Prime Minister Yousuf Raza Gilani has, reportedly, directed the Planning Commission to prioritise those power development projects to be included in the Public Sector Development Programme (PSDP) which have components of both water storage and electricity generation.
There is a nation-wide consensus that initiating projects designed to enhance the water storage capacity as well as supply of electricity must be a priority of the new government, given the scale of water and power shortage facing the country today. Thus the Prime Minister's directive is a response to public demand.
That for the past eight years, the government did not address the issues related to rising water and energy scarcity has become patently evident. What is also well-known is that the government was fully aware of the impending crisis as early as in 2000 when President Musharraf stated that "by the year 2014 or 2015 the (water) shortage will go up to 10 million acre feet (MAF)". By end 2005 the President, at a press conference, stated that unless large water reservoirs were built the shortage would be as much as 20 to 25 million acre feet by the year 2020.
At the same time the President was fully cognisant of the looming power crisis that has been recently exacerbated by the unprecedented rise in the international price of oil. This awareness is reflected in the government's decision, announced by President Musharraf on 17th January 2006, to construct 5 multi-purpose dams in the country during the next 10 to 12 years.
Diamer Bhasha Dam Project, requiring a detailed feasibility study, was to be undertaken in the first phase and was to have a reservoir capacity of about 7.4 MAF, with live storage of more than 6.4 MAF and an installed capacity of 4500 MW. The remaining four dams identified by the President were Munda, Kalabagh (which remains highly controversial), Akori and Kurrum Tangi dams with the twin objective of dealing with the growing shortage of water and power in the country.
Too little too late is what several members of the newly elected government have alleged with respect to attempts by the former government to meet the looming water and energy crisis. The People's Party stalwarts have declared that the Independent Power Producers (IPPs) were the last serious attempt by an incumbent government to invest in the power sector, and see this as a vindication of their energy policy of yesteryears - a policy that had come under considerable criticism at the time with respect to the agreement on the unit pricing of energy. It is also relevant to note that recently party stalwarts, including the PPP Co-Chairman Asif Ali Zardari, have mentioned their support for more projects in the private sector though their proposed investment in water reservoirs has not yet made any headlines.
The question facing the new government is, therefore, quite simple: will it go the same route as that proposed by President Musharraf and launch the construction of extremely expensive dams with long gestation periods or focus on IPPs? The answer must be: a bit of both. The short and medium term energy needs can be met only through the IPPs while the long-term needs maybe provided by initiating the construction of dams.
Within the context of water and energy shortages it is also extremely relevant to ensure that the Indus Water Treaty between Pakistan and India, brokered by the World Bank, remains in place. The decision by the Government of India to build the Kishan-Ganga Dam and the Government of Pakistan's legitimate concerns that it violates the Indus Water Treaty needs to be dealt with appropriately. Pakistan's government must launch an intense diplomatic effort to convince the Indian government that its construction may derail the process of peace talks between the two countries - a derailment that would have a negative impact on regional security.
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