Snag in NE power loan

by JAYANTA ROY CHOWDHURY

New Delhi, June 24: India will not seek loans from international agencies such as the World Bank for the Arunachal Pradesh and Sikkim portions of a Rs 11,000-crore power transmission project in the Northeast.

India and China had last year clashed over the $60-million flood management project in Arunachal Pradesh, which was funded by the Asian Development Bank.

China had threatened to block ADB’s lending programme to India if all mention of Arunachal was not deleted from ADB's project documents for India.

Top officials in both the World Bank and the government said India had decided against seeking any loans from the World Bank for the Arunachal and Sikkim portions of a power transmission project that would link up the Northeast with the rest of the country’s power grid.

Though India had earlier denied reports that it would not place any project related to Arunachal Pradesh before the World Bank, officials said the government had decided against upsetting the Chinese at a time when India and China were trying to work together at the G20 and BRIC forums.

China claims that Tawang, a mountainous part of northern Arunachal Pradesh, has historically been part of Tibet and so should belong to China, which invaded Tibet in 1951. The Indian government and the Tibetan leaders in exile, however, point out that a self-governing Tibet had signed a treaty with British India in the early 20th century ceding Tawang to British-ruled India.

China has in the past made similar claims on Sikkim and Ladakh. China’s People’s Liberation Army has made repeated short incursions across the border in these areas.

World Bank officials say they have no problems funding projects in Arunachal Pradesh. However, India and China seemed to have decided to bilaterally discuss such issues and not bring up such projects for now, they added.

The hydel power generation potential of the Northeast and Bhutan is 58,000mw. Demand in this region is expected to peak at about 12,000mw. The region can, therefore, sell some 46,000mw.

The World Bank lent $9.3 billion between July 2009 and June 2010 to India. Spread across 25 new projects, the lending this year includes $2.6 billion as interest-free credits from the International Development Association and $6.7 billion in the form of long-term, low interest loans from the International Bank for Reconstruction and Development.

source:the telegraph