Big Dams, Development Aid and World Bank

Mushtaq Ahmed Gaadi1 The World Bank supported Pakistan Water Assistance Strategy contends that the country has to invest, and invest soon, in big dams. It emphatically argues that the construction of new water storage reservoirs is of an overwhelming importance to Pakistan and that the delay would make things more difficult.2 Big dams are however controversial across the world. They are undoubtedly the source of high profit for an all powerful global dam industry. But they are now being increasingly considered catastrophic because of their inescapable ecological, social and economic costs. Not only have big dams involuntarily displaced millions of local persons from their ancestral places but they alter a rivers natural flow pattern and thus disrupt many of critical eco-system sustaining processes. In recent years, a number of ecologists and economists have attempted to describe and value the functions that natural river ecosystems perform in conventional economic terms. The idea behind the monetary valuation of ecosystem services is to take into account the wealth of nature in economic decision-making. For example, University of Vermont researcher Robert Costanza and a team of ecologists and economists have recently assessed that rivers, lakes, and wetlands producing ecological services collectively valued at nearly $6.6 trillion per year.3 Similarly, researchers Edward Barbier and Jullian Thompson evaluated the economic benefits of direct uses of the floodplainsespecially for agriculture, fuelwood and fishing- and compared these with the economic benefits of the irrigation projects. They found the benefits of the floodplains to range
1

Mushtaq Ahmed Gaadi works as the lecturer in the National Institute of Pakistan Studies, Qaudi-e-Azam University, Pakistan. 2 World Bank, Pakistan Water Economy: Running Dry (Washington D.C. 2005): p. 60 3 Robert Costanza et al, The Value of the Worlds Eco Services and Natural Capital, Nature, 387, (May 1997): pp. 254-260

from approximately $9,600 to $14,500 per cubic meter compared with $26 to $40 per cubic meter for the irrigation project.4 An estimated 800,000 dams of all sizes now block the flow of worlds river. For example, five of the largest rivers in Asia-the Ganges, the Indus, the Yellow, the Amu Darya and the Syr Darya- no longer reach the seas for large portions of the year.5 Approximately, one-fourth of the global flux of sediment carried by flowing water now gets trapped in reservoirs rather than nourishing floodplains, deltas and estuaries.6 Furthermore, the evidence is steadily mounting to show how dams have not fulfilled the promises made for them. Dams invariably cost much more than claimed, diverting investment from more beneficial uses. Owing to high investment costs and undelivered promises, the business of building big dams appears to be declined. Almost all the remaining free flowing rivers in Sweden and Norway are now legally protected against dam building. Likewise, the current rate at which dam are being built in the US is the lowest and the government declared thousands kilometers of outstanding sections of rivers and streams legally preserved.7 How should then we explain the strong advocacy of the World Bank for the construction of new big dams in Pakistan? The following sections of this paper will answer this question in the light of the imperatives of development aid as well as the reliance of the World Bank on large infrastructure projects for its institutional survival and growth. The central argument of this paper is that it is the Banks own aid economy in Pakistan which is dehydrated without big dams. According to the latest statistics, the Banks financing to water sector in Pakistan has gone down to a low of $ 20 million a year in the most recent period (2001-2004). The
4

Edward B. Barbier and Julian R. Thompson, The Value of Water: Floodplains Versus Large Scale Irrigation Benefits in Northern Nigeria, Ambio, 27 (1998): pp. 434-440 5 Sandra Postel, Rivers for Life: Managing Water for People and Nature (Washington D.C. Island Press, 2003): P. 2 6 Ibid: p. 17 7 Patrick McCully, Silenced Rivers: The Ecology and Politics of Large Dam (New Jursy, Zed Books: 1998): p. 26

new water strategy would be instrumental in expanding the Banks water portfolio in Pakistan. It envisages about ten fold increase in water investment, accounting for over $ 1 billion in the coming four years8. Moreover, the Banks investment in water sector will observe phenomenal surge if the Bank decides to finance some of the most disputed big dams in Pakistan. For example, according to some of the latest estimates, the Kalabagh Dam alone would cost the country in the vicinity of $ 17.07 billion.9 As an international lending institution, the success of the World Bank critically depends on its ability to move large amount of aid money out the door. The Banks eagerness to lend as much money as possible can be gauged by the fact that the Bank received more than 6000 loan applications from around the world during the period between 1947 and 1994. It didnt turn down a single request. In fact, the Bank has no choice except to keep money flowing to its Third World debtors at higher volumes than the required debt servicing, thereby providing debtors with more loans to repay old World Bank debts.10 Financing infrastructure projects especially big dams is the most convenient and swift way to keep running its debt economy as well as extracting large amount of profit. Big dams: aid to destruction
Dams are concrete, rock and earth expression of the dominant ideology of technological age: icons of economic development and scientific progress to match nuclear bombs and motor cars. Patrick McCully, Silenced Rivers

Big dams are built on the assumption that they augment water. Nonetheless, this is not true. In reality, they take water from one community to another and from one ecosystem to another. The expansion of irrigated agriculture in the American west has come at the cost of agriculture in the eastern and southern parts of the country.11 The same process
8 9

World Bank, Pakistan Water Economy: Running Dry: p. 93 Rashid Channa, Costs of Building Reservoir, Daily Dawn, February 12, 2007 10 Patricia Adams, A Financial House of Cards, the paper is available at http://multinationalmonitor.org/hyper/issues/1994/08/mm0894_10.html 11 Vandana Shiva, Water Wars (South End Press, 2002): p.55

happened in the Indus Basin when the British colonial government constructed a large irrigation system in Punjab at the expense of the Indus delta and large tracts of riverine belt. The major function of big dams is to help in storing and redirecting water to create commercial agriculture, feed industry and big towns. They are thus built structures to facilitate the expropriation of rivers from one set of users to another. However, social and environmental costs of such change is never recognized and taken into account. The World Bank is the greatest single source of funds for big dam construction. Since its founding, the Bank has supported more than 550 dams around the globe, with over US $ 90 billion (in 2007 dollars) in loans and guarantees. The World Banks lending to big dams happened to peak in the late 1970s and early 1980s at a level of more than $2 billion a year (1993 dollars). 12 The enormous aid poured by the World Bank into the business of big dams led to the unprecedented devastation of local livelihoods and ecological disasters. The Bank funded big dams turned millions of men, women and children into refugees into their own lands. Indigenous people and women have suffered disproportionately while often being excluded from the so called benefits of big dams.13 There exists no credible data on what happened with such a large number of project oustees before and after their involuntary displacement. In addition, the people living downstream of big dams are often compelled to abandon their homes and lands because of adverse changes in hydrology, lack of floodwater and loss of fisheries. In most of the cases, they simply dont exist in official statistics. The World Banks funded big dams wrecked havoc on riverine ecology and environment. They caused the submergence of tens of thousands of square kilometers

12 13

Arundhati Roy, The Cost of Living (New York, Modern Liberary, 1999): pp. 48-50 International River Network (IRN), The World Bank Big Dams Legacy (Berkley, 2007): p. 3

of forests, the decimation of countless fisheries, the opening of remote areas for resource extraction, and the loss of floodplain, wetland and estuarine habitat.

Number of dams funded: at least 552

Amount of money invested in those dams: more than $90 billion (in 2007 dollars) Number of people evicted by Bank dam projects: at least 10 million Number of World Bank-funded dams that improved income of oustees according to 1994 Bank wide Resettlement Review: 1 Average percent increase in number of people to be displaced at completion, compared to estimates to estimates at time of appraisal: 47 Percentage of IDA (International Development Association) projects that failed to meet their development objectives in the period 1994-2000: 65 Average construction cost overrun on World Bank-funded dams: 30% Number of internal reviews conducted by World Bank to analyze actual performance of its large dams: 0
Source: IRN, Un-happy Birth Day: Sixty Years of Achievements

The World Commissions on Dams (WCD) found that the estimated 60 percent of the Worlds large rivers are fragmented by dams and diversions.14 About 20 percent of the earths land which is irrigated by big dams is almost permanently lost to salinization and water logging and the 5 percent of the worlds fresh water evaporates from storage reservoir.

14

The World Commission on Dams was established by the World Bank and IUCN-the World Conservation Union in May 1998 in response to the growing opposition to big dams. It was mandated to review the development effectiveness of the big dams; assess alternatives for water resources and energy development; and develop internationally acceptable criteria, guidelines and standards for the planning, design, appraisal, construction, operation, monitoring and decommissioning of big dams.

The WCD found that the economic performance of big dams had not proved satisfactory and they were at best only marginally economically viable. The average cost overrun of dams is 56 percent. This means that when a dam is predicted to cost $1 billion, it ends up costing $1.56 billion.15 Half of the dams surveyed had a construction delay of one year or more. If these factors had been taken into account at the time of decisionmaking, many alternatives would have been economically more viable. Big dams play instrumental role in redistributing development benefits and costs. According to the WCD, the benefits of big dams have largely gone to the rich while the poor bear the costs. Moreover, these costs were mostly neither compensated nor accounted for. Dam fighting: the challenge from ragged army
No one has ever managed to make the World Bank step back from a project before. Least of all a rag-tag army of the poorest people in one of the worlds poorest countriesSacking the Bank was and is a huge moral victory for the people in the Narmada valley.

Arundhati Roy, Greater Common Good Since the 1970s, the people violated and wronged by big dams waged numerous fights against the World Bank supported projects. However, the biggest challenge to the Bank came from the people affected by the Sardar Sarovar Projects (SSP) in India. The Banks approval and financial support to SSP in 1985 outraged the inhabitants of Narmada valley and their allied Indian activists. What did fuel the protest was the fact that the World Bank approved the project that was not even yet clarified from the Ministry of Environment and Forestry.16 On 25th December in 1990, some 6000 men and women started their long march against the project. They walked over about 100 kilometers when the police and some
15 16

IRN, Citizens Guide to the World Commission on Dams (Berkley, CA, 2002): p. 12 It was envisioned to building 30 large dams, 135 medium-size dams and 3,000 smaller dams on the Narmada River. Officials estimate that the Sardar Sarovar Dam will submerge approximately 37,000 hectares of land and 245 villages in three states in India.

of privately hired people stopped them on the Gujarat border. The state police refused to give them way and started arresting and beating them. The confrontation between the police and protesters continued for almost two weeks. The event got unprecedented press and media coverage not only in India but throughout the world. Very soon, also, the campaign against the Banks decision to support SSP gathered momentum in Europe, Japan, and North America, wherein social and environmentalist activists raised concerns about the project with their governments and with the World Bank. In late December 1990, seven persons began a hunger strike, demanding that the project be comprehensively reviewed Twenty-six days later, the fast was called off when it was announced that there would be a review of the project as well as a commitment from the Bank to conduct its own independent study. In 1991, the Bank established an independent commission headed by Bradford Morse, a former U.S. congressman and head of UNDP, to investigate the Sardar Sarovar Project. In June 1992, the Morse Commission issued its report. The Morse Commissions independent review landed like a bomb on the Bank. We have discovered fundamental failures in the implementation of the Sardar Sarovar Projects, the review found. We think the Sardar Sarovar Projects are flawed, that resettlement and rehabilitation is not possible under prevailing circumstances, and that the environmental impacts of the Projects have not been properly considered or adequately addressed.17 In March 1993, the Bank was forced, first time in its history, to withdraw from the Sardar Sarovar Projects. Moreover, the experience compelled the Bank to become cautious and avoid funding the most controversial big dams. Six months after the release of the Morse Commissions review, the Bank came under further pressure when a scathing in-house review of its investment portfolio explained

17

Bradford Morse and T. R. Berger, Sardar Sarovar: The Report of the Independent Review, (Washington D.C. 1992): p.vii 7

why it contravened its own policies in projects like Sardar Sarovar. The review conducted by a task force headed by the outgoing Vice President Willi Wapenhans. The report of that review ranked 37.5 percent of Banks total projects as unsatisfactory and reported wide spread violations of loan agreements. According to the Wapenhans report, [t]he Task Force found that the credibility of the Banks appraisal process is under pressure. Most of Bank staff perceives appraisals as marketing device for securing loans approval (and achieving personal recognition). Funding agencies perceive an approval culture in which appraisal becomes advocacy.18 An annex to the Wapenhans report includes a summary of confidential interviews with borrowinggovernment officials, in which they reflect on some of the root causes of poor portfolio performance. The interviews showed that borrowing-country counterparts felt that the Bank seems more concerned with getting Board approval.19 Moreover, the interviews revealed the unequal bargaining power and the differential technical capacity between the Bank and borrowers. This is reflected, for example, in comments that the Bank has far better lawyers and financiers; and that [d]uring negotiations, the Bank overpowers borrowers.20 The World Banks response to the Morse and the Wapenhans reports was two fold. First, the Bank established the semi independent Inspection Panel in the late 1993. It was claimed to function as a means of increasing compliance and internal accountability. Secondly, the Bank began to shy away from controversial dam projects Not only the World Bank pulled out of Sardar Sarovar but it stopped lending for new thermal and hydropower projects in India altogether. Similarly, the Bank cancelled a billion dollar controversial Arun III Hydropower Project in Nepal when local activists challenged the project economic appraisal and filed the first ever inspection claim to the newly formed World Bank Inspection Panel.

18 19

Ibid: p. 25 World Bank, Report of the Portfolio Management Task Force ( Washington, D.C. 1992): p. 26
20

Ibid: p. 36

Big is back at the World Bank

The Bank has become so risk averse, according to some borrowers, that it would rather do no project than risk criticism

World Bank, Costs of Doing Business As a consequence of the disastrous experience with the Sardar Sarovar Projects in India, the World Bank became very much cautious and greatly reduced its funding for big dams in the 1990s. From 1993-2002, both irrigation and hydropower accounted for 8 percent of all World Bank lending.21 However, in the recent years, the Bank has announced a return to funding big infrastructure projects- it is so called high risk, high reward plan. In July 2001, the World Bank established a Task Force to look into the cost of the Banks safeguard, procurement and financial policies. The report was entitled The Cost of Doing Business. According to the report, [t]he task force does see some risks that the Bank faces in the withdrawing-or being de-facto excluded-from infrastructure sub sectors such as energy, transport, and urban.22 The report of the Task Force was and is being used by the Bank to relax its social and environmental safeguard policies. In the early 2003, the World Bank prepared its new Water Sector Strategy (WSS), which literally declared the return to big dams. Besides the privatization of urban water supply, it pledges to boost Bank funding for big dams and inter-basin transfers, which it terms high-risk/high reward water infrastructure. However, the term risk is here only referred to the risk to the Banks reputation of being the funder of costly and contentious projects, rather than the risk to the security of local livelihoods and environment.

21 22

World Bank, Water Resources Sector Strategy, (Washington, D.C. 2003): p.33 World Bank, Cost of Doing Business: Fiduciary and Safeguard Policies and Compliance (Washington D.C. 2001): pp.vii,7

The WSS estimated that investment in water infrastructure in developing countries needed to increase from the current level of about $ 75 billion to $ 180 billion a year.23 Surely, this estimate is exaggerated and predicated on the need for big dams and other capital- intensive infrastructure. Shortly after the WSS, the World Banks Board of Directors adopted a new Infrastructure Plan in July 2003. Its most important elements include: an increase in the budget for the development of infrastructure projects; the simplification of internal procedures, including the application of safeguard policies; the preparation of new lending instruments (including subsidies for private provision, for example through IDA credits); and the implementation of high-risk/high reward strategy.

What followed this emergent emphasis on capital-intensive and controversial infrastructure investment was the gradual weakening of safeguard policies within the World Bank. Most of the safeguard policies were set in place in the late 1980s and the early 1990s, when the World Bank came under severe criticism and encountered popular resistance owing to its funding to big dams and other destructive infrastructure projects. These safeguard policies on resettlement, environment impact assessment, indigenous peoples and other areas were meant to minimize and/or mitigate adverse impacts as well as integrate social and environmental considerations into economic decision-making. However, along with the recent shift to large infrastructure projects, the safeguard policies came under pressure for supposedly being too cumbersome, and for making Bank projects too expensive. As a result, the Bank started to pursue country system

23

World Bank, Water Resources Sector Strategy: pp.10, 37

10

approach which would rely solely on a borrower governments social and environmental systems, rather than the Banks own safeguard policies for project designing and implementation. While the country system approach has been started on pilot basis, there is however the strong possibility of extending it to all of its borrowing countries. This is clearly a clever initiative to avoid accountability claims and transferring responsibility to the borrowing governments, which are mostly autocratic and have little hesitation to employ brutal force against public dissent. Development induced disasters: a chronicle of watery aid in Pakistan For last four decades, Pakistan contracted about $ 20 billion (US $ 2004-2005) from the World Bank for water sector related loans. The Banks lending to water sector projects in Pakistan peaked in the late 1960s and the mid 1970s, at the level of about $700 million a year (US $ 2004-2005)24. It was the water dispute between India and Pakistan which accorded the initial opportunity to the World Bank to influence critical decisions concerning with the planning and development of water sector in Pakistan. The World Bank is usually lauded due to its successful water diplomacy in the settlement of Indus Basin dispute between India and Pakistan. Indeed, the Bank presents its mediation role as the most winning model for emerging trans-boundary water conflicts throughout the world. Despite the fact that the effects of the Indus Waters Treaty have never been thoroughly assessed but some of them are evident on the ground and need brief description. Mr. David Lilienthal, the US intermediary and former Chairman of Tennessee Valley Authority, toured both India and Pakistan in February 1951. Lilienthal returned from the Indian Subcontinent with the proposal the US should first tackle water dispute between two countries. Only then, Lilienthal argued, would relations between two countries be calm enough for discussion on Kashmir. Lilienthal urged that that tortured question of water rights be removed from the politicians negotiating tables and handed over to the engineers of the two countries to work over, with the technical and presumably financial help of the

24

World Bank, Pakistans Water Economy: Running Dry: pp. 96-98

11

World Bank. Lilienthal saw three principles as essential to the dispute resolutions. Firstly, recognition by the disputants that there was enough water in the Indus Basin for both and India and Pakistans existing and future uses. Secondly, the water in the River Sutlej, the main point of dispute, would be inadequate for resolution and, therefore, the water in all six rivers of the Basin should be considered. Thirdly, the matter should be approached from a functional perspective. Lilienthal also envisaged the involvement of a third party, such as the World Bank, in bringing the disputants to the negotiation tables. The World Bank was equally enthusiastic to enter into the negotiation because the dispute seriously jeopardized the prospect for its water investment in the region. However, the manner in which the Treaty was negotiated and concluded, lends and impression of external pressure group network exerting their influence since huge investments were involved in the construction of big dams and canals. It is a reflection on the functioning of the World Bank which was influenced by the Cold War politics in the region and by the interested construction lobbies.

First, the re-emergence of serious disputes over Chenab and Jhelum River negates the claim that the Indus Waters Treaty has perennially solved the conflict between the two countries. For the past several years serious doubts has risen as to whether the treaty will last or not? For example, from December 2001 to June 2002, India was vocally considering pulling out of the treaty as one of the steps of hitting back at Pakistan for its alleged support of terrorist outfits targeting India25, and, in turn, Pakistan stated that it would be prepared to use nuclear weapons over a water crisis.26 A 2005 report by the Strategic Foresight Group found that the treaty only offers a frail defense against heightened conflict over river resources between Pakistan and India, and that it is only a matter of time before water war becomes a virtually unavoidable feature of the regions political environment. Even if this prediction of water war does not prove true, political conflicts over river resources are likely to become the permanent characteristic of future inter-state territorial conflict between India and Pakistan. For example, every proposal
25 26

Fred Pearce, Water Wars, in New Scientists, vol. 174, Issue 2343, (May, 2002): p. 18 Blankenship Erin, Kashmir Waters: Good Enough for Peace, on line. Accessed at http://www.pugwash.org/reports/rc/sa/kasmiri-water.htm

12

made by Pakistan through rack-two diplomatic channels since 1999 has referred to water as a pivotal concern27. In addition, the nationalist groups in the Indian State of Jammu and Kashmir consider Kashmiri people as the hardest hit victims of the Indus Basin WatersTreaty. They demand that the Himalayan state should be given full usage rights over the western rivers for hydro-electric generation, irrigation, navigation and other purposes. According to them, the Indian State of Jammu and Kashmir, in spite of being the upstream region, has suffered due to restrictions placed by the Indus Waters Treaty on the unhindered usage of its river. The treaty has added to the economic woes of the people of upstream Jammu and Kashmir State by depriving them of the legitimate right to full usage of Jhelum, Chenab and Indus waters.28 For example, Kashmir has been able to harness only about 10 percent of its enormous hydroelectricity potential estimated at around 15,000 MW.29 Kashmiri nationalist groups complain that while India and Pakistan battle over the legalities of the technical engineering and the treaty details for each proposed dam, spillway, and plants, Kashmir waits. Secondly, the Indus Waters Treaty has been the major source of conflict in both countries rivaling internal provinces and regions. India faces the crisis from Punjab, Haryana and Rajasthan, while Pakistan faces not dissimilar situation. The aggrieved provinces and regions in Pakistan complain that their representatives were not involved in those negotiations. The Pakistan delegation involved in the negotiations was although initially comprised of the representatives of federal government and five Chief Engineers, from Punjab, NWFP, Sind, Baluchistan and Bahawalpur State, but they were later on excluded from the negotiation process.30 Thirdly, the approach to solve the political dispute through adopting massive river engineering and development measures resulted into large scale environmental and
27 28

Ibid Prof. K. Warikoo, Indus Waters Treaty: The View from Kashmir, available at http://www.jammu-kashmir.com/insights/insight20060601a.html 29 Ibid 30 Undala Z. Alam, Questioning the water war rationale: a case study of the Indus Waters Treaty, in Geographical Journal, Vol 168, Issue 4 (November 2003): pp. 344-47

13

social disintegration. The Indus Water Treaty followed the execution of the Indus Basin Project- the largest single irrigation project in the history. The Indus Basin Project (IBP) included the construction of three storage reservoirs, six barrages including a siphon and 400 miles of new link canals with a total discharge of 150,000 cusecs, or about twothird of the entire pre-exiting system in then West Pakistan.31 Not only this enormous infrastructure building has led to the disintegration of the Indus River Basin but also exacerbated the already serious problem of water logging and salinization. Moreover, the expansion of water infrastructure to such a large scale now requires the allocation of far more funds for repair and replacement. From 1960 to 1970, after the signing of the Indus Waters Treaty, the World Bank lent more than $ 10 billion (US $ 2004-2005) for the river transfer and replacement works including the construction of Mangla Dam.32 The funding to the construction of Tarbela Dam was also approved in the same period. Tarbela Dam is perhaps the worlds most problem-stricken major dam in technical terms. The crisis of Tarbela Dam started with the first reservoir impoundment during the 1974 flood season. When the reservoir was almost filled to its full capacity, one of the tunnels collapsed, bringing down nearly half cubic meters of the dam structure and nearby bedrock with it. The immense threat of complete dam collapse was averted through a series of emergency repairs. However, the emergency measures didnt solve the problem permanently and the severe threat to the dam safety continued to haunt the planners and operational engineering staff. The following year, the blanket of silt and gravel laid on the reservoir bed near the dam to prevent seepage under the embankment had cracked and subsided at round around 70 sinkholes up to 1 meter deep and 5 meters across. The appearance of hundreds of sinkholes in the blanket in the next year further worsened the situation. These sinkholes were covered by dumping thousands of barge-bolds of earth into reservoir.33 A series of repair programs spanned
31

Michel Aloys Aruther, The Indus Rivers: A Study of the Effects of Partition (London: Tale University Press): pp. 355-360
32

World Bank, Pakistans Water Economy: Running Dry: pp. 94-97 Patrick MacCully, Silenced Rivers: p.123

33

14

over many years delayed the project completion and almost doubled the cost of Tarbela Dam Project. According to a report of the World Commission on Dams (WCD), the technical problems resulted in cost overruns of 50-81 percent.34 The trend of high investment into water sector, which was set in the early 1960s, continued in the next two decade. During this period, the Banks water related investment exceeded $ 6 billion. Besides the completion of Tarbela Dam, this period also witnessed the augmentation of massive and costly interventions to address mounting water logging and salinity problems through a Salinity Control and Reclamation Program (SCARP). The construction of massive river diversion infrastructure first in the colonial era and then under the IBP adversely impacted the hydrological balance and caused the desertification of vast tracts of land in the form of water logging and salinity. The river diversion capacity in Pakistan expanded from 67 Million Acre Feet (MAF) at the partition to an annual average of nearly 104 MAF today.35 The average depth to water table in the Indus Basin in 1901 was about 36 meters. By 1961, the depth of water table in 40 percent area of the Indus Basin was less than four meters. In twenty years, this area expanded to cover 45 percent of the Basin.36 At the same time, salinity and sodicity damaged significant area of fertile irrigated land. For example, 25 percent of cultivable land in Sind and 13 percent in Punjab are affected by salinity. Water logging occurs due to hydrological imbalances. Every part of land has, over centuries, developed a natural equilibrium between the water inflows- in the form of rain, underground inflows, etc. - and the outflows in form of surface and subsurface flows and drainage, evaporation and so on. Massive nonnatural inflows of external water from canal irrigation without equivalent outflows disturbs this equilibrium and results in rising water tables as the excess water percolates into the ground and accumulates. When the raising groundwater reaches the crop root zone, it starts to impact crop productivity,
34

World Commission on Dams, Tarbela Dam and Related Aspects of the Indus River Basin, Pakistan, WCD Case Study, p. viii, on line. Accessed at http://www.dams.org/kbase/studies/pk/ 35 Ibid, p. 8 36 Perera Jayantha, Irrigation Development and Agrarian Change: A Study in Sind, Pakistan, (New Delhi, Rawat Publications, 2003): p109

15

ultimately rendering the land into a wet desert. Water logging diminishes the capacity of the ground to absorb monsoon waters leading to flooding and surface ponding. The disruption of natural drainage patterns due to the construction of canals, roads, railways, blockage of drains, etc. further exacerbates the problem. Salinization is also closely linked with both surface and subsurface hydrological processes. The rising groundwater dissolves and brings the salts to the surface where they are deposited as the water evaporates. Similarly, irrigation from canals or groundwater causes salinization after evaporation.

SCARP attempted to lower the rising groundwater levels through deep-bored tubewells. The main strategy was obtaining drainage as a byproduct of tubewell irrigation in fresh ground water (FGW) areas in Punjab and Sind. However, SCARPs approach was severely criticized by some senior irrigation experts mainly because of the selection of inappropriate and costly technology.37 SCARP proved an utter failure mainly due to two main reasons. First, tubewell life was considerably less than planned. The actual life of SCARPs tubewells lasted for 10-15 years instead of assumed 30-40 years.38 Secondly, they were proved to be too expensive to be sustainable even over the short term. Not only the imported turbine tubewells were much costly as compared to locally manufactured units but their energy needs were also high. They were bored deeper (150-300 feet) where salinity is concentrated in the aquifer. Due to deep locally manufactured units but their energy needs were also high. They were bored deeper (150-300 feet) where salinity is concentrated in the aquifer. Due to deep tboring and large discharges, they needed to be connected to the National Grid. Moreover, the imported tubewell machinery was too delicate to be properly operated and maintained by local irrigation staff. Resultantly, SCARPs burdened the provincial irrigation departments with ever-increasing operation and maintenance (O&M) costs. By the late 1980s, the costs to run the SCARPs had

37

Khalid Ahmed, We were Swept Away in A Flood of Foreign Expertise, in Kaiser Benglai, ed., The Politics of Managing Water, (Karachi: Oxford University Press, 2003): p. 86-87 38 World Bank, Pakistans Water Economy: Running Dry: p.96

16

sky rocketed. For example, Punjab was spending over 55 percent of its total operation and maintenance (O&M) budget for irrigation on SCARPs alone by 1992.39 The debacle of SCARP tubewells led the Bank to do yet another failed but costly experiment in the field of irrigation and drainage. In the early 1990s, the Bank concluded that the lack of effective surface drainage for the whole Indus Basin Irrigation System (IBIS) was the principal threat to the countrys irrigated agriculture which required an urgent solution. Therefore, in 1992, the Bank stopped all new lending to the water sector in Pakistan pending the formulation and agreement with the government on a new irrigation and drainage strategy. Between 1992 and 1994, the Bank closed its eight projects in order to restructure them according to the objectives and principles of new strategy. Meanwhile, the Bank completed the report entitled Pakistan Irrigation and Drainage: Issues and Options. The report emphasized that the government should not treat irrigation water as public good and private markets must be allowed to trade water. It claimed that any service that is not a public good should be commercialized and later privatized. However, the report recognized the off-farm drainage as a public good and suggested massive investments into the construction of surface drainage facilities at the Indus basin level. The revised strategy resulted into the formulation of National Drainage Program (NDP) Framework to be implemented in the next 25 years (1995-2020). As the first step of its implementation, a six and one half year NDP Project was designed and approved in December 1997, with estimated total cost of $ 785 million. It was comprised of three components, namely: (i) sector planning and research component; (ii) the institutional reforms component aimed at handing over management responsibilities as well as

39

World Bank, Pakistan Irrigation and Drainage: Issues and Operations, (Washington D.C, 1994): pp. 13-15

17

shifting operation and management costs to irrigation users at canal level; and (iii) the investment component to improve the drainage and water infrastructure in the irrigated areas and protect inland wetlands. The NDP Project as designed during appraisal was quite different from the Project that closed in December 2004. The Project went through significant restructuring during Mid-Term Review. Owing to political opposition and lack of investment, more than $100 million were transferred from its investment component to drought problems. The failure was so vivid that both the World Bank and Asian Development Bank termed the Project unsatisfactory in their Final Completion Report.40 One of the major outcomes of the Project was the preparation of Drainage Master Program (DMP). Despite the fact that the DMP was supposed to be national in its scope, the Panel of International Experts recommended to opt for local and regional drainage options. Nothing illustrates so well the faulty (read reductionist) drainage approach than the World Bank funded Left Bank Outfall Drainage Project (LBOD) in Sind Province. It was the British consulting firm Hunting Technical Services which first time proposed in 1966 the construction of a major drain east of the Indus River to divert saline drainage and flood flows directly into the Arabian Sea. This was considered necessary because diverting drainage water back into the Indus River was almost impossible due to the elevated river bed in much of its southern length. The building of LBOD system started in December 1984, when the World Bank approved a Credit of $ 150 million. The LBOD is a gigantic system comprised of many components including the construction of a 300 km outfall drain; installation of surface and subsurface drainage network; and sinking thousands of tubewells and drain pumps.
40

Asian Development Bank, National Drainage Programme Completion Report (Manila, 2006): pp. 24-28

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Introduction of on-farm water management practices, renovation of about 920 watercourses, precision land leveling, remodeling of Nara and Jamrao Canals as well as construction of Chotiari Reservoir are also included in the LBOD system. However, the central feature of the LBOD system is the Spinal Drain, which collects and transport drainage effluent from three districts in the Southern Sindh, through branch drains and the Tidal Link to the Arabian Sea. The LBOD system was completed in 1995. Merely after four years, it was collapsed in May 1999 when a tropical cyclone hit the tidal areas of Thatta and Badin district. Seawater topped and destroyed the Tidal Link and about 54 breaches in the embankments occurred at different locations, bringing unprecedented devastation and loss of life in the adjacent communities. The failure occurred primarily because of wrong design assumptions and faulty structures. As the recent report prepared by the World Banks Inspection Panel confirms, the design of the LBOD and Tidal Link was not in harmony with the prevailing winds and natural flow of water.41 Most importantly, the design consultants did not evaluate the likelihood that, under prevailing meteorological conditions, high surface water run-off from upstream areas would coincide with high water levels in the Arabian Sea. The Panel found that the LBOD system, combined with the destruction of the Tidal Link, has heightened the risks to local people from flooding. The situation is particularly alarming when heavy rainfall in land and high tide and storm at seas coincide. Moreover, the failure of Tidal Link has increased the salinity and led to major harm to local lakes. The instances of World Banks failures from past are numerous and well known, yet they are deliberately ignored. As the World Banks Quality Assurance Group notes in an internal report that institutional amnesia is the corollary of institutional optimism. Pakistan Water Assistance Strategy is the latest example of this amnesia.

41

World Bank Inspection Panel, Investigation Report on National Drainage Program Project, (Washington D.C. 2006): p. xvi

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Sway of foreign consultants and experts

It is a skillful circus and the acrobats know each other well. Occasionally theyll swap parts-a bureaucrat will join the Bank, a Banker will surface as a Project Consultant. At the end of the play, a huge percentage of whats called Development Aid is re-channeled back to the countries it came from, masquerading as equipment costs or consultants fees or salaries to the agencies own staff.

Arundhati Roy, Greater Common Good Foreign consultants and experts play crucial role in international aid economy. It is improbable to think that the international financing agencies would approve any mega project without the involvement of foreign consultants and experts. Foreign consultancies tied to international aid help financing agencies to re-channel large amounts of lending back to business in the donor countries. For example, in 1994, U.K. consultants earned $ 2.5 billion on overseas contracts.42 Similarly, U.S. Treasury study conducted in May 1994 shows that U.S. companies won $2.7 billion in the World Bank contracts last year for the $1.5 billion that the government donated to multilateral banks. The authors say that the estimates are crude and represent perhaps 40 percent of the total value of contracts the United States won from multilateral banks because not all World Bank contracts are identified by country of origin. Indeed, the amount of aid which comes back to the donor countries in the form of consultancies and procurement is actually far more than the tied aid statistics suggest: some 85 percent of the untied loans which Japan makes to the poorest countries are spent in Japan.43 The trust funds in the World Bank and other multilateral banks enable donor governments to skew project contract awards in favor of companies from their country.
42

Arundhati Roy, The Cost of Living: pp. 34-36 Robert .Forest, Japanese Aid and Environment, in The Ecologist, Vol.21, No. 1, (1991)

43

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Unlike the contracting process, which is officially competitive, the consultants are hired at the discretion of the task manager in charge of the loan at the Bank. In order to select a consultant, task managers can access an internal roster of experts, called Data on Consulting Services, that is available to all Bank staff. Any consultant can get on to this list for three years provided they meet certain minimum standards set by the Bank. In the case of mega development projects, it is always easier to tie aid to foreign consultancies as well as large items of capital spending and procurement. This is one of the crucial explanatory factors why international aid agencies prefer to lend money for mega development projects. The history of water development in Pakistan provides an ample example how foreign consultancies are not only an important mechanism for re-channeling aid to donor countries but also it details their dominant role in decision making. The role and involvement of foreign experts in water sector of Pakistan was started in 1948, the very first year after its birth. Americans and Canadian, besides UNESCO, studied the mounting problem of water logging and salinity and advised tubewell pumping to lower the water table.44 Later on, it was the World Bank funded Indus Basin Project (IBP) in the early 1960s which opened the gate to the flood of foreign engineering consultants and experts.
Costs of Foreign Consultants Services for Indus Basin Project Works
Description Consultant Firm Costs in Millions (Pak Rupees) US $

Barrages Link Canals Tarbela Dam Mangla Dam

Coode and Partners, London, UK Tipton and Kalambach Inc., Denver, USA Tippet-Abbet-MaCarthy-Straton (TAMS) New York, USA Binnie and Partners, London, UK

55.802 102.400 1071 256

11.718 21.504 62.676 53.676

Source: The Indus Rivers

44

Khalid Ahmed, We were Swept Away in A Flood of Foreign Expertise: p. 86

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According to official statistics, WAPDA paid US $ 250 million (1960s price level) to foreign consulting firms for IBP works. Not single local consultant was included in consultancy services. WAPDAs connection with international consultant firms is notorious. The role of foreign consultants in the affairs of WAPDA was started right from its inception in 1958. Harza Engineering Company International (USA) was appointed by WAPDA as general consultant for both water and power development, including IBP45. It remained involved in designing and implementation of numerous water and power projects throughout last four decades. Recently, it was appointed as the project consultant for the most contentious Chashma Right Bank Irrigation Project funded by Asian Development Bank. Tripton and Kalmbach was another U.S.A engineering company which was not only involved in the designing of massive link canals constructed after the Indus Waters Treaty but it was also contracted as consultant to undertake studies and design groundwater and reclamation projects in Punjab. SCARP provides more than enough evidence how critical decisions concerning with the use and management of the countrys groundwater resources were entirely taken by international experts and consultants. The Revelle Panel, which was constituted after the advice of President Kennedy, was comprised of a large contingent of experts from physical and social sciences, including specialists from the Bureau of Reclamation, the US. Department of Agriculture, Harvard, M.I.T., the University of California, and from private research and engineering firms. Most of them were neither conversant with irrigation-reclamation problems nor they knew about the conditions of the Indus Basin system. Apart from pushing the country to buy costly and inappropriate tubewell technology, the Panel committed, wittingly or unwittingly, fundamental design mistakes which resulted into further cost escalation. For example, it was not taken into account that SCARP
45

Michel Aloys Aruther, The Indus Rivers: A Study of the Effects of Partition: pp. 358-359

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tubewells should be located at the heads of existing water courses, wherever possible, in order to minimize costs of conveyance channels and to reduce conveyance losses.46 Similarly, the Revelle Panel paved the way for the massive use of Green Revolution technologies including seeds, fertilizers and pesticides. A nitrogen fertilizer program under SCARP was alone to cost around $250 million. From Big Dams to Watershed
Water which is allowed to enter the seas is wasted.

Joseph Stalin, 1929 Politicians, civil engineers and economic planners have for most of this century expounded that an untamed, wild, and turbulent river has no value and it must be controlled for human progress and economic development. However, there is a sea change in the global perception about big dams and river engineering. Now it is an accepted scientific fact that healthy rivers perform numerous ecosystem services the process carried out by natural ecosystems that benefit human societies and economies. In their natural state, healthy rivers function to purify water, moderate floods and droughts, and maintain habitat for fisheries, birds and wildlife.47 The key to protecting and restoring rivers lies in treating with care and respect their entire watersheds. The watershed approach requires taking into account the complexity of the interaction between land, water and atmosphere. The protection and restoration of watersheds and floodplains depends on halting the construction of big dams and other river engineering infrastructure and abandoning conventional agricultural and urban development policies which play instrumental role in wetlands draining and paving. Most importantly, it involves changing our ways of living and adopting new life style which allows not only human economic, cultural and spiritual needs to be satisfied but also maintain healthy watersheds. However, this change can

46 47

Ibid: pp. 484, 485 Sandra Postel, Rivers for Life: Managing Water for People and Nature: p. 5

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not be effected without bringing the aid and dam industry under democratic control and governance.

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