for construction of the dam.
"This is a very good development," Shaikh said of the US commitment to the project, as he sat next to Pakistan's ambassador to the United States Sherry Rehman.
Washington's financing of the project would be in addition to the ongoing support it is providing to revamp existing dams' power generation capacity.
Besides, the US has promised to release $400 million to $600 million in outstanding Coalition Support Fund payments in the next few weeks.
The finance minister also revealed that Pakistan and the United States would launch Pakistan Private Investment Initiative with an amount of $ 80 million within a couple of months.
"This will help spur economic activity, generate jobs and contribute to improvement in bilateral ties," Dr Shaikh said.
Islamabad and Washington have also agreed to set up a joint task force to identify products and ways Pakistan may bolster its exports to the US market.
In another sign of expanding cooperation between the two countries, the USAID Administrator would be visiting Pakistan to review progress on the ongoing energy and infrastructure development projects.
"We were able to make a lot of headway," Dr Shaikh said. He praised Ambassador Sherry Rehman's tremendous diplomatic outreach towards creating goodwill for Pakistan in Washington, saying the ambassador's efforts greatly helped in making Pakistan-US talks on economic cooperation successful.
The finance minister voiced his firm confidence in Pakistan's economic growth trajectory and said the economy was poised to grow more than 4 per cent of GDP during the current financial year.
Recounting a series of positive macro-economic indicators, he said, the government's reforms had resulted in boosting growth from under two per cent of GDP to 3.7 percent last year, raising the volume of exports to unprecedented $25.5 billion in the last fiscal year, recording a 21 percent increase in tax revenue collection, curbing inflation from a high of 25 a few years ago to single digit, improving agrarian output and seeing a significant increase in inflow of foreign remittances.
At the same time, the finance minister recognized challenges the country has to deal with in bolstering investment levels in the face of security situation along the Afghan border and international perceptions.
Pakistan, he said, offers a liberal investment regime with no bar on profit transfers and equity.
During the visit, the finance minister co-chaired the Finance and Economic Dialogue with US Deputy Secretary of State Thomas Nides, held talks with US Deputy Treasury Secretary Neal Wolin, Special Representative Marc Grossman as well as World Bank and IMF officials.