Big Dams, Development Aid and World Bank

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Big Dams, Development Aid and World BankMushtaq Ahmed Gaad i1

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 sourceof 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 floodplains-

especially for agriculture, fuelwood and fishing- and compared these with the economicbenefits 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. 603 Robert Costanza et al, The Value of the Worlds Eco Services and Natural Capital, Nature ,387, (May 1997): pp. 254-260

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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 LargeScale Irrigation Benefits in Northern Nigeria, Ambio, 27 (1998): pp. 434-4405 Sandra Postel, Rivers for Life: Managing Water for People and Nature (Washington D.C.Island Press, 2003): P. 26 Ibid: p. 177 Patrick McCully, Silenced Rivers: The Ecology and Politics of Large Dam (New Jursy, ZedBooks: 1998): p. 26

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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 years 8. 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 choiceexcept 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 thecost of agriculture in the eastern and southern parts of the country. 11 The same process

8World Bank, Pakistan Water Economy: Running Dry: p. 939 Rashid Channa, Costs of Building Reservoir , Daily Dawn, February 12, 200710 Patricia Adams, A Financial House of Cards, the paper is available athttp://multinationalmonitor.org/hyper/issues/1994/08/mm0894_10.html11 Vandana Shiva, Water Wars (South End Press, 2002): p.55

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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 createcommercial 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 tobig 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 Arundhati Roy, The Cost of Living (New York, Modern Liberary, 1999): pp. 48-5013 International River Network (IRN), The World Bank Big Dams Legacy ( Berkley, 2007): p. 3

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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 2007dollars)

Number of people evicted by Bank dam projects: at least 10 million

Number of World Bank-funded dams that improved income of ousteesaccording to 1994 Bank wide Resettlement Review: 1

Average percent increase in number of people to be displaced atcompletion, compared to estimates to estimates at time of appraisal: 47

Percentage of IDA (International Development Association) projects thatfailed 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 actualperformance 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 theWorlds 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 WorldConservation Union in May 1998 in response to the growing opposition to big dams. It wasmandated to review the development effectiveness of the big dams; assess alternatives forwater 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.

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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 decision-

making, 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 theBank 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 Bankcame 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 25 th 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 IRN, Citizens Guide to the World Commission on Dams (Berkley, CA, 2002): p. 1216 It was envisioned to building 30 large dams, 135 medium-size dams and 3,000 smallerdams on the Narmada River. Officials estimate that the Sardar Sarovar Dam will submergeapproximately 37,000 hectares of land and 245 villages in three states in India.

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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

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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 borrowing-

government officials, in which they reflect on some of the root causes of poor portfolio

performance. The interviews showed that borrowing-country counterparts felt that theBank 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 Ibid: p. 2519 World Bank, Report of the Portfolio Management Task Force ( Washington, D.C. 1992): p.26

20 Ibid: p. 36

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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 hasannounced 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 contentiousprojects, rather than the risk to the security of local livelihoods and environment.

21 World Bank, Water Resources Sector Strategy , (Washington, D.C. 2003): p.3322 World Bank, Cost of Doing Business: Fiduciary and Safeguard Policies and Compliance(Washington D.C. 2001): pp.vii,7

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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 theearly 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

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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 mostwinning 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 TennesseeValley Authority, toured both India and Pakistan in February 1951. Lilienthalreturned from the Indian Subcontinent with the proposal the US should first

tackle water dispute between two countries. Only then, Lilienthal argued, wouldrelations between two countries be calm enough for discussion on Kashmir.Lilienthal urged that that tortured question of water rights be removed from thepoliticians negotiating tables and handed over to the engineers of the twocountries to work over, with the technical and presumably financial help of the

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

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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 Basinfor 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 beconsidered. Thirdly, the matter should be approached from a functionalperspective. Lilienthal also envisaged the involvement of a third party, such asthe World Bank, in bringing the disputants to the negotiation tables.

The World Bank was equally enthusiastic to enter into the negotiation becausethe dispute seriously jeopardized the prospect for its water investment in theregion. However, the manner in which the Treaty was negotiated andconcluded, lends and impression of external pressure group network exerting

their influence since huge investments were involved in the construction of bigdams and canals. It is a reflection on the functioning of the World Bank whichwas influenced by the Cold War politics in the region and by the interestedconstruction 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 treatywill 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 India 25, 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 Fred Pearce, Water Wars, in New Scientists , vol. 174, Issue 2343, (May, 2002): p. 1826 Blankenship Erin, Kashmir Waters: Good Enough for Peace, on line. Accessed athttp://www.pugwash.org/reports/rc/sa/kasmiri-water.htm

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made by Pakistan through rack-two diplomatic channels since 1999 has referred to

water as a pivotal concern 27.

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 harnessonly 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 and27 Ibid28 Prof. K. Warikoo, Indus Waters Treaty: The View from Kashmir , available athttp://www.jammu-kashmir.com/insights/insight20060601a.html29 Ibid30 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

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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 two-

third 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 worksincluding 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 spanned31 Michel Aloys Aruther, The Indus Rivers: A Study of the Effects of Partition (London: TaleUniversity Press): pp. 355-360

32 World Bank, Pakistans Water Economy: Running Dry: pp. 94-97

33 Patrick MacCully, Silenced Rivers: p.123

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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 andthen 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. By1961, 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 thesame 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 bysalinity.

Water logging occurs due to hydrological imbalances. Every part of land has,over centuries, developed a natural equilibrium between the water inflows- inthe form of rain, underground inflows, etc. - and the outflows in form of surfaceand subsurface flows and drainage, evaporation and so on. Massive non-natural inflows of external water from canal irrigation without equivalentoutflows disturbs this equilibrium and results in rising water tables as theexcess water percolates into the ground and accumulates. When the raisinggroundwater 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 athttp://www.dams.org/kbase/studies/pk/35 Ibid, p. 836 Perera Jayantha, Irrigation Development and Agrarian Change: A Study in Sind, Pakistan,(New Delhi, Rawat Publications, 2003): p109

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ultimately rendering the land into a wet desert.Water logging diminishes the capacity of the ground to absorb monsoonwaters leading to flooding and surface ponding. The disruption of naturaldrainage patterns due to the construction of canals, roads, railways, blockageof drains, etc. further exacerbates the problem.

Salinization is also closely linked with both surface and subsurfacehydrological processes. The rising groundwater dissolves and brings the saltsto 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 wasseverely 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. 86-8738 World Bank, Pakistans Water Economy: Running Dry: p.96

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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

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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 surfaceand 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-abureaucrat 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 thecountries it came from, masquerading as equipment costs or consultants fees or salaries to theagencies 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 megaproject 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

43 Robert .Forest, Japanese Aid and Environment, in The Ecologist, Vol.21, No. 1, (1991)

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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 IBP 45. 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. Thewatershed 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 livingand 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 Ibid: pp. 484, 48547 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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Documents

Big Dams, Development Aid and World Bank