The dam is proposed to be built on the Indus river in the Pakistan-occupied-Kashmir.
Both international lending agencies are understood to be cagey about the controversial project due to protests by New Delhi. However, Pakistan’s Council of Common Interests (CCI), headed by Prime Minister Syed Yusuf Raza Gilani, of late has cleared the multi-purpose project. The project will consist of a huge reservoir for the storage of 6.3 Million Acre Feet of water and two power stations with total installed generation capacity of 4,500 MW.
The World Bank and ADB are believed to have asked the Pakistani government to ensure that the project be supported by a political consensus.
New Delhi, however, is likely to voice its objections once again to the Diamer-Bhasha project as it is located in Gilgit-Baltistan, a part of the PoK. According to sources in New Delhi, India will continue to assert its stand that the location of the proposed project was in an area which had been under illegal occupation of Pakistan.
The World Bank and ADB are believed to be reluctant to finance the project due to objections by India over the legal status of Gilgit-Baltistan.
Gilgit-Baltistan — the northernmost part of the PoK — was earlier known as Northern Areas in Pakistan. But, the Pakistani government on August 29 last year brought into force the Gilgit-Baltistan Empowerment and Self-Governance Order 2009, which granted self-rule to the region and made provisions to have an elected Legislative Assembly and government. Gilani had on September 29 announced developmental package for socio-economic uplift of Gilgit-Baltistan.
New Delhi maintains that the entire state of Jammu and Kashmir is an integral part of India and any action to alter the status of any part of the territory under the illegal occupation of Pakistan “has no legal basis whatsoever, and is completely unacceptable.”
The Diamer-Bhasha project will require an estimated expenditure of US $12.6 billion and the Pakistani government has been desperately looking for funding by the global lending agencies.