During the financial year 1953/54, Cabinet approved assistance for the following projects in Pakistan in the amounts indicated:

(a) August 10-extension of aerial resources survey-$1 million ⁵⁸

(b) September 9-additional funds for Warsak Project-$3.5 million ⁵⁹

In addition, in May last, Cabinet agreed to the temporary financing from Colombo Plan funds of a second $5 million emergency gift of wheat to Pakistan to avert famine. ⁶⁰ Following on approval by Parliament of the Final Supplementary Estimates, this amount has been reimbursed to the Colombo Plan fund.

The Government of Pakistan is now anxious to be informed of the decisions of the Canadian Government on the other projects which were formally put forward for Colombo Plan aid from Canada in 1953/54. The assistance requested was as follows:

(a) Provision of a thermal power plant for the Ganges-Kobadak Irrigation Scheme in East Pakistan.

(b) Provision of three or four small canal falls hydro-electric units for the Punjab Tubewell Drainage and Irrigation Programme.

(c) Provision of a 153-mile electrical transmission link between Dacca and the port of Chittagong in East Pakistan.

The possibility of Canadian aid for the Ganges-Kobadak Project and for the Punjab Canal Falls power development was raised in my memorandum to Cabinet of August 4, 1953, when it was recommended, and Cabinet agreed, that a Canadian engineer familiar with the construction of thermal power plants be sent to Pakistan to report on the feasibility of the Ganges-Kobadak scheme so far as the power component was concerned, and to draw up specifications for a suitable thermal unit; in addition it was decided that an engineer should investigate the proposed Punjab canal hydro-electric power units. In the meantime no decision was taken on the provision of the aid for these two projects.

A full engineering report on the proposed thermal power unit for the Ganges-Kobadak scheme has now been received from Mr. R. Hanright, Canadian consulting engineer, who has also submitted a report on the requested electrical transmission link between Dacca and Chittagong. The H.G. Acres Company has submitted a preliminary report on the Punjab Canal Falls hydro-electric schemes.

In the light of the engineering reports which have been received, further interdepartmental consideration has now been given to the question of providing the requested assistance to Pakistan for the three above schemes. These projects and the considerations affecting them as agreed upon on an interdepartmental basis at the official level are outlined in the Annex to this submission.

In addition, and in order to round out the 1954/55 programme of assistance for Pakistan, the officials concerned have considered the possible allocation of a further $2 million for the provision of equipment for the Warsak hydro-electric project. This project and previous Cabinet decisions with respect to Canadian aid thereto are also described in the Annex.

The total of assistance which it is suggested might now be allocated for Pakistan is as follows:

Of the above total sum, $5 million might be regarded as completing the 1953/54 programme for Pakistan, since the 1953/54 allocations to date total only $4.5 million compared with $10 million in 1951/52 and about $9 million in 1952/53. On this basis, and if Cabinet were agreeable to the provision of aid as suggested, the programmes for the two years would be as follows:

It is suggested that it would not be prudent to envisage aid to Pakistan in the current fiscal year in excess of the amount of $7.8 million indicated above until anticipated demands on 1954/55 appropriations to provide continuing aid for India and Ceylon are clearer, and it also becomes clear whether it will be desirable to provide any assistance to Indonesia and other Colombo Plan countries which have not so far received any Canadian capital aid.

Recommendation

I recommend that additional assistance to Pakistan under the Colombo Plan be provided as follows and be financed from the balance of funds appropriated for Colombo Plan purposes in earlier years and as necessary from the further Colombo Plan appropriation which Parliament is being asked to approve for 1954/55.

(i) Ganges-Kobadak Scheme

It is recommended that Canada provide (a) a suitable thermal power plant for the Ganges-Kobadak scheme; and (b) the services of Canadian engineers to assist the Pakistan engineering authorities in the erection and installation of the equipment to be supplied from Canada. Estimated cost - $1.8 million.

The above assistance to be provided on receipt of prior assurances from the Government of Pakistan that the appropriate Pakistan authorities accept responsibility for:

(a) all costs not covered by external assistance;

(b) ocean freight and insurance on the Canadian equipment to be supplied;

(c) the establishment of a rupee counterpart fund in respect of the equipment to be provided from Canada, in an amount to be agreed between the two Governments;

(d) the foundation work, building, and all other civil work connected with the thermal power station, together with supervisory engineering services foremen and the necessary labour.

(ii) Punjab Canal Falls Hydro-electric Projects

Because of the technical uncertainties and the possibly important political implications of these projects in connection with the canal waters dispute between India and Pakistan (outlined on pages 4 and 5 of the Annex), it is recommended that final decisions on assistance for this project be deferred, but that the Government of Pakistan be informed

(a) of the willingness in principle of the Canadian Government to provide electric generating equipment and necessary engineering services and possibly certain transmission lines in the Punjab for the tubewell irrigation and drainage scheme to an amount of the order of $5 million;

(b) that the final decision on whether such aid will be supplied and on the precise form in which any power might be provided would depend on the further investigation of the Canal Falls sites at Shadiwal, Chichoki-Mallian and Gujranwala by Canadian hydro-electric engineers, and the possibility of providing power more efficiently and reliably by other means;

(c) that in view of the urgency which the Government of Pakistan attaches to assistance for this project, the above engineers will arrive in Pakistan in three to four weeks and will be instructed to submit a technical report on which firm decisions can be based on the three proposed hydro-electric developments or alternative sources of power at the earliest possible moment.

(iii) Dacca-Chittagong Link

It is recommended that Canada provide the electrical equipment and material required for the Dacca-Chittagong link in accordance with the recommendation of the Canadian consulting engineers, together with engineering services, to include all engineering, supervision of designs and drawings, supervision of installation, and assistance to the Pakistan engineering authorities in the preparation of foundation and installation specifications. Estimated cost - $4 million

The above assistance to be provided on receipt of prior assurances that the Pakistan authorities will

(a) supply all the material for foundations and housings;

(b) prepare all roads and rights-of-way for the transmission link;

(c) provide all necessary labour and meet all local costs;

(d) set aside a rupee counterpart fund in respect of the aid to be provided from Canada in an amount to be agreed between the two Governments;

(e) assume responsibility for ocean freight and insurance for the equipment to be provided from Canada and local transportation in Pakistan of such equipment to the site of erection.

Any Canadian assistance for the Dacca-Chittagong link should be closely coordinated, in consultation with the Pakistan authorities concerned, with the results of the power survey being conducted by the United States in connection with the Karnafuli project.

(iv) Warsak Hydro-electric Project

It is recommended that a further allocation of $2 million be made for the Warsak project against the estimated cost of the hydraulic, electrical and related equipment required for this scheme.

Should Cabinet approve the above recommendations every effort will be made to ensure that adequate arrangements are made by the Pakistan authorities for the efficient execution of the schemes, for the coordination of the activities of the agencies and authorities concerned, and for the effective administration of each project on completion. ⁶¹

Paul Martin

This is a project to increase agricultural production in the Ganges delta area of East Pakistan. It is planned that some 2 million acres will eventually be covered by the scheme and it is estimated that the increased water supply during the dry season and improved drainage during the monsoon will, through higher yields and double cropping, permit the production of an additional 975,000 metric tons of foodstuffs annually. In its first phase, the project will cover approximately 250,000 acres, of which 175,000 will be irrigated. For this initial phase, the annual increase in food production is estimated at 130,000 tons. The Ganges-Kobadak Irrigation Project has been investigated and developed in detail by a specialist F.A.O. team under the leadership of Dr. van Blommestein. A soil survey and land use survey have been carried out. The F.A.O. recommendations for the first phase of the development are reflected in the pro forma for the scheme which has been formally approved by the Government of Pakistan. The basis of the project is the pumping of water from the Ganges River into a network of irrigation canals. Periodic flooding during the monsoon will be controlled by enlarging and clearing old river channels which have become silted and by artificial drainage. The project involves three main components; a power station, a pumping station, and the irrigation and drainage channels.

Canada has been formally asked to assist the Ganges-Kobadak Project by the provision of the coal burning thermal power station to be composed of two 5,000 kilowatt units. The F.A.O. team has expressed the hope that any plant provided by Canada should be designed to burn either coal or wood, since the burning of local woods would probably be more economical than the use of imported coal. The amount of power which could be provided by a station of the kind requested would be somewhat in excess of the immediate power needs for the initial phase of the scheme, but all the power will be required during the next phase of expansion, and there is a demand for industrial power in the area.

An agreement has been negotiated between the United States and the Government of Pakistan for the provision by the United States of the pumping equipment required for the scheme and other assistance in an amount of $1,950,000. It is understood this agreement will shortly be signed, but that it will not be brought into operation until the United States authorities are assured that power will be provided. United States assistance for Ganges-Kobadak Project is thus linked with the provision of a thermal power station by Canada.

In accordance with the decision of Cabinet of August 5, 1953, the Ganges-Kobadak scheme, particularly its power component, has been examined by a Canadian consulting engineer, Mr. R. Hanright, who has reported favourably on the provision of a plant of the size and character requested. An option at an attractive price on a suitable thermal plant owned by the Ontario Hydro-Electrical Commission has been obtained. The High Commissioner in Karachi has recently advised that financial provision for its share in the implementation of the project has been made by the Government of East Bengal. At present a thermal power plant composed of two 5,000 kilowatt units is contemplated. The question of the most suitable type of fuel to be used remains under discussion. The possibility of providing boilers adapted to burn either coal or wood is under investigation. If that is not technically feasible, agreement will be reached with the Pakistan authorities on the choice to be made between the use of coal or of wood as seems most appropriate after further consultation. In the circumstances, it would appear timely to decide what Canadian assistance might be provided for this project in response to the request by the Government of Pakistan.

The Punjab is the most important agricultural area of West Pakistan. Farming in this area depends on irrigation waters drawn from the rivers of the Indus system. A serious problem exists in the Punjab as a result of the seepage of waters from the irrigation canals over the years. The water table has risen in certain localities, and land is going out of cultivation through waterlogging and the related increased salinity of the soil. The Pakistan authorities have estimated that as a result of these conditions 2 million areas of agricultural land have already become unfit for farming, and about 40,000 acres are going out of cultivation each year.

To rectify this situation, the Pakistan authorities, in cooperation with the F.A.O., have drawn up a tubewell drainage and irrigation project. The proposal is to sink tubewells in the waterlogged areas in order to lower the water table. The pumped water would (a) be carried to water-short areas through the existing irrigation system and (b) be used to wash out saline land in order to restore it to cultivation.

The first tubewell project in the Punjab was started in 1945 and under this scheme 1,350 tubewells were sunk. It proved impossible fully to carry out the planned programme, because after partition the power generated at the Rasul Hydro-electric Station, which was originally intended to energize the wells, had to be diverted for urgent industrial purposes. Power is now required to run these wells and some 2,000 additional wells which the Government of Pakistan is proposing to sink following on further studies with respect to their siting and the completion of a ground water survey for which an agreement has been negotiated with the United States authorities. A pilot scale tubewell project is now in operation in the area under the technical direction of F.A.O. officials.

The Government of Australia has undertaken to assist the Punjab tubewell project and has agreed to provide £2 million worth of equipment, mainly pump motors, tubewell casings and drilling equipment.

The successful implementation of the Punjab drainage and irrigation scheme depends on the provision of power for the pumps. In this connection, the Government of Pakistan has requested Canada to provide three hydro-electric units which would rely for the generation of power on existing canal falls. According to the plan, each of the units would be of 12,000 kilowatts. Two of the units would be situated on the Upper Chenab Canal and two on the Upper Jhelum Canal.

In accordance with the decision of Cabinet of August 5, 1953, a preliminary investigation of the proposed canal falls hydro-electric sites has been undertaken by an engineer of the H.G. Acres Company. The Company has reported that the canal projects would have several advantages and that the cost of energy from them would compare favourably with that from alternative sources. However, it has been suggested that no commitment be made to provide these power stations until:

(a) it is known that the availability of flow from the drainage area to the canal head works is positively assured as to quantity and continuity;

(b) the foundation conditions are fully known and proved satisfactory by sub-surface exploration, sampling and testing;

(c) the sites are inspected by an expert hydro-electric engineer who may assess all conditions and data.

The H.G. Acres Company has estimated that the cost of providing the hydro-electric transmission and switching equipment required for the three power developments would be of the order of $5 million.

The reference in the H.G. Acres report to the availability of water flow from the drainage area to the canal head works relates in part to the possibility of Indian diversion of the rivers on which the two canals in question depend for their water. The information which has been received from the High Commissioner's Office in Karachi indicates that there is little or no possibility of Indian diversion of the Jhelum, but that some Indian diversion of Chenab waters, although difficult and expensive, would be technically feasible. Such diversion would, of course, have major political repercussions and presumably would only be undertaken by India if it was prepared to take the serious risks involved. The whole question of the division of the border waters between India and Pakistan is now under consideration in the World Bank, but the Bank's recommendations have not yet been made public. However, it would seem unlikely that any recommendations which the Bank might make would involve any substantial reduction in the flow of the Chenab through Pakistan.

So far as the foundation conditions at the three proposed canal falls sites are concerned, certain investigations are being undertaken for the Pakistan Government by Swiss-borings Limited. The results of this company's investigations are not yet known.

There is a possibility that the provision of hydro-electric plants on the Punjab canals by Canada may be regarded by the Government of India as prejudicial to the canal waters dispute between the two countries. For example, the Indians might consider that the erection of such hydro-electric plants would have the effect of strengthening the Pakistan claim to the disputed waters. Since the three sites for which it is suggested aid should be considered are in Pakistan territory and the flow of water to them appears to be relatively secure, short of Indian diversion of the Chenab (with the political results which such diversion would involve), it would seem that any Indian protest about the provision to Pakistan of the aid requested for power development in the Punjab would be unwarranted. The Governments of Australia and the United States are apparently willing to provide assistance for the Punjab tubewell scheme, and Canadian refusal to participate therein on political grounds would adversely affect the relations between Canada and Pakistan, more particularly as the project is clearly of great importance to the improvement of agriculture in the Punjab and the Government of Pakistan attaches the highest importance to it.

In all the circumstances, it would seem desirable to defer at this stage any final decision on the actual provision of hydro-electric units for the proposed canal falls sites. At the same time, it is suggested that the Government of Pakistan should be given an assurance that in principle Canada would be prepared to provide power for the tubewell scheme, but to leave open for the time being and until further investigations have been carried out, the final decision on whether such aid would be supplied and, if so, in what form. In this connection, account should be taken to the extent possible of the power survey of West Pakistan which is to be undertaken by the Pakistan authorities at the suggestion of the International Bank for Reconstruction and Development.

As part of the electrical development of East Pakistan, it is proposed to construct a transmission line between the diesel plant now under construction near Dacca and the port of Chittagong, where there is an urgent demand for power. This line will form part of a future grid system for which the major source of power will be the hydro-electric station which is being developed on the Karnafuli River some 40 miles from Chittagong. When the Karnafuli development is completed, the power will flow over the Dacca-Chittagong link in the reverse direction.

Canada is being asked to supply the transmission line from Dacca to Chittagong, a distance of approximately 153 miles. The project has been inspected by Mr. R. Hanright, Canadian consulting engineer, who has estimated that the cost of engineering the transmission line and providing the imported materials would be of the order of $3.7 million.

At the instigation of the International Bank for Reconstruction and Development, a power survey of East Pakistan is to be undertaken as part of the engineering examination of the Karnafuli hydro-electric development which is being financed by the United States. The IBRD representative in Pakistan has indicated that there would be no need for the Canadian Government to hold up its decision on the Dacca-Chittagong link until the power survey has been completed. He has suggested, however, that Canadian assistance for the project should be fully coordinated with the results of the power survey.

In view of the importance of providing electric power to the Chittagong area, of the favourable report on this project by Mr. Hanright, and the important part which the requested transmission line will play in the Karnafuli grid, it is considered that the Dacca-Chittagong link would be a suitable project for Canadian assistance.

The Warsak project is located on the Kabul River in North-west Pakistan. The plant is being designed to produce 150,000 kilowatts of electric energy, which will be used in the North-west Frontier Province and in the neighbouring power-short Province of Punjab. The Warsak scheme will also contribute to increased food production through the irrigation of 93,000 acres of land. The project is expected to take seven years to complete. It was examined by Canadian engineers and found to be a sound practical scheme which could be undertaken in the confidence that it would produce electric power efficiently and economically.

Cabinet considered Canadian participation in the Warsak project on March 26, 1953 and agreed that $3.4 million should be allocated from the 1952/53 Colombo Plan Vote for the provision of part of the necessary generating and related electrical equipment. Cabinet was at that time informed that the equipment requirements from outside Pakistan would amount to approximately $14 million. In this regard, Cabinet agreed that the Government of Pakistan should be informed that additional allotments would be made for Warsak in subsequent years within the limits of the amounts available to Pakistan out of funds which might be appropriated by Parliament for Colombo Plan activities.

On September 9, 1953, a further allotment of $3.5 million was made for the Warsak project to cover the estimated cost of the provision of Canadian consulting engineering services for the re-design of the project and the supervision of construction.

It has also been agreed to allocate the rupee counterpart fund arising from the two $5 million gifts of Canadian wheat to help meet the local costs of this project.

The High Commissioner in Karachi has advised that the Pakistan authorities are anxious that a further allocation of funds for the Warsak project be made from funds which may be available for projects in Pakistan from moneys to be appropriated for Colombo Plan activities in 1954/55.

So that funds will be available to meet the costs of the hydraulic and electrical equipment which must be imported for the project as and when the need arises, it would seem desirable to make a further allocation of funds for the Warsak project.