Economic Evaluation of Kalabagh Dam

to assess its Impacts on Individual Provinces

It is being pleaded by the Government that, the Kalabagh Dam is the sole savior of Pakistan’s economic system, and is the only path left to put the country back on the real path to development.

This, it is said, will be achieved by bringing more area under irrigation to produce food, and generating cheap hydel power to keep the industrial machinery running at economical cost. In addition, it is pleaded that the high cost of damages due to floods will be reduced (eliminated) by constructing the Dam at Kalabagh.

The determination of KBD’s potential to eliminate the flood-damages requires little investigation, since it has already been discussed at length in the technical section of this report, and it has been deduced that the net impact may even be to exacerbate the losses because of upstream flooding probability and because of the no flood-storage provision in the reservoir or in the operating schedule of the dam.

 The economic impact of KBD in bringing more area under irrigation and meeting the power needs of the country requires an analysis, in the purview of the present irrigation and power system of Pakistan, so as to assess the possible distribution of economic benefits among the various federating units of Pakistan, and for an indication of the net beneficial impact on the people living in various parts of the country.

At this stage, a clarification on the true meaning of the word " development" would not be out of place, since it has often been confused with the implementation of certain high profile projects or with the provision of certain basic facilities to the people.

According to Dr. Mahbub-ul-Haq "the purpose of development is not just to enlarge incomes, but to enlarge people’s choices, and that these choices extend to a decent education, good health, political freedom, cultural identity, personal security, community participation, environmental security, and many other areas of human well being".

Also "economic growth does not automatically translate into human development; a link between growth and human lives must be created through conscious national policies".

Another school of thought portrays the ultimate objective of development as the equitable distribution of income (resources) among the people, which is commonly represented by the Gini-Coefficient, indicating the relative distribution of resources among the various income groups.

According to the Economic Survey of Pakistan 1996-97, the situation has deteriorated in Pakistan, since the Gini-Coefficient has increased from 0.386 to 0.410 in the period of 1962-63 to 1992-93.

Thus, the establishment of a number of industrial units by a group of millionaires, the construction of a motorway or the upgradation of an airport terminal to a most modern one does not necessarily mean the country getting developed.

Similarly, the provision of phone booths at street level or the villages’ getting connected to the national electricity grid does not entitled the country to be called as a developed nation.

Therefore, the objective of Pakistan’s developmental policies should not only be to increase the choices of its people towards the basic necessities of life, but to ensure an equitable distribution of the benefits among its people, living in its different parts. And it will be this premise of development that will be analyzed in the following paragraphs, to check the suitability of KBD in increasing the people’s choices of the various parts of the country, in an equitable proportion.

Irrigation Water Utilization

The irrigation system plays an important role in ensuring the continued supply of the basic necessity of human life; the food, since the agriculture system cannot survive without the timely application of irrigation water to produce food grain.

Pakistan is fortunate to have an extensive irrigation network, which commands a large area to produce food for its people and cotton for export to earn precious foreign exchange.

The Kalabagh Dam will surely enhance the limits of this network and bring additional land under the command. However, it is also feared to negatively affect a good enough proportion of land through seepage’s and surface salinity, and which has been discussed at length in the technical part of this report.

To estimate the positive impact of KBD in achieving the ultimate development objective, we will analyze the irrigation enhancement capability of KBD in the purview of our aforementioned definition of "development".

In this respect, a closer analysis of the irrigation network of Pakistan, and its distribution in the various divisions of the country is discussed below.

Province-wise distribution of actual Culturable, Canal Command and Canal Irrigated Areas

The true meaning of above figures will become more evident when they are viewed in their respective percentages. These are shown below :

Province-wise percentage distribution of Culturable, Canal Command and Canal Irrigated Areas

A further closer view will be achieved when the above figures are viewed in the purview of the total available geographical areas of the different provinces. Which are as mentioned below : 

Considering the land area to be the common denominator for comparison, it is observed that :

The above evaluation clearly indicates the relative importance of Punjab and Sindh, to work as the food (and cotton export) machine for the whole of Pakistan, because of their major share in the total cultivable area of the country, with Punjab claiming 43%, followed by Sindh contributing 30% of the total cultivable area of the country.

However, the second column of the above table presents the relative distortion in the relative Canal Command Areas of the various provinces. Which depicts that :

i. For Punjab, 55% of the total cultivable area is under the canal command;

ii. For Sindh, 50% of the total cultivable area is under the canal command;

ii. For NWFP, 24% of the total cultivable area is under the canal command;

ii. For Baluchistan, 6% of the total cultivable area is under the canal command.

Whereas, part of this huge disproportion can be blamed on the particular landscape of NWFP and Baluchistan, the difference is too big to be overlooked. And, it can very well be attributed to the lack of suitable infrastructure, such as canals for carrying the irrigation water to the available cultivable areas or installation of tubewells to explore the groundwater table, for bringing the neglected provinces at par with the other ones.

The availability (or lack of it) of suitable canal infrastructure for bringing the cultivable areas under canal irrigation can further be observed from the third column of the above table. Which shows that :

i. 45 % of the total cultivable area of Punjab is under canal irrigation

ii. 41 % of the total cultivable area of Sindh is under canal irrigation

iii. 17 % of the total cultivable area of NWFP is under canal irrigation

iv. 6 % of the total cultivable area of Baluchistan is under canal irrigation

Whereas, the above illustration indicates the relative importance of constructing more canals for bringing the additional canal command area under irrigation, i.e. 10% in Punjab, 9% in Sindh and 7% in NWFP, the important aspect will be to evaluate their overall economic impact in the various provinces with respect to each other, due to the concentration of overall benefits in one or more provinces of the country, with expenditure common resources of all the four federating units.

In the above tables, the relative percentages of canal command (or canal irrigated) areas to the available cultivable areas work as an eye opener to reveal the story of negligible investment, over the years, in NWFP and Baluchistan in developing 17 % and 6% of the available cultivable area respectively, as compared to the Punjab and Sindh Provinces where the same has been developed to the tune of 45% and 41% .

Thus for producing more food for the growing population, with an equitable distribution of resources out of the common kitty, the first priority should be to utilize the available 94 % cultivable area of Baluchistan and 83 % cultivable area of NWFP, through canal or tubewell irrigation, rather than pumping more resources into a project that will increase the canal command areas of Punjab and Sindh, resultantly acting to further concentrate the benefits in these areas.

The anomaly in distribution of basic agricultural inputs can further be observed from the water distribution of "Water Apportionment Accord 1991". Which says that :

1. Distribution of existing water resources among the provinces will be as follows : 

2. Distribution of future water resources among the provinces will be as follows :

An analysis of these figures in the backdrop of the total geographical areas and the total cultivable land areas of the provinces reveal that :

This distribution of the major agricultural input, water, is anything but disproportionate from every angle and will only act to push one province against the other in the long run. Therefore, the need of the hour is to identify the priority development areas from the point of view of an equitable distribution of resources so as to equally benefit all the residents of the country.

Electric Power Utilization

Before venturing into the economic evaluation of KBD on the various provinces due to the electric power benefits, it is required to study the present pattern of electricity consumers and electricity utilization in the four Provinces.

In this respect, the following tables from the WAPDA’s statistical data will work as a basis of our analysis.

Analysis of the above tables reveals the following percentages of category-wise electricity consumers, and total electricity consumption in various provinces of Pakistan :

 Electricity Consumers and Power Utilization in Various Provinces

Ref : WAPDA Statistics Division Report

Percentage of Prominent Consumers in various Provinces

Ref : WAPDA Statistics Division Report

From a closer look of the above tables, it is observed that:

 1. Punjab has a total number of consumers, which are :

 - 4.56 times that of NWFP

- 8.12 times that of Sindh, and

- 24.34 times that of Baluchistan

2. The composition of Electricity Consumers in Pakistan reveals that, Punjab has the following category of consumers in the under-mentioned proportion :

 3. Punjab utilizes electricity, which is :

- 4.06 times that of NWFP

- 5.9 times that of Sindh, and

- 16.25 times that of Baluchistan

To develop a common basis of comparison, the analysis of these figures are required to be viewed in purview of the area and population of the various provinces. Which are as follows

Percentage Area & Population of the Various Provinces

Ref : NWFP Development Statistics 1995 & 1996

 From a closer look of the above table, it is revealed that :

A Comparison of this table with the previous figures suggest that :

Thus for any investment into the power sector, out of the common resources, the Punjab Province will benefit in an advantageous manner due to the comparatively wider network of consumers and greater use of electricity.

 This could be studied further under two possible perspectives :

 1. Considering the land to be the common denominator between the Provinces

The additional power benefits will distribute as follows :

 a. Number of consumers benefited

- 2.28 times of consumers will benefit in Punjab as that of NWFP

- 5.6 times of consumers in Punjab as that of Sindh

- 40.46 times of consumers in Punjab as that of Baluchistan

 b. Electricity utilized

- 2 times in Punjab as that of NWFP

- 4 times in Punjab as that of Sindh

- 27 times in Punjab as that of Baluchistan

2. Considering the population as the common denominator between the Provinces

The additional power benefits will distribute in the following manner :

 a. Number of consumers benefited

- 1.29 times of consumers will benefit in Punjab as that of NWFP

- 3.3 times of consumers will benefit in Punjab as that of Sindh

- 2.24 times of consumers will benefit in Punjab as that of Baluchistan

 b. Electricity utilized

- 1.15 times in Punjab as that of NWFP

- 2.4 times in Punjab as that of Sindh

- 1.5 times in Punjab as that of Baluchistan

 Going back to the table of consumer analysis in various provinces we observe that :

From every single rupee investment in Power Sector of Pakistan

I. For Punjab Vs NWFP

- 4.62 Domestic Consumers benefit in Punjab against every individual consumer in NWFP

- 5.53 Commercial Consumers benefit in Punjab against every individual consumer in NWFP

- 6.41 Industrial Consumers benefit in Punjab against every individual consumer in NWFP

- 5.38 Agricultural Consumers benefit in Punjab against every individual consumer in NWFP

II. For Punjab Vs Sindh

- 9.25 Domestic Consumers benefit in Punjab against every individual consumer in Sindh

- 6.54 Commercial Consumers benefit in Punjab against every individual consumer in Sindh

- 7.7 Industrial Consumers benefit in Punjab against every individual consumer in Sindh

- 7.0 Agricultural Consumers benefit in Punjab against every individual consumer in Sindh

III. For Punjab Vs Baluchistan

- 37 Domestic Consumers benefit in Punjab against every individual consumer in Baluchistan

- 24 Commercial Consumers benefit in Punjab against every individual consumer in Baluchistan

- 77 Industrial Consumers benefit in Punjab against every individual consumer in Baluchistan

- 10 Agricultural Consumers benefit in Punjab against every individual consumer in Baluchistan

To analyze the impact of above distortions on the economic development of the various provinces with respect to Punjab, we can derive some interesting & revealing impacts.

If we assume that, the domestic consumers’ electricity use is solely for non-productive purposes, and the commercial, industrial and agricultural electricity consumers utilize the electric power for economic development, we arrive at:

I. Economically Productive Consumers in Punjab are, on the average, 5.77 times that of NWFP

I. Economically Productive Consumers in Punjab are, on the average, 7.1 times that of Sindh

I. Economically Productive Consumers in Punjab are, on the average, 37 times that of NWFP

Thus any developmental activity in the power sector will push Punjab up, 5.77 times that of NWFP, 7.1 times that of Sindh and 37 times that of Baluchistan, in the economically productive sectors.

In view of this, the power generated at Kalabagh Dam will act to make the Province of Punjab, and its people, develop further and the other three provinces getting progressively dependent on it for employment and basic necessities of life.

In addition, the people of the other three provinces will also be discredited for their basic right to an equal opportunity to facilities and opportunities created out of the common resources.

Therefore, for a balanced development in future, the disparities in power consumption should first be eliminated before any more investment, out of the common kitty, that makes the rich more richer and further develops the comparatively developed province at the cost of under-developed provinces of the country.