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Khalid Mustafa

The News

Published Date: Jul 24, 2011

Company serving India being rewarded by Pakistan

In India
the government forced a foreign company to abandon a project in neighbouring
Nepal as it was considered detrimental to Indian interests. In Pakistan however
the exact opposite is taking place. UK based Halcrow company is minting
billions of rupees in constructing an anti-Pakistan project in Indian occupied
Kashmir, which will cause a severe drought on the Pakistani side and inflict a
loss of billions of rupees every year, but ironically the same company has been
awarded contracts worth millions of dollars including the critical task of
developing Pakistan’s water sector strategy.
Halcrow is involved in building the controversial Kishenganga project which
will have a severe financial and water impact on Pakistan.
Unbelievable as it may sound but our water experts chose Halcrow to develop the
‘Pakistan Water Sector Strategy’. M/s Halcrow is playing a pivotal role in
Kishanganga hydropower project that would not only bring the death sentence for
Neelum valley, but also impact the electricity generation of $2.34 billion
Neelum Jhelum Hydropower project. The situation becomes all the more alarming
that Halcrow knows each and every word of Pakistan’s future plans while its
larger economic interests lie in India.
According to the documents available with The News, working with joint venture
partner Hindustan Construction Company (HCC) in the execution of the
Kishanganga project by 2014, Halcrow has done the detailed design of the civil
works, and also doing the job of coordination with the electrical and
mechanical designer/contractor and providing site support to the HCC since
The eminent water expert Arshad Abbasi currently associated with SDPI said the
officials who are the responsible for all water ills need to be probed as they
are involved in giving the contract to Halcrow to develop ‘Pakistan Water
Sector Strategy’ and other water related projects.
The Kishanganga hydropower project, according to one estimate as per the
official document, will inflict colossal loss of almost Rs12 billion upon
national economy every year just in the head of electricity generation, which
Pakistan will not be able to produce in its Neelum-Jhelum project because of
the reduced flows of water in Neelum River. “And now MOWP engaged the said
company to carry out the Regional Environmental Assessment (REA) study of the
Gharo Wind Corridor,” said Abbassi.
According to the documents, black sheep in Pakistan’s bureaucracy also helped
Halcrow earn heavy profit on a project of ‘Environmental Impact Assessment for
Expansion of 404MW Power Generation Capacity at Uch Power Station’, but the
unscrupulous officials in water sector remained indifferent to the adverse
impact of Kishanganga Hydropower project on environment of Neelam valley.
So much so in 2005, the firm had completed a project of Social Protection Index
for Poverty Reduction in Pakistan, but the same company should also know how
much Kishanganga will bring poverty in AJK and Pakistan.
Apart from it, the feasibility study of the 84 Matiltan hydropower project is
located on Ushu River (a tributary of Swat River) was carried out under by
Halcrow in 1996. That was later rejected by M/s Synergic Hydro Asia because of
flawed design made by Halcrow.
The government functionaries should have blacklisted this company, but instead
they also give more contracts of environmental projects to Halcrow.
In 1998, Halcrow conducted the environmental study of Ormara Port Project in
Balochistan that include the land use, master plan and environmental plans for
the relocation of the Pakistan naval submarine base. Halcrow also rendered its
services in Islamabad Highway Project to calculate land use, employment and
population forecasts for Islamabad and Rawalpindi as input to a transportation
model. Halcrow is also involved in Pakistan to assess impact on poverty of
Marala Ravi Link irrigation project, Punjab.
When contacted, Hamid Mirza, the then Secretary Water and Power, admitted that
Halcrow is the company that completed the project of Pakistan Water Strategy in
2003. When asked as to why the government has not blacklisted this company
which is contributing its pivotal role in Kishanganga projects, Mirza simply
said since its is an international private company so it has right to get any
project anywhere.
Halcrow did not refute its vested Indian business interests when it was sent a
questionnaire by The News. Among other questions, the company was also asked to
justify its evident clash of interest. In volume-III of Pakistan Water Sector
Strategy, Halcrow Group had proposed Neelum-Jhelum Hydro Electric Project. In
the detail description of the project, Halcrow advised GOP to develop
Neelum-Jhelum run-of-the-river hydropower project to add 969 MW hydroelectric
capacity. Halcrow also calculated the generation of 5,150 GWh of electricity
per year if flow by Neelum River remains uninterrupted. Seven years after
completing the Water Sector Strategy for Pakistan, M/s Halcrow in 2009 took the
assignment of the detailed design of the 330 Megawatt (MW) Kishanganga
hydropower on same (Neelum River) in India. With almost zero flow at Tao-butt
(the place where river enters Pakistan). The company is providing detailed
design to build tunnel to divert water from Kishanganga (known as Naleem River
in Pakistan) towards Jhelum river. This diversion would not only affect
generation of electricity by under-construction Neelum-Jhelum project started
on its advice, but would also have catastrophic environmental impact on Naleem
River. Halcrow was asked to justify its position, when a project in Pakistan
had been based on its technical recommendations and now after seven year, the
Halcrow, is showing commitment for environment internationally, also rendering
and doing business in Pakistan by working on environmental impact assessment of
various projects, but at same time is designing a project of Kishanganga that
would bring a death sentence for Neelum valley’s environment.
The News received a detailed response from Halcrow after a two-week delay and
the same is being reproduced here. Halcrow has not denied its Indian commitment
and states: “It is correct that in 2003 Halcrow Group Ltd of the UK in
association with other Pakistani consulting firms prepared the Water Sector
Strategy for Pakistan, under contract to the Asian Development Bank. In this
study, along with other policy recommendations, we included a list of run of
river hydropower schemes that were already under consideration by the Government
of Pakistan and confirmed that the development of this list of schemes would go
a long way to meeting the power needs of the country. However, we did not
conceptualise the Neelum-Jehlum project, nor have we been involved in any of
the planning or design studies for this project; the feasibility report for the
project having been undertaken by a Norwegian consultant in 1996”.
Similarly the Kishanganga project was conceived by the government of India in
the early 70s. Halcrow’s office in India was appointed in 2009 to undertake the
design of this project, but has not been involved in any of the early studies
for the project nor has made any recommendations to the government of India in
respect of its viability or its effects on the Neelum-Jehlum scheme. We do not
wish to comment any more on the subject since the issue is now with the
international court of Arbitration in The Hague and we would not wish to
prejudice the case of either country in this matter.
We wish to highlight that Halcrow is a reputed international consulting
organisation with projects in more than 70 countries across the world. As part
of an international company operating in many different social and business
environments, we always adhere to high standards of professional ethics and remain
above any political or geographic bias in delivering our projects.
Halcrow Group has made significant investments in Pakistan since 1980s, working
on numerous significant projects in water, energy, rural development,
transport, maritime and property sectors.
Halcrow response is not satisfactory as it is true that in Pakistan Water
Sector Strategy (volume 4) and detailed strategy in 2002 formulated by M/s
Halcrow Group Ltd for GOP, the consultant describes the status of Neelum-Jhelum
Hydro Electric Project and mentioned on page 202 the Installed Capacity of
Neelum hydropower. HEPO (WAPDA) and/Norconsult, 1996, had conducted the
feasibility report in 1996. M/s Halcrow Group also mentioned that it is an
excellent site for hydropower development.
In volume 3 of the strategy, the special dedicated chapter on Neelum-Jhelum
starting from page 188 was added by M/s Halcrow Group. The company also
affirmed that expected benefits of project and calculated the annual 5,150 GWh
of electricity generation units if water flow remained uninterrupted. The
question arises that when Halcrow knows the feasibility of the project once it
is completed and that based on its recommendations the project was included for
medium term development program, then why the company started a project on the
Indian site that would reduce the generation capacity of the project
recommended by it in Pakistan?
Halcrow Group took the job of Kishanganga project in 2009, fully aware that it
had itself recommended a project for another country on same river in
downstream area. Pakistan had raised the issue of Kishanganga project in 2009
on international platform in 2007, then why Halcrow had taken a controversial
In its reply to the sent questionnaire, M/s Halcrow did not utter a single word
about environmental disaster on Neelum valley being posed by a Kishanganga
project designed and supervised by it.
This is what is happening in Pakistan where companies are being rewarded for
participating in projects against our national interest. In comparison, Indian
government took a totally different stance involving their national interests.
In the Nepal case, New Delhi threatened to blacklist the Kodak Company, which
had built the hydropower project in Nepal by 30 percent at the cost of water interests
of India owing to which the said company had to abandon the project to save the
multi-billion-rupee business of Kodak India. The then Prime Minister Atal
Behari Vajpayee even turned down the request of the then US President Bill
Clinton as a US company Eastman Kodak Company had owned 80 percent of Kodak
Kodak ranked 11th most innovative companies of all time made US-India-Nepal
joint venture to set up a plant in Hetauda city of Nepal in January 1998. In
the year 2000 due to energy crisis Kodak had decided to help Nepalese
government to develop a hydropower project. India had taken serious note of it
and immediately decided not to issue a ‘certificate of origin’ needed to export
colour photographic paper to India duty-free, even though it had initial
approvals from both Nepal and India. In the joint venture, a US company Eastman
Kodak Company had owned 80 percent of Kodak Nepal. The rest was held by Kodak
India so Kodak had lobbied long and hard to get the export permit to India.
The matter was even raised by the then president of the most powerful country
Bill Clinton and Indian Prime Minister Atal Behari Vajpayee in 2000.
Nevertheless, Indian did not budge and decided to punish this highly Innovative
Company reluctantly Kodak had to dismantle the factory in December 2000. This
is a classical example how Indian establishment safeguards its national
interest. And what do we do here?