Tarbela Dam, the Tool of Aid-Imperialism

Another state action informed by a transnational body was the decision to construct the large Tarbela Dam. This too was a product of the Indus Water Treaty but in the case of Tarbela, the most influential and powerful institution was the World Bank. As Ghulam Mueenuddin, Pakistan’s chief negotiator, explained: “The biggest factor was the moral pressure of the Bank. Both of us [India and Pakistan] were terribly reluctant to appear before the world and say we were not prepared to accept the Bank’s advice” (“India and Pakistan”).

To compensate Pakistan for the loss of the flow of three perennial rivers to India, the World Bank proposed to invest in an Indus Basin Project (IBP), which included Tarbela, Mangla and Chashma dams, six barrages, eight new canals and improvements in three existing canals. In anticipation of these development projects, WAPDA, the federal Water and Power Development Authority, was created in 1958 as a semi-autonomous body. Its purpose was to coordinate and provide a unified direction to the development schemes in Water and Power Sectors, which were previously under the respective Electricity and Irrigation Department of the Provinces (“WAPDA”). This allowed the government to consolidate its power at the center, and undermine the political power of provinces with minority populations.

An Indus Basin Development Fund (IBDF) of $895 million was established to finance the IBP (World Commission on Dams, p.111). $541 million of the total fund was in the form of grants from the “friendly Governments” of the United States, Canada, United Kingdom, West Germany, Australia and New Zealand. India’s compensatory grant - for gaining the right to the three rivers - amounted to $174 million and the remaining $150 million was covered by loans (Michel, p. 248). A large infrastructure project with such a huge and largely free budget was hardly something the young Pakistan could pass up on.

However, the scale of the project opened the way for corruption, and directly benefited contractors and officials who could make big commissions. As Peter Bosshard, the Policy Director of a grassroots nonprofit International Rivers points out, large infrastructure projects, like Tarbela, are prone to corruption due to their complexity, capital intensity, and high cost (Bosshard & Lawrence).

The magnitude of the project put Pakistanis at a disadvantage. They did not have enough qualified engineers or the required technology to carry out the project on their own. It is also argued that Pakistan was under a time constraint; it needed to keep pace with the growing population (Michel, p. 360). As a result the Indus Basin Project (IBP) created a lucrative market for foreign contractors, particularly consulting firms.

Since its inception in 1958, WAPDA tied itself to the Harza Engineering Company International of Chicago. The company served as a general consultant for both water and power development, including the IBP. Pakistan imported its regulatory work by making Harza responsible for overviewing the work of other consultants before its submission to WAPDA. This responsibility, combined with Harza’s assignment to prepare a master plan for development, opened the door for this American company to maintain its interests (Michel, p. 358-359).

In the case of the Tarbela Dam, the most prominent consulting firm was also American: the Tippetts-Abbett-McCarthyStratton (TAMS) company of New York. They were former consultants to the World Bank during the Treaty negotiations, who were tasked to design the dam for Pakistan (Michel, p. 358). TAMS also contracted documents for the project and supervised the construction work (“WAPDA Hydel Generation”).

Foreign construction companies made huge profits through the decision to make this mega-dam. The Tarbela Dam project was “the world’s largest single contract for the construction of civil works”, priced at $623 million. WAPDA gave the contract to the Tarbela Dam Joint Venture, which was a group of three Italian and three French heavy construction companies. Later, five German and two Swiss contractors joined the group as well, making up a European thirteen member consortium led by Impregilo, an Italian firm (“WAPDA Hydel Generation”). The payment to these foreign firms, in effect, returned the grant money to the first world. In fact the contract was in excess of the $541 million grant.