Report No.

34081-PK

Report No. 34081-PK

Pakistan
Country Water Resources Assistance Strategy
Water Economy: Running Dry

November 22, 2005

Agriculture and Rural Development Sector

South Asia Region

Pakistan
Country Water Resources Assistance Strategy
Document of the World Bank
Preface ............................................................................................................................... ..vi
Overview and Executive Summary ....................................................................................... vu..
I:The process followed ........................................................................................................... 1
I1. The Challenges and Achievements of the Past: .................................................................... 3
The challenges .............................................................................................................................. 3
The response - public infrastructure ........................................................................................... 7
The response - private infrastructure ....................................................................................... 12
The response - institutions ......................................................................................................... 16
.
I11 The Challenges of the Present and the Necessary Responses ............................................. 22
Adjusting to the needs of a changing Pakistan .......................................................................... 22
Preparing for climate change..................................................................................................... 25
Adapting to scarcity: An imminent water gap ....................................................................... 28
Getting more product per drop: The performance gap ....................................................... 30
Narrowing the trust gap ......................................................................................................... 36
Maintaining the resource base -- groundwater ......................................................................... 39
Maintaining the resource base - salinity management ............................................................ 45
Reversing large scale environmental degradation ..................................................................... 50
L i v i n g with floods ....................................................................................................................... 55
Renewing existing infrastructure: Addressing the maintenance gap .................................... 58
Investing in priority new infrastructure .................................................................................... 60
IV: What needs to be done .................................................................................................... 69
Principles for a modern institutional structure ......................................................................... 69
Instruments ................................................................................................................................ 70
Unbundling and Competition .........................

................................................................................................................... 75

Knowledge ............................................
.......................................... 81
What this means for Federal and Provincial Governments ...................................................... 83
V: Principled pragmatism and rules for reformers ............................................................. 86
Rule # 1: Water is different .......................................................................... 86
Rule # 2: Initiate reform where there is a powerful need and demonstrated demand for change 87
Rule #3: Involve those affected. and address their concerns with understandable information ... 88
Rule #4: Reform is dialectic. not mechanical .................................................................... . 89

11
 Rule # 5: Its implementation, stupid ...... 89
Rule #6: Develop a sequenced,prioritized list of reforms .................................................................. 89
Rule #7: Be patient and persistent ......................................................................................................... 90
Rule #8: Pick the low-hanging fruit first - nothing succeeds like success ....................................... 90
Rule #9: Keep your eye on the ball - don t allow the best to become the e
Rule #I0: There are no silver bulle ....................
Rule #II: Dont throw the baby ou
Rule #12: Reforms must provide returns for the politicians who are willing to make changes .... 91
VI: The Evolving Role o f the World Bank ............................................................................ 93
What the Bank has done in the past .......................................................................................... 93
Water Resources and Irrigation .............................................................................................................. 93
Hydropower.............................................
Water Supply and Sanitation
The Banks new Water Strategy ............................................................................................... 108
An indicative World Bank water investment program for 2006-2010: ................................... 109
Thefour pillars ......................................................................................................................................... 109
The investment projects ..............................
Evolving priorities and the indicative Ba
Endnotes........ ..................................................................................................................... 117

Tables

Table-1 Wastewater Treatment in the Cities o f Pakistan ............................................................... 53

Table-2 Bank Assistance During 1960-1970.................................................................................. 94
Table-3 Bank Assistance During 1971-1980................................................................................ 120
Table-4 Bank Assistance During 1981-1990................................................................................ 121
Table-5 Bank Assistance During 1991-2000................................................................................ 126

Figures

Figure-S1 Pakistan from Space .......................................................................................................... vii

Figure-S2 The Indus Waters Treaty 1960 ......................................................................................... .vii
Figure43 Rates o f Return on Investment on Infrastructure and Management o f Water Resources .vii
Figure-S4 Worlds most Water-stressed Countries ..........................................................................
...
.vi11
Figure-S5 Per Capita Availability of Water in Pakistan (Cubic Meters Per Capita Per Year) ...........i x
Figure436 Annual Canal Diversions and Escapages to the Sea ....................................................... ix
Figure-S7 The Quality (Chemical Oxygen Demand) o f Urban Streams ............................................. x
Figure438 Predicated Changes in Indus Flows just above Tarbela ..................................................... x i
Figure439 Storage Per Capita in Different Semi-Arid Countries ..................................................... ..xii
Figure-S10 Days o f Average Flow which Reservoirs in Semi-Arid Countries can Store
in Different Basins ........................................................................................................... .xii
Figure-S11 Storage-Additional Yield Curve for the Indus ................................................................. xiii
...
Figure-S12 Sedimentation and Storage Capacity................................................................................ xiii
...
Figure-S13 Wheat Yields Per Unit o f Landwater ............................................................................. xiii
...
Figure414 Crop Production and Drought .......................................................................................... xiv
Figure-S15 Benefits from Tarbela 1975-1998 ..................................................................................... xv
Figure-S16 The Effect o f Bhakra Dam on Different Social Groups .................................................... xv

...
111
Figure-S 17 The Development o f Economically-feasible Hydropower Potential in Pakistan
in International Context.................................................................................................... xvi
Figure-S 18 The Global Poll Results for South Asia ......................................................................... xx
Figure-S 19 World Bank Lending to Pakistan for Water - Past and Prospective................................ xxi
Figure-1 The Water CAS Process ...................................................................................................... 1
Figure-2 Worlds Most Water-Stressed Countries ............................................................................. 3
Figure-3 Per Capita Availability o f Water in Pakistan (Cubic Meters Per Capita Per Year) ............3
Figure-4 Indus Basin Irrigation System ............................................................................................. 4
Figure-5 A Typical Canal Command in the Indus System ................................................................ 5
Figure-6 Flood Losses in Pakistan..................................................................................................... 5
Figure-7 The Indus Water Canal System at Partition in 1947 ........................................................... 6
Figure- 8 Groundwater Levels ............................................................................................................ 7
Figure-9 The Indus Waters Treaty o f 1960........................................................................................ 8
Figure- 10 Benefits from Tarbela 1975-1998 ....................................................................................... 9
Figure- 11 Average Number o f Employment o f Adult Casual Laborers ........................................... 10
Figure-12 The Effect o f Irrigation and Green Revolution on Income ............................................... 10
Figure-13 The Effect o f Bhakra Dam on Different Social Groups .................................................... 11
Figure- 14 Income Gains from Directly and Indirectly Impacted Sectors-Bhakra Dam .................... 11
Figure- 15 Groundwater Levels 1860-1960........................................................................................ 13
Figure- 16 Irrigation Expansion and Groundwater Levels ................................................................. 13
Figure- 17 Growth o f Tubewells ......................................................................................................... 15
Figure- 18 Quantities and Values o f Irrigation Supplies in Punjab by Source ................................... 15
Figure-19 Rates of Return on Investment on Infrastructure and Management o f Water Resources . -18
Figure-20 Employment Generation by Crop ..................................................................................... 23
Figure-2 1 Population Growth in Pakistan.......................................................................................... 24
Figure-22 Urban Population Growth in Absolute Numbers .............................................................. 24
Figure-23 Proportion o f GDP in Manufacturing................................................................................ 24
Figure-24 Prevalence o f Poverty in Pakistan..................................................................................... 24
Figure-25 Accumulated Effects o f Deglaciation on Indus River Flows ........................................... 26
Figure-26 Change in South Asia Summer Rainfall Predicted by Nine General
Circulation Climate Models .............................................................................................. 26
Figure-27 Predicted Change in Number o f Rainy Days .................................................................... 27
Figure-28 Predicted Change in Rainfall intensity .............................................................................. 27
Figure-29 Annual Canal Diversions and Escapages to the Sea ...................................................... 29
Figure-30 Projected Demand for Water ............................................................................................. 29
Figure-3 1 Wheat Yields Per Unit o f Land and Water ....................................................................... 30
Figure-32 Drought Effect on Yields .................................................................................................. 30
Figure-33 Crop Production and Drought ........................................................................................... 31
Figure-34 Crop Yields for Head and Tail-Enders .............................................................................. 31
Figure-35 Returns to Irrigation Location in a Canal .......................................................................... 31
Figure-36 Differences in Wheat Yields Across Distributaries in the Pakistani and Indian Punjabs . 32
Figure-37 Yield and Water Productivity o f Wheat under Different Irrigation
Scheduling Strategies ........................................................................................................ 32
Figure-38 Production (kg/cubic Meter o f Water) under Different Agricultural Practices.................34
Figure-39 Cubic Meters o f Water to Produce a ton o f Produce......................................................... 35
Figure-40 Punjab Canal Entitlements from the 1991 Water Accord ................................................. 39
Figure-4 1 Irrigation Expansion and Groundwater Levels ................................................................. 39
Figure-42 The Growing Role o f Groundwater Irrigation .................................................................. 40
Figure-43 Punjab Water Balance: Normal Year (MAF) .................................................................... 40
Figure-44 Punjab Water Balance: Drought Year (MAF) ................................................................... 40

iv
Figure-45 Declining Groundwater Table in Punjab........................................................................... 4 1
Figure-46 Effect o f the Depth of the Water Table on ........................................................................ 41
Figure-47 Depth to Water Table by Province .................................................................................... 41
Figure-48 Arsenic in Groundwater in Punjab .................................................................................... 44
Figure-49 Arsenic in Groundwater in Sindh...................................................................................... 44
Figure-50 Long-Term Trends of Water-logging................................................................................ 46
Figure-51 Salinity Levels by Province .............................................................................................. 47
Figure-52 Canal Diversions and Water-logging in Sindh.................................................................. 47
Figure-53 Salt Balance in the Indus Basin ........................................................................................ 48
Figure-54 Pakistans Wetland Resources .......................................................................................... 51
Figure-55 The Quality (Biochemical Oxygen Demand) o f Urban Streams ...................................... 53
Figure-56 The Quality (Chemical Oxygen Demand) o f Urban Streams ........................................... 54
Figure-57 The Kuznets Curve for Environmental Quality ............................................................. 55
Figure-58 Flood Losses in Pakistan................................................................................................... 56
Figure-59 The Financing o f Water Services in Pakistan ................................................................... 59
Figure-60 Depleting Pakistans Infrastructure Stock ......................................................................... 60
Figure-61 Storage Per Capita in Different Semi-Arid Countries ....................................................... 61
Figure-62 Days of Average Flow which Reservoirs in Semi-Arid Countries can Store
In Different Basins ............................................................................................................ 61
Figure-63 Sedimentation and Storage Capacity................................................................................. 62
Figure-64 Storage-additionalYield Curve for the Indus ................................................................... 62
Figure-65 Benefits from Basha and Kalabagh................................................................................... 62
Figure-66 Economically-FeasibleHydropower potential in Pakistan in International Context ........63
Figure-67 Environmental and Social Indicators for Some Multipurpose Dams ................................ 63
Figure-69 Who Benefits from New Indus Storage?........................................................................... 64
Figure-70 Urban Water Supply Coverage ......................................................................................... 67
Figure-71 Rural Water Supply Coverage by Province ...................................................................... 67
Figure-72 Rural Water Supply Coverage (Improved Water Supply) ................................................ 67
Figure-73 Improved Sanitation Coverage .......................................................................................... 67
Figure-74 The Desired Evolution o f Functions and Actors ............................................................... 69
Figure-75 The Basis for Sound Irrigation Service Provision............................................................. 70
Figure-76 Typical Public and Private Roles in the Provision o f Infrastructure ................................ 72
Figure-77 Participants in Modern Regulation.................................................................................... 74
Figure-78 Timetable for Implementationo f a Formal Water Entitlement System............................ 78
Figure-79 Systems Models for Planning and Management ............................................................... 81
Figure-80 From Low-level to High-level Equilibrium in Conakry ................................................... 82
Figure-81 World Bank Lending to Pakistan for Water-related Sectors 1952-2004........................... 95
Figure-82 Household Income o f Families at Ghazi Barotha Hydropower Project
Before and After Resettlement ....................................................................................... 105
Figure-8 3 The Global Poll Results for South Asia ....................................................................... 109
Figure-84 World Bank Lending to Pakistan for Water-related Sectors - Past and Prospective ......110

Boxes

Box-1 The Water Accord o f 1991................................................................................................ 20

Box-2 How other distortions Affect the Water Economy .The Case o f Sugar-Cane .................35
Box-3 The Indus River System Authority (1992) ........................................................................ 37
Box-4 Public Information on Kalabagh Dam (an extract) ........................................................... 65
Box-5 Water Entitlement are the Principal Mechanism for Ensuring Efficiency.
Sustainability and Voluntary Reallocation o f Water ......................................................... 76

V
 R ..
T h i s report i s the product of q h t e e n months o f intensive work by Bank staff and an eminent group of Pakistani
and foregn consultants. T h e Bank team consisted ofJohn Briscoe and Usman Qamar pask Team Leaders),
Manuel Contijoch (SASAR); Don Blackmore (Consultant (former Chief Executive Murray Darlu-~g
Commission)) and Pervaiz Amir. T h e report benefitedgreatly from formal reviews and comments by external
reviewers (David Seckler, RichardReidtnger, Chris Perry, Saeed Rana, Shams ulML& Frankvan Steenbergen,
Karin Asmd Siegman, Asif Kau, Khahd Mohtadullah,Bert Smedema, Shamshad Gohar, ShahidaJ@ and M.
N.Bhutta) and World Bank staff (KeithPitman, MasoodAhmad, Abid Hasan, Shahzad Sharjeel, D a l e
Lautenbach, Vlado Vuceiic, Adolfo Brizzi, Xiaokai Li and Alain Locussol).

T h e report has been reviewedby senior officials from the M i n i s t r y of Water and Power, the Plantllng
Commission,the Economic Affairs Division, the Provinces and WAPDA. Written comments were received
from these agencies.

T h e report has been reviewed in detail by World Bank management and t h e revisedversion endorsed by it. A
final round o f consultations was held in September 2005 with the multi-stakeholdergroup, includmgthose who
had advised during t h e early stages of t h i s work.

As usual, not all reviewers agreedwith all that i s written in the report (nor did the authors agree with all that was
suggestedby the reviewers!). T h e product i s entirely the responsibilityof the authors and should not be
amibuted to the reviewers.

vi
Pakistan i s o n e of t h e worlds most a r i d countries, with a n average
rainfall o f u n d e r 240 mm a year. T h e p o p u l a t i o n a n d the economy
are heavily dependent on a n annual influx into the Indus river system
(including t h e Indus, Jhelum, Chenab Ravi, Beas a n d Sutlej rivers) o f
about 180 billion cubic meters o f water, that emanates from the
n e i g h b o r i n g countries a n d i s m o s t l y derived from snow-melt in the
Himalayas. Throughout history, people have adapted to the low a n d
poorly distributed rainfall by either living along river banks or by
careful h u s b a n d i n g a n d management of local water resources. O n e
o f t h e greatest o f h u m a n civilizations - the I n d u s Valley civilization
(Harrapa a n d M o h e n j o D a r o ) - flourished along the banks o f the
Indus.

T h i s precarious, l o w - l e v e l balance b e t w e e n m a n a n d water was

decisively shifted with the advent o f large-scale i r r i g a t i o n technology Figure 51:
Pakistan from space
in the 19th century. T h e Indus i r r i g a t i o n system became the largest
contiguous i r r i g a t i o n system in t h e world. As shown in Figure S1, t h e desert literally bloomed, with
irrigated agriculture providing t h e p l a t f o r m for the development o f t h e m o d e r n e c o n o m y o f Pakistan.
This hydraulic e c o n o m y has faced a n d surmounted three massive challcm g e s in the last h a l f century.

T h e f i r s t challenge arose because the lines o f p a r t i t i o n o f

the I n d o - P a k sub-continent severed the irrigated
heartland of P u n j a b from t h e life-giving waters o f the
Ravi, Beas a n d Sutlej rivers. In a n unprecedented
triumph o f water diplomacy, Pakistani engineers,
together with their I n d i a n counterparts a n d the World
Bank, negotiated t h e Indus Waters Treaty, giving
Pakistan rights in perpetuity to the waters o f the Indus,
Jhelum a n d Chenab rivers, w h i c h comprise 75% o f the
flow of the w h o l e I n d u s system.

T h e second challenge was that there was now a m i s -

m a t c h between the l o c a t i o n o f Pakistans water (in t h e Figure 52: The Indus Water Treaty of 1960
western rivers) a n d the m a j o r irrigated area in the east.

Tarbela on the Indus, a n d link canals, w h i c h r a n for

hundreds o f miles a n d carried f l o w s t e n times the flow
of the Thames River. (Figure S2) To a considerable
degree (but not completely) t h e heroic stage o f water
engineering in Pakistan was now o v e r - as in o t h e r
countries the m a j o r challenges were now those o f
management, This i s t h e case in a l l countries (see F i g u r e
S3). But in the case o f Pakistan, however, t h e heroic
era h a d i n v o l v e d particularly blunt a f f r o n t s to t h e living
organism that the r i v e r represents. T h e natural flow
regime was dramatically altered: rivers w h i c h h a d
previously meandered o v e r w i d e plains were now
Figure 53: Rates o f return on investment on
c o n f i n e d within n a r r o w channels, sediments w h i c h h a d infrastructure and management of water resources

vii
previously nourished the delta were trapped, vast quantities o f water were disgorged onto deserts,
substantial parts o f which were o f oceanic origin and highly saline. I t was t h i s last reality which gave
rise to the third major challenge facing Pakistan shortly after Independence. Hundreds o f billions o f
cubic meters o f water were now stored in the naturally-deep aquifers o f Punjab alone. In many areas
water tables had reached the level o f t h e land, giving rise to the twin curse o f waterlogging and salinity.
I n the early 1960s, i t appeared that Pakistan was doomed, ironically, to a watery, salty grave.

With equal doses o f good thinking, good planning and good luck, this problem i s now not beaten (nor
will i t ever be) but controlled and managed, to a degree that no one foresaw fifty years ago. The good
thinking was the application o f water science and economics by many o f Pakistans best and brightest
in conjunction with many o f the best water minds in the world. The solution was not the obvious
one o f lining canals and putting less water on the land but of increasing the use o f groundwater, thus
both increasing evapotranspiration, drawing down the groundwater table and leaching much o f the
salts down and out o f the root zone. The good thinking and good planningwere classic public
goods. The good luck driver o f this revolution was the modest but transforming tubewell and
diesel engine, bought and managed by millions o f farmers for t h e simple reason that t h i s decentralized
on-demand source o f water enabled them to greatly increase their crop yields and incomes,

So the modern history o f water development and management in Pakistan i s one in which the glass
can b e seen as more than half full. But, as this Report will show, the glass can also be viewed as much
more than half empty too. Once again, the survival o f a modern and growing Pakistan i s threatened by
water.

The facts are stark.

Sobering Fact #1: Water Stress. Pakistan i s already one o f the most water-stressed countries in the
world ( Figure S4), a situation which i s going to degrade into outright water scarcity ( Figure S5) due to
high population growth.

Bar
Figure 54: One o f the worlds most water-stressed countries
YYW I IhlFP a m

...
Vlll
 I Figure 5 5 : Declining per capita availability of water
in Pakistan (cubic meters per capita per year)

S o b e r i n g Fact #2:
T h e r e i s no a d d i t i o n a l 200
1 Figure 1 Annual Canal Diversion and EscaPaIes to the Sea
w a t e r to b e i n j e c t e d
into t h e system. There
i s no feasible 1so

intervention w h i c h
would enable Pakistan to
-2
mobilize appreciably 100

m o r e water than it n o w j
uses. Arguably, as
s h o w n graphically in so
Figure S6, overall u s e for
irrigation needs t o
decline so that there are 0
1 5-76 1979-80 1983-84 1987.88 1991-92 1995-96 1999-00 2003-04
adequate flows i n t o the Years
degrading delta. IExisting Canal Diversion 0 Escapages to the Sea

Figure 56: Annual Canal Diversions and "Escapages t o t h e Sea"

S o b e r i n g F a c t #3: A Source:: World Bank 2CO3
high risk w a t e r
en%ronment. Pakistan's dependence on a single river system means i t has little o f the robustness that
most countries enjoy by virtue o f having a multiplicity o f river basins a n d diversity o f water resources.
W h i l e I n d i a (for example) might b e able t o muddle through because it has many rivers a n d if
something goes w r o n g in one place the effect i s cushioned b y opportunities in other places, t h i s i s a
luxury w h i c h Pakistan does n o t have. I f the water/sediment/salt system o f the Indus Basin goes
badly wrong, that's it. There i s n o latitude f o r error.

ix
Sobering Fact #4: Large-scale degradation of the resource base. T h e r e i s abundant evidence o f
wide-scale degradation o f the natural resource base on w h i c h the people o f Pakistan depend. Salinity
remains a m a j o r problem, with some
aspects partially controlled but others
- including the fate of the 4500

approximately 15 million tons o f s a l t 4000

w h i c h are accumulating in the Indus si00

Basin every year, a n d the ingress o f
COD 3n00
saline water into over-pumped
mg/l ZSDD
freshwater aquifers - remain only
dimly-understood threats. And the 2000

delta, deprived of the water and s i l t id00

w h i c h built a n d sustained it, i s (000

degrading rapidly, with large h u m a n 500

and environmental consequences.
Simultaneously, there i s large-scale
uncontrolled pollution o f surface a n d
groundwater from the increasing
quantities of pesticides a n d ferthzers
n
Urban streams in different cities
Figure 57: The quality (Chemical Oxygen Demand) of urban streams
Source: Zechariah 2005

used in agriculture a n d by rapidly

growing cities a n d industries. M a j o r cities have inadequate sewage treatment plants. M a n y are either
non-functional or working poorly. And there i s only one industrialc o m m o n effluent treatment plant
working in the w h o l e of the country. T h e result, as illustrated in Figure S7, i s the presence of heavily
degraded surface water a r o u n d all cities a n d towns.

Sobering Fact #5: Groundwater i s now being over-exploited in many areas, and i t s quality i s
deteriorating. O v e r the past 40 years, the exploitation o f groundwater, mostly by private farmers,
has brought enormous economic a n d environmental benefits. A laissez-faire approach c o u l d b e
appropriate during t h i s era. Groundwater now accounts for almost h a l f of all irrigation requirements.
Now, although, there i s clear evidence that groundwater i s being over-exploited, yet tens o f thousands
o f additional wells are b e i n g put into service every year. In the buruni areas o f Balochistan, farmers are
pumping from depths o f hundreds o f meters and in the sweet water areas o f the Indus Basin,
depletion i s now a fact in all canal commands. Furthermore, there are serious a n d growing problems
with groundwater quality, a reality that i s likely to get worse because there are 20 million tonnes o f salt
accumulating in the system every year. Pakistan has thus entered a n era in w h i c h laissez-faire becomes
a n enemy rather t h a n a friend. T h e r e i s a n urgent need to develop policies and approaches for
bringingwater withdrawals into balance with recharge, a difficult process w h i c h i s going to require
action by government a n d by i n f o r m e d a n d organized users. Since m u c h groundwater recharge in the
Indus Basin i s from canals, this requires a n integrated approach to surface and groundwater. There is
little evidence that government (or donors, including the World Bank) have re-engineered their
capacity a n d funding to deal with this great challenge. And here delay i s fatal, because the longer i t
takes to develop such actions, t h e greater would become the d e p t h of the groundwater table, and the
higher would b e the costs o f the equilibrium solution.

Sobering Fact #G: Flooding and drainage problems are going to get worse, especially in the
lower Indus Basin. T h e natural state o f heavily-silt laden rivers (like t h e Indus) i s to meander. This
is because as s i l t builds up in their beds, the rivers seek l o w e r lands a n d change their courses. This
creates havoc with h u m a n settlements a n d so, throughout the world, such rivers have been trained a n d
confined by embankments within relatively n a r r o w beds. But as with everything watery, solving one
p r o b l e m gives rise to another. In t h i s case, the b e d keeps getting higher a n d higher, a n d soon the river
is, as in the lower parts o f Sindh, above the level o f the land. (To some degree the trapping o f s i l t in
upstream reservoirs alleviates this particular environmental hazard.) O v e r time, the likelihood o f

X
embankment breaching increases, as do the problems of drainage from flooded lands. W h e n this
coincides with unfavorable tidal conditions, the consequences can b e disastrous.

Sobering Fact #7: Climate change.

T h e I n d u s basin depends heavily on the
glaciers o f t h e western Himalayas w h i c h lndus at Bisham QIla
act as a reservoir, capturing snow a n d 100
rain, holding the water a n d releasing i t
into the rivers w h i c h feed the plain. I t
i s now clear that climate change i s
already affecting these western glaciers
in a dramatic fashion (far m o r e
seriously, for example, t h a n in t h e

:::
damper Eastern Himalayas). W h i l e the
science i s s t i l l in i t s infancy, best
estimates (Figure S8) are that there will
b e fifty years of glacial retreat, during -100
w h i c h t i m e river flows will increase. Figure 58: Predicted changes in Indus flows just above Tarbela
This - especially in combination with
t h e predicted flashier rainfall -- i s likely
to exacerbate the already serious problems o f flooding a n d draining, especially in t h e l o w e r parts o f t h e
basin, in the n e x t f e w decades. But t h e n the glacial reservoirs will b e empty, a n d there are likely to b e
dramatic decreases in river flows- as shown in Figure S8, conceivably by a terrifying 30% to 40% in
t h e Indus basin in one h u n d r e d years time.

Sobering Fact #8: An inadequate knowledge base. T h e Indus Basin i s a single, massive, highly
c o m p l e x interconnected ecosystem, upon w h i c h m a n has l e f t a huge footprint. W h e n a d a m or
barrage i s constructed the water and sediment cycles are changed dramatically. W h e n water i s diverted
onto deserts, t h e water a n d s a l t balances seek n e w equilibriums. I n a system so massive a n d complex,
t h e generation a n d smart use o f knowledge are the keys to adaptive management. But there has b e e n
very little investment in Pakistan in building this knowledge base a n d the accompanying institutional
a n d h u m a n systems. T h e past t w e n t y years should have b e e n ones o f massive investment in
knowledge about this ecosystem. But the reverse has happened, a n d even the once-renowned Pakistan
water p l a n n i n g capability has fallen into disrepair, T h e c o u n t r y i s literally flying blind into a very
hazardous future.

Sobering Fact #9: M u c h of the water infrastructure i s in poor repair. Pakistan i s extraordinarily
dependent on i t s water infrastructure, a n d it has invested in i t massively. D u e to a c o m b i n a t i o n o f age
a n d w h a t has aptly been called the Build/Neglect/Rebuild philosophy of public works, m u c h o f t h e
infrastructure i s crumbling. This i s true even for some o f the m a j o r barrages, w h i c h serve millions o f
hectares a n d where failure would b e catastrophic. T h e r e i s no m o d e r n Asset Management P l a n for any
of t h e m a j o r infrastructure.

Sobering Fact #lo: T h e quality of project implementation i s poor. Pakistan i s justifiably proud
o f i t s outstanding achievement in building the I n d u s Basin Replacement Works. I n t h e intervening
years, t h e quality o f project i m p l e m e n t a t i o n has declined substantially. Today, i m p l e m e n t a t i o n o f
water sector projects in Pakistan i s characterized by inefficiencies, c o m p l e t i o n delays a n d t i m e a n d cost
overruns. Factors that affect i m p l e m e n t a t i o n include: weak i m p l e m e n t a t i o n p l a n n i n g a n d management,
litigation related to l a n d acquisition, non-compliance with agreed resettlement a n d rehabilitation
programs, lack o f attention to environmental issues, delays in procurement, delays in preparation o f
accounts and carrying out audits, a n d t h e lack o f preparation for transition from construction to
operations.

xi
Sobering Fact #11: T h e system i s not financially sustainable. There are three basic questions
relevant to the financing o f infrastructure -who pays? how m u c h i s paid?a n d how i s t h e m o n e y used?
In terms of who pays, there are m a n y reasons why a substantial portion o f the costs o f public works
w h i c h provide individual services (such as irrigation water) should b e p a i d for by those who get the
service. But in Pakistan users o f canal water pay a very small part o f the bill, w h i c h i s basically paid by
the taxpayer. I n terms o f how m u c h is paid, the answer is: m u c h less t h a n the presently configured
institutions require for rehabilitation a n d maintenance o f the assets a n d for operations. T h e result is
that most infrastructure i s in poor repair. I n terms o f how i s the m o n e y used the answer i s that first
call i s for payment o f heavily overstaffed bureaucracies, whose productivity i s low a n d whose appetite
leaves insufficient funds for system maintenance a n d operation. This reality gives rise to a vicious
circle, in w h i c h users are not willing to pay for poor a n d unaccountable services, w h i c h means that
insufficient funds are available for operations a n d maintenance, w h i c h results in the decline o f service
quality a n d whereupon users are even less willing to pay., ,.

Sobering Fact #12:

Pakistan has to invest, and
invest soon, in costly and cubic meters per
contentious new large capita
dams. W h e n river flow i s 6000
variable, then storage i s 5000
required so that the supply o f 4000
water can m o r e closely 3000
m a t c h water demands. 2000
Relative to other arid
1000
countries, Pakistan has very
little water storage capacity. 0
Figure S9 shows that
whereas the U n i t e d States
a n d Australia have over
5,000 cubic meters of storage
capacity per inhabitant, a n d Figure S9: Storage per capita in different semi-arid countries
China has 2,200 cubic Source: World Bank analysis of ICOLD doto
meters, Pakistan has only 150
cubic meters o f storage
capacity per capita. And
Figure S10 shows the storage
capacity avadable in some of
the m a j o r arid basins in the
world. T h e dams o f the
Colorado a n d Murray-
D a r l i n g Rivers can hold 900
days o f river runoff. South
A f r i c a can store 500 days in
i t s Orange River, a n d I n d i a
between 120 and 220 days in
i t s m a j o r peninsular rivers.
By contrast, Pakistan can
barely store 30 days o f water
in the Indus basin.
Figure S10: Days of average flow which reservoirs in
semi-arid countries can store in different basins
Source: World Bonk owlysis of
ICOLD and GDRC data

xii
As shown in Figure - S11, each m i l l i o n acre feet I
(MAF) o f storage capacity lost means one

i
Additional yield in MAFIysar
M A F / y e a r less water that can b e supplied with a 25

given level o f reliability. And, as shown in *,

Figure S12, there i s an urgent need for storage
j u s t t o replace the capacity that has (as ;torage
predicted) been lost t o sedimentation. G i v e n level I
the high s i l t loads f r o m the young Himalayas, ~

Pakistan's t w o large reservoirs are (as predicted 0 10 20 30 40

at design) silting relatively rapidly. Storage MAF

S o b e r i n g F a c t #13: Poor g o v e r n a n c e and Figure 511: Storageadditional yield curve for the Indus
low trust. Conceptually the simplest task f o r
water managers in the Indus Basin i s t o m o v e
water in a predictable, timely manner to those
w h o need It and have a right to it.
Pakistan has among the best
water engineers in the world.
And yet this task i s done less and
less satisfactorily, less in t h e light
of day and m o r e b e h i n d an
opaque curtain in which, as
always, m o n o p o l y + d s c r e t i o n -
accountability = corruption. T h e
result i s inequitable distribution
o f water, p o o r technical
performance and a pervasive
environment o f mistrust and
conflict, f r o m the provincial level
t o the water course. T h e water
1985 1995 2005 2015
bureaucracy has yet t o make the
vital mental transition (depicted Figure 512: Sedimentation and storage capacity

:
Source World Bonk 2003
I
in Figure S3) f r o m that o f
builder to that o f manager.

S o b e r i n g F a c t #14: W a t e r
I 8 1 I 1.2

tl
productivity i s low. Large parts
o f Pakistan have g o o d soils, 10 Tonsha yield + kglm3 1
abundant sunshine and excellent
farmers. And yet crop yields, b o t h 0.8 4

jil:
E
per hectare and per cubic meter o f
water, are m u c h lower than
international benchmarks, and
3
0.6

0.4
-a
m u c h lower e v e n than in 2
0.2
neighboring areas o f I n d i a (Figure 01
S13). The quality o f water service 0
plays an important role in this:
yields from reliable, self-provided
groundwater are twice those o f
I Imperial Valley, USA Bhakra, India Punjab, Pakistan

Figure 513: Wheat yields per unit o f land and water

unreliable and inflexible canal 9 w c e : A h r o d 2035
supplies.

xiii
I n water matters, the cup i s always h a l f empty, but it i s also half, or, in the case o f Pakistan, at least a
quarter, full. I n c o n f r o n t i n g these awesome challenges, Pakistan has considerable strengths, too.

Hopeful Fact #1: A well-established tradition and system of water entitlements. Pakistan has
a n unusually long- and well-established tradition o f water entitlements. At the international level,
Pakistan's rights to water from the Indus Basin system are unambiguously defined in the Indus Waters
Treaty. T h e 1991 Water A c c o r d i s a major achievement, w h i c h establishes clear entitlements for each
province to surface waters. I m p l i c i t in the Water Accord, too, i s a set o f water entitlements at the
canal c o m m a n d level (established on the basis o f historic use). In large areas o f the system, these
entitlements serve as the basis for allocation o f water a m o n g canal commands. There are also well-
established rules for further distributingwater to the distributary and outlet levels. B e l o w the outlets,
the warabandi i s a proxy (appropriate in i t s era) to a water right, in w h i c h a farmer has a right to time, a
surrogate for water. T h e existence of such well-established entitlements means that Pakistan can now
focus on: putting in place a similar system for the surface systems that do not currently have such
established entitlements; extending the entitlement system to cover any n e w water that might b e
mobilized; formalizing entitlements for environmental flows (including to the delta); a n d moving
towards a similar definition of entitlements for groundwater, and, above all, administering t h i s system
in a m o r e transparent, participatory manner.

Hopeful Fact #2: Pakistan has largely avoided the trap of subsidizing electricity for
groundwater pumping. O n e o f the obvious ways governments a r o u n d the world address the
p r o b l e m of agricultural distress i s to subsidize inputs. I n m a n y countries, electricity for irrigation
pumping i s heavily subsidized. This policy greatly exacerbates the underlying problem, w h i c h i s
m a k i n g sure that groundwater pumping does not exceed recharge, a n d that the water table i s not too
deep. To date, this policy has been followed only in Balochistan, with disastrous effects both on the
water table and on the financial state o f the utility, a n d for pumping from public wells in Sindh. At
present, the political pressure for "free power" has been m u t e d because the water table i s shallow a n d
most pumps are diesel powered. T h e Federal and Provincial governments should b e applauded for
their stance to date and should continue to strongly resist pressures to m o v e towards free p o w e r for
irrigation in the future.

Hopeful Fact #3: There i s

much scope for increasing
water productivity. T h e
flip side o f current low water
productivity i s that Pakistan
can get m u c h m o r e p r o d u c t
- crop, jobs and i n c o m e -
per drop o f water. As
shown in Figure S14,
reduced water supplies in the
irrigated areas have little
detrimental impact on
p r o d u c t i o n (at least in the
short run), in p a r t because
groundwater i s available to
make up the difference in the
short run, in part because
waterlogging and s a l i n i t y are
reduced, and in p a r t because
Figure 514: Crop production and drought Source: World Bonk 2003
l i m i t e d water supplies are

xiv
used m o r e carefully w h e n there are shortages. But the bottom line i s that this shows that i t i s quite
possible to substantially increase p r o d u c t i o n with existing supplies o f water. A second, very
important, factor i s the emergence o f a n e w class o f progressive farmers, who are shifting to high-value
crops (which produce far m o r e i n c o m e a n d jobs p e r unit o f water), introducing n e w crops and
agricultural technologies, a n d putting unprecedented pressures on the irrigation departments to
become m o r e accountable a n d efficient.

H o p e f u l fact #4: High

returns from previous
major water ~ Power Irrigation ~

infrastructure. Pakistan
benefited immensely from 3500
the m a j o r water 1
infrastructure built in the e 3000
Indus Basin. As shown in 3 2500
Figure S15, the benefits 2000
from Tarbela substantially r
e 1500
= 1000
''
exceeded those w h i c h were 0
p r e d c t e d at the time of
construction. Through 500
f o r w a r d a n d backward 0
linkages in the economy, Predicted Actual
the total benefits were
probably about twice those Figure 515: Benefits f rom Tarbela 1975-1998
o f the direct p o w e r a n d
source: WCD 2000
irrigation benefits. I t i s
also certain that, as has
been s h o w n for the
Bhakra project in
I n d i a n Punjab ( Figure YOchange of Income of Different Types of Households With
S15), it was the poor and Without Bhakra Dam
who, through the 80
operation o f labor
markets, were 60
probably the greatest
beneficiaries o f these
investments. I t i s
40
i m p o r t a n t to note that
although m u c h of the 20
discussion o f such
projects i s in terms o f 0
agriculture, in fact i t i s Landowners Agr Labor Rural Non Agr Rural Others Urban
the p o w e r benefits
w h i c h are o f t e n
greatest (Figure S15). Figure 516: The effect o f Bhakra Dam on different social groups
And here, too, as
shown in Figure S17, Source: Bhatia. 2005
Pakistan lags behind
i t s neighbors - 86% o f
the 56000 mw o f Pakistan's economically-viable h y d r o p o w e r potential has yet to b e developed.

xv
 100%
90%
80%
70%
:apan Europe North
America
60%
50%
40%
30%
20%

0 1000 2000 3000 4000

Figure 517: The development of economically-feasible

hydropower potential in Pakistan in international context
Source: World Bank 2003

H o p e f u l Fact #5: P a k i s t a n h a s o v e r c o m e major w a t e r c h a l l e n g e s in t h e past. Pakistan has a

remarkable history o f successfully c o n f r o n t i n g m a j o r water challenges. I t has enormous h u m a n
capacity to c o n f r o n t this n e x t round o f challenges, w h i c h can b e p o o l e d in four m a j o r categories.

T h e sustainable management o f a huge, inter-linked a n d very complex

natural resource base i s probably the single m o s t challenging long-term
task for Pakistan a n d requires the development o f world-class capacity in
three related areas. First are the natural sciences. Adaptive management
o f the Indus Basin system requires high levels o f knowledge and
understanding o f a series o f l i n k e d basic natural processes, the m o r e
i m p o r t a n t o f w h i c h include: the behavior o f the glaciers as climate
change proceeds; the fate of the large amounts o f salt b e i n g mobilized;
the qualitative a n d quantitative dimensions o f the aquifer systems in the Indus B a s i n a n d in the other
parts o f the country; the evolution a n d behavior o f the ecosystems o f the delta; a n d the impact o f
changed sediment loads on river morphology. Second are the engineering sciences. T h e plumbing for
the world's largest contiguous irrigation system has underpinned m u c h of Pakistan's development.
Pakistan has long been a world leader in hydraulic engineering, a n d i t i s going to have to renew this
capacity so that a n e w generation can maintain a n d modernize the water transmission a n d distribution
systems. T h e third l e g o f the intellectual stool are the social sciences. Because at the e n d o f the day
government i s going to have to design institutions a n d instruments, w h i c h will ensure that the actions
o f the millions o f people who live in a n d o f f o f the natural a n d engineered water systems are in
consonance with the requirements o f those systems. Pakistan, accordmgly, needs to build a strong
natural, engineering a n d social scientific cadre capable o f working with all users in defining the
problem, developing solutions, monitoring, assessing a n d adjusting. T h i s i s a capacity w h i c h requires a
w i d e range o f disciplines - those necessary for understanding climate, river geomorphology, hydraulic

xvi
structures, surface a n d groundwater hydrology, limnology, water chemistry, sediment management,
hydraulics, soil sciences, terrestrial a n d coastal ecosystems, agronomy, plant physiology, industrial
organization, c o n f l i c t management, politics, economics a n d financing. In the past Pakistan has relied
heavily on outside knowledge, especially in sciences. Now Pakistan needs to develop i t s indigenous
capacity a n d m a k e a m a j o r push to establish a n d n u r t u r e a n e w set o f institutions t h a t will p r o v i d e t h e
scientific, technical a n d p o l i c y support for the management o f increasingly scarce water. Experience in
o t h e r countries shows that i f this i s not d o n e there will b e serious economic, social a n d e n v i r o n m e n t a l
consequences.

T h e water e c o n o m y o f Pakistan depends fundamentally on a gigantic a n d

complex hydraulic infrastructure system. T h e r e are now a set o f related
challenges w h i c h have to b e addressed - how to m a i n t a i n w h a t has b e e n
built, w h a t m a j o r n e w system-wide infrastructure needs to b e built, w h a t
infrastructure needs to b e built for populations who have not b e e n served
a n d for environmental protection, a n d how to build institutions that will
manage the resource effectively in the looming era o f scarcity. First i s
rehabilitation a n d maintenance. M a n y elements o f the vast hydraulic
system are now reaching the e n d o f their design lives, a n d h a v e to b e
rebuilt. T h e r e i s a n enormous backlog o f deferred maintenance. Most recent i r r i g a t i o n a n d water
supply investments from donors, i n c l u d i n g the World Bank, have b e e n for the rehabilitation o f
poorly maintained systems. T h e r e is n o systematic Asset Management P l a n at either t h e Federal or
P r o v i n c i a l level w h i c h describes the c o n d i t i o n o f t h e assets, the requirements for replacement,
rehabilitation (or retirement) a n d operations a n d maintenance a n d the associated costs, a n d the
proposals for financing o f these costs. D e v e l o p m e n t o f such plans i s a high priority.

Second i s the u r g e n t n e e d for construction o f m a j o r n e w storage on t h e Indus. T h e r e i s p r o b a b l y no

m o r e contentious a n issue in Pakistan today. I n part, this i s for legitimate a n d necessary reasons (such
as t h e resettlement o f substantial numbers o f people), partially for legitimate but resolvable reasons
(lack o f transparency a b o u t how this would affect the actual allocation o f waters a m o n g the provinces
a n d to t h e delta) a n d partially the discussion o f dams has b e c o m e a vehicle for a h o s t o f remotely- or
un-related political grievances. A curiosity i s t h a t t h e most vehement opposition to n e w dams comes
from Sindh, w h e n in fact i t i s the downstream riparian who i s typically the greatest beneficiary o f the
enhanced regulation w h i c h comes with n e w storage. (For t h i s reason, in o t h e r countries l o w e r
riparians will o f t e n p a y for upstream storage.) T h e requirements for g o v e r n m e n t are o b v i o u s - there
needs to b e a totally transparent a n d verifiable i m p l e m e n t a t i o n o f t h e 1991 W a t e r A c c o r d , a n d
reasonable quantities o f water need to b e guaranteed a n d delivered to t h e delta (as was discussed as
p a r t o f t h e Indus T r e a t y negotiations). E q u a l l y i m p o r t a n t i s a well-designed p l a n for paying for the
costs o f this storage, with t h e v e r y large h y d r o p o w e r p o t e n t i a l o f f e r i n g possibilities for raising
substantial amounts o f private financing.

Third, there are needs for large investments in m e e t i n g the needs o f those who do not have water a n d
sanitation services in cities, t o w n s a n d villages.

Fourth, Pakistan has b e e n accumulating a n environmental debt by not investing in m u n i c i p a l a n d

industrial wastewater. I t i s clear t h a t this has to change, a n d t h a t it i s going to take large amounts o f
investments.

Fifth a n d finally, Pakistan has to walk o n two legs - i n v e s t i n g simultaneously in infrastructure a n d in

developing the institutions required for t h e sustainable management o f increasingly-scarce water.

T h e resource requirements f o r all o f these priorities are v e r y large. G o v e r n m e n t faces three essential
tasks. First, to set priorities for t h e short a n d m e d i u m term. Second, to define the principles w h i c h

xvii
will g o v e r n w h a t proportions o f the initial a n d recurrent costs are paid by taxpayers a n d by users.
Third, g o v e r n m e n t has to ensure t h a t the l i m i t e d financial resources are used very efficiently. This is
obviously not happening in the business-as-usual m o d e l a t present. I t i s going to m e a n exploring a
w h o l e set o f mechanisms for i n t r o d u c i n g competition, for paying for output not inputs, a n d for
increasing accountability.

T h e agrarian e c o n o m y of Pakistan accounts for about 25% of GDP a n d

employs about h a l f o f the l a b o r force. W h i l e the transition to a n u r b a n
a n d industrial e c o n o m y can a n d must continue, agriculture will remain
central for the well-being o f large n u m b e r s o f people. Better water
management i s a k e y constraint to improvingagricultural p r o d u c t i v i t y a n d
generating jobs. O v e r the past several decades, farmers have largely taken
the p r o b l e m into their own hands, a n d solved it by sinking hundreds o f
thousands o f tubewells w h i c h p r o v i d e just-in-time water for their crops.
To a substantial degree the m a i n f u n c t i o n o f the canal systems has b e e n
to recharge the groundwater - about 80% o f groundwater abstractions in
Punjab c o m e from recharge from canals. T h e survival o f the water
e c o n o m y over the last several decades has largely b e e n despite rather t h a n
because of the State - it has b e e n t h e t a p p i n g o f the unmanaged
groundwater by millions o f farmers, by towns a n d villages a n d industries t h a t have p u l l e d the e c o n o m y
through. I t i s clear that this era o f productive anarchy i s now c o m i n g to a n end, since groundwater
i s now b e i n g over tapped in m a n y areas (including both the Indus B a s i n a n d Balochistan a n d other
non-Indus areas). This poses two v e r y m a j o r challenges to the State. First, surface water supply
systems are going to resume their previous high importance, a n d n e e d to b e managed m u c h m o r e
accountably a n d effectively. Second, groundwater will have to b e managed - for related reasons o f
quantity a n d quality - m u c h m o r e aggressively t h a n has b e e n the case in t h e past.

I t i s also obvious that the needs for water are changing substantially, as a result of agricultural
diversification, urbanization, industrialization, recognition o f environmental needs, climate change a n d
t h e e v o l u t i o n o f t h e natural resource base. Since there will be, if anything, less rather t h a n m o r e water,
i t means t h a t the n e w water e c o n o m y i s going to have to b e o n e w h i c h i s m u c h m o r e flexible, in w h i c h
a k e y will b e the voluntary reallocation o f water from those who need it less to those who need it
more.

I t isgoing to require a v e r y different type o f state machinery at both Federal a n d P r o v i n c i a l levels to

m e e t these challenges. In constructing this new water state, the focus must b e p r i m a r i l y on
instruments w h i c h g o v e r n the relationships o f d i f f e r e n t users with the water, a n d with each other. T h e
logical organizational architecture t h e n i s that w h i c h i s required to manage t h e instruments a n d o r d e r
the relationships between t h e parties. Some o f the k e y elements o f t h e new water state will be:
I n t r o d u c i n g accountability, efficiency, transparency a n d c o m p e t i t i o n into t h e surface water
supply business. T h i s will m e a n unbundhng t h e business into bulk, transmission a n d
distribution enterprises, with relations a m o n g the parts governed by contracts w h i c h specify
the rights a n d responsibilities o f both parties. W h i l e i t will not b e easy to enforce such
contracts, experience shows t h a t this c a n stimulate i m p r o v e d accountability a n d service
quality. This will m e a n moving away from a m o n o l i t h i c service m o d e l b e l o w the distributaries
(with Farmers Associations c o m p e t i n g for the market with the i r r i g a t i o n department) a n d
into the canal c o m m a n d s (where a variety o f forms o f public-private partnerships can p r o v i d e
a n alternative to t h e i r r i g a t i o n department). In m a n y cases, professionals from t h e I r r i g a t i o n
D e p a r t m e n t s would b e encouraged to form private businesses for the p r o v i s i o n o f such
services, thus ensuring t h a t their s k i l l s are not lost, a n d that they do not see t h e changes as
purely a loss o f security. T h e bulk business (operation o f dams a n d barrages) would p r o b a b l y
r e m a i n in state hands, but with m a n y m a j o r functions (such as operation o f p o w e r plants)

xviii
 concessioned out to private operators. A similar institutional architecture would pertain for
the drainage infrastructure.
In such a system (which would take place as a sequenced a n d p r i o r i t i z e d process o v e r m a n y
years) the g o v e r n m e n t would, gradually, play a v e r y d i f f e r e n t role. I t would corporatize the
state o w n e d operating u n i t s a n d develop n e w capacities to do t h e e c o n o m i c regulation. T h e
g o v e r n m e n t would also b e far m o r e active in groundwater management, w h e r e it has been
largely absent. This would m e a n developing a n e w legal a n d regulatory f r a m e w o r k for co-
managing groundwater with user associations. I t would m e a n developing t h e sophisticated
natural resource management capacity required for management o f the water a n d l a n d
systems.
A center-piece o f these systems, both surface a n d ground water, would b e improvingthe
administration o f a well-established system o f water entitlements. W h a t i s now needed i s
finalization of the agreement on environmental flows into t h e D e l t a (a process that i s
underway) a n d t h e n i m p l e m e n t a t i o n o f the A c c o r d in a transparent manner, audited by a n
auditor who is, a n d is perceived to be, neutral. T h e same system t h e n needs to b e drilled
down to t h e canal c o m m a n d s within t h e provinces (where entitlements are mostly w e l l
established but not transparently administered). And so on down all the w a y to t h e users
associations a n d eventually to the farmers. T h e r e i s b r o a d agreement a m o n g most water
professionals in Pakistan t h a t this i m p r o v e d administration is quite feasible a n d that i t would
increase efficiency, a l l o w flexibility in adapting to scarcity a n d reduce c o n f l i c t a n d install trust
in the system.
A similar, a n d even m o r e difficult, process is essential for t h e management o f groundwater
quantity a n d quality, since groundwater reservoirs are already b e i n g m i n e d in t h e barani a n d
sweet water areas. Again, this will take a w e l l thought-out, pragmatic, patient a n d persistent
strategy. T h e central elements will b e heavy i n v o l v e m e n t o f users, substantial investments in
m o d e r n water a n d agricultural technology, a n d the State p l a y i n g a v i t a l r o l e as developer o f the
enabling legislation, a n d regulator a n d p r o v i d e r o f k n o w l e d g e a n d decision support systems.

In the eyes o f m a n y the idea o f such a m o d e r n , accountable

Pakistan water system i s panglossian, g i v e n t h e deteriorating
performance in recent decades a n d the broader challenges o f
governance. T h e glass is, o f course, always h a l f empty. But it i s
h a l f full too. Pakistan has a stronger base for doing this t h a n
most other developing countries, a n d there are some i m p o r t a n t
signs that the need for change i s b e i n g understood, there are
political leaders who are starting to grapple with these realities,
a n d the g o v e r n m e n t a n d p r i v a t e sector leaders are taking the
i m p o r t a n t f i r s t steps down this long a n d winding road.

Pakistan i s fortunate, too, in t h a t it i s not the first c o u n t r y in the world to face this (daunting) set o f
challenges. T h e experiences o f o t h e r countries suggest that there are a set o f rules for reformers in

..
undertaking such a transition. These rules include:

.
Initiate r e f o r m w h e r e there i s a p o w e r f u l need a n d demonstrated d e m a n d for change.
I n v o l v e those affected, a n d address their concerns with effective, understandable i n f o r m a t i o n .

..
I f everything i s a priority, nothing i s a priority -- develop a prioritized, sequenced l i s t o f
reforms.
P i c k the l o w - h a n g i n g fruit f i r s t - nothing succeeds l i k e success.

.. K e e p your eye on t h e b a l l - dont l e t t h e best b e c o m e t h e enemy o f the good.

B e aware t h a t there are no silver bullets.
Dont throw t h e b a b y out with the bathwater.

xix
 ..
..
Treat r e f o r m as a dialectic, not mechanical, process.
Understand that all water i s local and each place i s different - one size will not fit all.

.
B e patient, persistent and pragmatic.
Ensure that reforms provide returns to politicians who are wilting to make changes.
Recognize that water, unlike electricity or telecommunications, i s far from a simple
commodity

Waters a pasture for science to forage in

Waters a niark o f our dubious origin
Waters a link with a clistant futurity
Waters a symbol o f ritual purity
Water i s politics, waters religion
Water i s just about anyones p i g e o n
\Xater i s frightening, waters endearing
Waters a lot m o r e t h a n mere engineering
Water i s tragical, water i s comical
Water i s far from the Pure Economical.
Kenneth Boulding

An i m p o r t a n t objective o f t h i s R e p o r t i s to h e l p define the water elements

o f the framework (known as the Country Assistance Strategy) w h i c h will
govern the relationship between the World B a n k a n d Pakistan for the
period 2006-2010. This i s a n iterative process, in w h i c h there have already
been m a n y discussions involving the Federal and Provincial Governments,
the Banks Country Management a n d the Banks Pakistan Water Team.
W h i l e the final agreement on water will only b e decided jointly with the
other elements o f the CAS, the contours o f t h i s agreement are already broadly clear.

T h e Federal and Provincial

governments a n d the
management o f the World B a n k 10 ~

all agree that water management

i s one o f the central development 15 -
challenges facing Pakistan, and
that it i s a n area where the B a n k
10 -
has a long history and a strong

0
comparative advantage. This i s
Podil
in b r o a d agreement with the
findings o f a m a j o r poll o f a w i d e
variety o f South Asian
0
stakeholders (Figure S18), w h i c h
concluded that infrastructure, Prtority that should be Jven by the Bank
education and governance were
the three areas w h i c h were both Figure 518: The global poll results f o r South Asia
o f high national importance and Source: World Bank ZWZ
where the B a n k was perceived to
have a comparative advantage.

xx
T h e r e is,
therefore, a
general
agreement that 0Major Infrastructure 0 lrngation and Drainage 0 Floods 0 Urban WSBS 13Rural WSBS ImnHydro +% all Bank lending

there will b e a
600
m a j o r increase in
B a n k l e n d i n g for
water-related
activities, with
the indicative
overall figures
shown in Figure
S19.

This would m e a n
that water-related
l e n d i n g for
Pakistan would
1952-1960 1961-1970 1971-1980 1981-1990 1991-2000 2OOC-2004
increase about 10
fold from the
2000-2004
Figure S19: World Bank Lending t o Pakistan f o r Water-related
period, a n d
account for
-
Sectors Past and Prospective
Source: World Bank 2004
about $1bitlion
in the c o m i n g
four years. World B a n k support would b e based on principled pragmatism recognizing that r e f o r m s
a n d investments must proceed in parallel a n d the best should not b e allowed to become the enemy o f
the good. Broadly speaking, B a n k assistance would support four pillars of t h e water sector, as
described below:

Pillar 1: Asset Development and Management

Pakistan has a large e n d o w m e n t (with a n estimated replacement value o f US$60 to 70 bitlion) of water
resources infrastructure, most o w n e d a n d managed by the provinces, and m u c h now quite old. B a n k -
f u n d e d projects will make m a j o r investments in rehabilitation of some critical assets (including
barrages) and will h e l p put in place Asset Management Plans w h i c h will set priorities for asset
rehabilitation a n d maintenance, m a k e explicit t h e requirements for p u b l i c a n d user financing, a n d
develop efficient institutional arrangements for rehabilitating a n d maintaining t h i s infrastructure. T h e
B a n k will also continue i t s support for: developing a n d i m p l e m e n t i n g a drainage a n d s a l t management
strategy, other investments - i n c l u d i n g small dams, minor irrigation a n d groundwater management - in
barani areas outside t h e Indus Basin, as w e l l as for improving livelihoods a n d safety in coastal areas.

O n e m a j o r issue that i s likely to emerge in t h e 2006-2010 CAS p e r i o d i s possible B a n k engagement in

developing a n d co-financing m a j o r n e w Indus Basin storage a n d hydro, if a n d w h e n the G o v e r n m e n t
makes such a decision. T h e G o v e r n m e n t i s actively addressing some o f the m a j o r issues w h i c h have
been raised about a n e w d a m on t h e Indus, i n c l u d i n g transparent i m p l e m e n t a t i o n o f the 1991 Water
A c c o r d a n d environmental flows into the delta. In discussions with the G o v e r n m e n t it has b e e n
agreed that the B a n k c o u l d b e involved, with t h e usual provisions that any such project m e t t h e Banks
n o r m a l technical, economic, social a n d environmental standards, a n d that these investments were p a r t
o f a n overall p r o g r a m w h i c h i n c l u d e d institutional r e f o r m s and investments a t federal, provincial, canal
c o m m a n d and f a r m levels to ensure better use o f water.

xxi
Pillar 2: Water Resources Management

T h e B a n k expects to support development o f capacity at the provincial and federal levels for
improving water and associated natural resource management. For surface water supplies, a major
emphasis will b e building on Pakistans p l a t f o r m o f defined water entitlements, m a k i n g the
administration of these m o r e transparent and accountable, from the inter-provincial to the user levels.
For groundwater, the B a n k will support the development o f the governments capacity for knowledge
generation, p o l i c y generation a n d management. A major emphasis will need to b e on developing a
better understanding o f s a l i n i t y a n d formulation o f salt management strategies; groundwater recharge;
and flood flows. For both surface and groundwater there will b e a n emphasis on incorporating
environmental issues (including water quality, wetlands and environmental flows). An i m p o r t a n t
element o f B a n k support will b e training o f a n e w generation o f multi-disciplinary water resources
specialists and support for multi-disciplinary centers o f excellence for water resources, natural and
social sciences.

Pillar 3: Service Delivery

T h e B a n k expects to b e heavily engaged in provincial- and city-level efforts to i m p r o v e the quality,

efficiency and accountability with w h i c h water supply, sanitation and irrigation services are delivered.
T h e B a n k will emphasize the development o f frameworks w h i c h encourage the entry o f n e w players
(including c o m m u n i t y organizations, and the small- a n d large-scale private sector), the use of contracts
w h i c h specify the rights and obligations o f providers and users a n d benchmarking for all water
services. T h e B a n k will emphasize the modernization o f infrastructure - including canal re-modeling
and the use o f measuring devices, w h i c h are integral for moving to a m o r e flexible, accountable,
transparent and monitorable service delivery paradigm.

Pillar 4: On-farm Productivity

T h e B a n k will continue to invest in the on-farm services (land leveling, watercourse lining, and
i n t r o d u c t i o n o f n e w technologies through private-public partnerships) w h i c h are essential for
agricultural diversification and for improving the amount o f crop, i n c o m e and jobs produced p e r drop
o f water.

T h e B a n k anticipates providing such support through i t s various lending instruments, including

budgetary support for policies a n d prior actions that address key issues (Development Policy Lending)
as w e l l as through specific investment lending for infrastructure a n d institutional reforms. Finally,
given the m a j o r scientific, policy and implementation challenges ahead, the Bank, with partial support
from the G o v e r n m e n t o f the Netherlands, will mount a major p r o g r a m for providing analytic and
technical support to the federal and provincial governments.

Paraphrasing A k h t e r H a m e e d K h a n , the great Pakistani reformer, i t might b e said that the Banks
involvement in water in Pakistan has been one in w h i c h the B a n k has chased the rainbow o f well-
functioning institutions and dreaded the nightmare o f further institutional decay.. .. a n d that only the
boldest a m o n g us can say that w e m a y not be similarly engaged tomorrow*.

xxii
 I: THE 88
In 2003, the B o a r d o f Executive D i r e c t o r s (representing the 180 countries who own the World Bank)
a p p r o v e d a n e w W a t e r Resources Sector Strategy. Two i m p o r t a n t conclusions of t h e Strategy were
that t h e general principles adopted needed to b e adapted to the widely-varying conditions pertaining in
the Banks borrowing countries a n d that there needed to b e m o r e systematic a n d integrated
i n c o r p o r a t i o n o f water-related issues into Country Assistance Strategies (CAS, t h e contract between
the G o v e r n m e n t a n d the B a n k w h i c h defines a n indicative four-year package o f investment a n d
advisory services to b e p r o v i d e d by t h e World Bank). W a t e r management i s a m a j o r issue for Pakistan
a n d area w h e r e t h e B a n k has a long history o f engagement a n d a perceived comparative advantage. As
p a r t o f t h e process of preparing a Pakistan Country Assistance Strategy for the p e r i o d 2006-2010 i t was
agreed t h a t t h e B a n k would do a W a t e r CAS for Pakistan, following the logic shown in Figure 1.
Generous support was p r o v i d e d by t h e B a n k Netherlands W a t e r Partnership Program.

Figure 1: The Water CAS process

T h e Pakistan W a t e r CAS process i n v o l v e d several related elements:

Extensive discussions with senior officials o f t h e p r o v i n c i a l a n d the federal governments,
i n c l u d m g a m a j o r f o r m a l consultation on institutional issues;
A consultation with about 50 stakeholders from the private sector, academia, NGOs,
professional associations a n d government; a n d
T h e c o m m i s s i o n i n g of the following b a c k g r o u n d papers by p r o m i n e n t Pakistani practitioners
a n d p o l i c y analysts.

1
 BACKGROUND PAPER
1: Water, growth and
2. H u m a n a n d Social
Dimensions.
evapotranspiration.
+
6. Water rights a n d
~
entitlements.
7 . Sustainable, accountable
institutions.
9. Drinkingwater a n d
sanitation.
10. T h e political economy
o f reform.
11. T h e role o f large dams
in the Indus S stem.
12. Ground water
development a n d
Management
13: Modernization o f
Agriculture
14. T h e policies a n d
prospective plans for
development a n d
management o f water
resources by the Federal a n d
Provincial Governments.
15. Flood Control a n d
Management
16. Drainage and salinity
management.
17: T h e evolution o f B a n k
lending a n d non-lending for
water in Pakistan
18. T h e evolution o f B a n k
lending & non-lending for
water supply a n d sanitation
AUTHOR(S) IESIGNATION
Sarfraz K h a n Qureshi 2ormer Director, Pakistan Institute o f Development
itudies
K a r i n Siegmann a n d iesearch Fellows, Sustainable Development Policy
Shafaat Shezad Institute
Managing D i r e c t o r
3agler Badley
i e t i r e d WAPDA official
Zhief Scientific O f f i c e r
Water N a t u r a l Resources Division, Pakistan
4 ~ r i c u l t u r aResearch
l Council
Zhief Engineer ACE (Pvt.) Ltd. / Project Coordinator
Faizul Hasan
Senera1 Consultants for WAPDA
Sardar M u h a m m a d 'ormer M e m b e r (Water), a n d Chairman WAPDA
T a r i q a n d Shams-ul- :espectively
Mulk
K h u r r a m Shahid Zonsultant
I m r a n Ali Professor, Lahore University of Management Sciences
TUMS)
Pervaiz Amir Economist
Asianics Agro. D e v . International
F r a n k V a n Steenbergen Metameta Research a n d Ground Water/Water Quality
Shamshad G o h a r Specialist
PCWSSP
Pervaiz Amir Economist
Asianics Agro. D e v . International
Sardar M u h a m m a d F o r m e r M e m b e r (Water), a n d Chairman WAPDA,
T a r i q a n d Shams-ul- respectively
Mulk
Asif K a z i F o r m e r Special Secretary M i n i s t r y o f Water a n d
Power a n d Ex-Chairman
Federal Flood Commission
M. N. B h u t t a and D i r e c t o r General
L a m b e r t Smedema International Water Logging a n d Salinity Research
I n s t i t u t e fTWASRn
U s m a n Qamar Senior I r r i g a t i o n Engineer, World B a n k
Pervaiz Amir a n d N a d i r Economist
Abbas Asianics, a n d Sr. Water Supply and Sanitation
Specialist, World B a n k
2
 WE CHALtE

The challenges

Pakistan i s a n a r i d country. T h e
balance b e t w e e n p o p u l a t i o n a n d
available w a t e r already makes
Pakistan o n e o f t h e most water-
stressed countries o f the world
(Figure 2); with r a p i d p o p u l a t i o n
growth i t will s o o n enter a c o n d i t i o n
o f absolute water scarcity (Figure 3).

In the cultivable plains, rainfall

ranges from a b o u t 500 mm a year
along the P u n j a b b o r d e r with I n d i a
( w h i c h receives some rainfall from
the s u m m e r monsoon) to only 100
mm a year in t h e western parts o f
Pakistan. These low precipitation
Figure 2: One of the worlds most water-stressed countries
a3
%,.,.
levels m e a n t h a t rain-fed, or barani,
agriculture, i s not possible on a large
scale in Pakistan. Throughout
history people have adapted to t h e
low a n d poorly distributed rainfall
by either living a l o n g river banks or -r---- _li_

by careful h u s b a n d i n g a n d
management o f l o c a l water
resources. O n e of the greatest o f
h u m a n civilizations - the I n d u s
Valley (Mohenjodaro a n d Harappa)
civilization flourished a l o n g the
banks o f t h e I n d u s . But u n d e r
natural conditions p o p u l a t i o n
densities were necessarily low.

With British rule everything

changed. As analyzed in D e e p a k Figure 3: Declining per capita availability o f water in
Pakistan (cubic meters per capita per year)
Lals history o f e c o n o m i c growth in
Source. Amir 2005
the subcontinent3, t h e British
understood that the marginal
returns to water d e v e l o p m e n t w e r e higher in regions o f relatively low rainfall t h a n in the higher rainfall
areas a n d thus emphasized hydraulic works w h i c h would make t h e deserts bloom4. In m a n y ways
the imperative was to go west, young man, i n c l u d i n g into t h e a r i d p a r t o f eastern Punjab.

3
I n a n y social endeavor o f such ambition, the result varies depending on t h e interaction o f t h e natural
a n d h u m a n terrain as described brilliantly in I m r a n A l i ' s seminal book " T h e Punjab u n d e r
1mperialism"s a n d in h i s background paper for this Report6. As the i r r i g a t i o n systems stretched further
a n d f u r t h e r away from areas o f reasonable rainfall, they dealt with quite different social realities on the
ground a n d gave rise to quite different hydraulic civilizations. I n UP a n d eastern Punjab canal
i r r i g a t i o n occurred primarily on already settled lands, a n d i r r i g a t i o n was a supplement to relatively well-
watered rain-fed cultivation. In western Punjab, the p a r t t h a t would b e in Pakistan, the situation was
quite different. I r r i g a t i o n here was onto pastoral lands, only a small fraction o f w h i c h w e r e private
proprietary holdings. These extensive b a r r e n tracts w e r e appropriated as state p r o p e r t y a n d
categorized as Crown or State Waste L a n d . N o t only w e r e t h e rights o f t h e pastoral tribes to t h e l a n d
not recognized, but these tribes were also deemed to lack the agricultural traditions to m a k e a success
o f cultivating n e w land. T h e British administration t h e n embarked on a vast process o f agricultural
colonization, by essentially i n t r o d u c i n g colonists from o t h e r parts o f the P u n j a b to these 'canal colony'
lands

A massive canal system (Figure 4 shows i t s extent today a n d Figure 5 the architecture from t h e barrage
to t h e field) was built, with the principle b e i n g to m a x i m i z e t h e use o f "run-of-the-river" flows in the
khanzseason a n d to a l l o w equal distribution to all irrigators by use o f the warabandi, a time-based roster
allocation system. Since that t i m e agriculture in the r e g i o n has largely b e e n synonymous with
irrigation, with rainfall playing only a supplementary role both for the spring (rabz) a n d a u t u m n ( k h a n j
harves ts7.

-.

:rrigation System
Source: Hosan 2005

4
 I , Figure 5: A typical canal command in t h e Indus system Source: Hasan 2005

As p o p u l a t i o n densities
increased, especially in
the areas adjacent to
1
-Lim Lost -Area Flooded (Million Acres) 1
t h e rivers, so too did
3,500 25
the vulnerability of
people to the naturally 3,000
20
meandering nature o f 2,500
heavily-silt laden rivers, 15
2,000
a n d to floods. As
s h o w n in Figure 6, 1,500 10
floods have, with 1,000
considerable regularity, 5
500
i n f l i c t e d large damages
a n d caused m a n y 0 0
deaths. T h e nature o f
the flood p r o t e c t i o n
a n d management
challenge varies
considerably across t h e
Source: Kozi. 2005
countrys. In NWFP
a n d Balochistan a n d
parts o f the Punjab the so-called hill torrents are usually highly beneficial, sustaining a large
agricultural population. Occasionally flash floods cause serious damage, as did t h e drought-ending

5
floods in Balochistan in 2005. I n the plains the p r o b l e m i s different. Punjab has p r o b l e m s both with
i n u n d a t i o n a n d l a n d erosion, but intelligent use o f the natural, south-west slope o f the l a n d has
reduced t h e i m p a c t of flooding. I n all river systems, a n d especially those with heavy s i l t loads, t h e
greatest flooding p r o b l e m s are in the flat deltas. And so i t i s in Pakistan, w h e r e Sindh i s basically a
delta in w h i c h t h e Indus has meandered o v e r millennia. As in all deltas, o n c e s i l t i s deposited in o n e
place, t h e r i v e r shifts to a lower-lying area. In times of flood these can b e v e r y dramatic a n d long-
distance shifts. As larger populations inhabited the delta, however, t h i s uncertainty was not acceptable
a n d so, o v e r t h e past 150 years the Indus R i v e r has now b e e n put in a straitjacket, thereby fixing i t s
location9. T h e result o f this river training, as with so m a n y o t h e r silt-laden rivers a r o u n d t h e world,
has m e a n t t h a t w h e n s i l t i s deposited the river now does not shift course horizontally, but vertically,
giving rise to a situation w h e r e the river i s now higher t h a n surrounding l a n d a n d the choice i s between
two unsatisfactory a n d expensive options - dredging a n d c o n t i n u i n g to raise t h e side embankments.
T h e inevitable consequence i s that w h e n a p r o t e c t i o n bund breaches in Sindh Province, inundations
are prolonged, a n d the floods not only damage summer crops but they also interfere with t h e sowing
o f subsequent w i n t e r crops. T h e potential for economic losses, a n d h u m a n sufferings for the poor
inhabitants o f relatively cheap flood-prone lands near the river, are the greatest. In addition to millions
o f acres o f irrigated l a n d t h a t i s subjected to flooding, countrys m a j o r rail a n d roads are also
sometimes affected by super flood events t h a t keep the infrastructure out o f service for long
durations.1

T r a n s f o r m i n g a n a r i d a n d capricious e n v i r o n m e n t into o n e in w h i c h large n u m b e r s o f people c o u l d

l i v e peaceful a n d prosperous lives is, everywhere, a great gamble a n d even, in t h e eyes o f some, a
Faustian bargain. T h e natural flow regimes o f the rivers w e r e dramatically altered. Rivers w h i c h h a d
previously meandered o v e r w i d e plains were now confined within n a r r o w channels. T h e large
quantities o f sediments w h i c h were washed off o f the young Himalayas in t h e spring floods now no
longer n o u r i s h e d t h e delta but w e r e diverted onto l a n d (and later partially trapped b e h i n d high dams).
V a s t quantities o f water were disgorged onto deserts, substantial parts o f w h i c h were o f oceanic origin
a n d highly saline. And areas w h i c h were previously habitable only by n o m a d s w e r e now transformed
into dense canal colonies o f i m m i g r a n t farmers.

T h e area was, for better or worse, transformed into a hydraulic civilization w h i c h brought great returns
but w h i c h also posed, a n d poses, massive political, hydraulic a n d e c o n o m i c challenges in maintaining
a n acceptable balance b e t w e e n the natural system a n d m a n .

T h e first challenge for t h e n a t i o n o f

Pakistan was a political challenge
w h i c h arose because the hasuly-drawn
lines o f P a r t i t i o n severed t h e irrigated
heartland o f P u n j a b from t h e life-
giving waters o f the Ravi, Beas a n d
Sutlej rivers (Figure 7).

T h e second challenge was a hydraulic

challenge, because there was now
(Figure 7) a m i s m a t c h b e t w e e n t h e
l o c a t i o n o f Pakistans water (from the
Indus, Jhlum a n d China, the so-called
western rivers) with t h e areas t h a t h a d
previously been irrigated from t h e
Ravi, Beas a n d Sutlej ( w h i c h w e r e now
Indias rivers). Figure 7 : The Indus Water Canal System a t Partition in 1947
T h e third challenge was neither
political nor hydraulic but ecological.
I t was this last reality w h i c h gave rise
A C W DOAB RECHNL M A R A
to the third m a j o r water challenge BAR1 DOAB

w h i c h Pakistan h a d to face at and after

Independence. Hundreds o f billions
o f cubic meters o f water were now
stored in the naturally-deep aquifers o f
Punjab alone. T h e groundwater table
rose dramatically (Figure 9, and in
m a n y areas water tables now reached
the level o f the land. And these
waters were r i c h in salts w h i c h had
been absorbed from the soil. A f t e r
the water evaporated, the l a n d was
covered with a crispy layer o f life-
Figure 8: The change in groundwater levels
suppressing salt. In the early 1960s i t
Source: Bhutto and Srncdrmo ZM
appeared that Pakistan was doomed,
ironically, to a watery, salty grave.

The response - public infrastructure

Partition both created Pakistan and did it in such a way that the very survival o f the country was put in
jeopardy. Almost ninety percent of the irrigated area in the Indus Basin was now in Pakistanlz, but the
rivers w h i c h nourished these lands h a d their origins in I n d i a (and, to a minor degree, in remote and
sparsely inhabited parts of China).

O v e r the n e x t decade, teams from Pakistan a n d I n d i a w o r k e d together with a team from the World
B a n k (whose o f f e r of i t s good offices was accepted by both countries) to fashion a solution w h i c h
would b e acceptable to both sides and would be durable. There were great difficulties and m a n y dead
ends. T h e f i r s t proposal (framed b y D a v i d Lilienthal, f o r m e r Chairman o f the Tennessee Valley
Authority and the person who got the ball rolling on the Indus Treaty) was o f a single, integrated basin
authority. This was rapidly rejected as b e i n g impractical. T h e b r o a d outlines o f the agreement were
that Pakistan was (with minor exceptions for existing uses in Kashmir) assigned full use o f the waters
o f the Indus,Jhelum and Chenab rivers, w h i c h accounted for 75% o f the waters o f the system. But
the unique feature o f the negotiating process was that i t was agreed that the process should not b e
driven by legal principles but that, instead, principles o f water engineering a n d economics were to b e
the basic considerations.13 This meant that, Pakistans considerable misgivings notwithstanding, I n d i a
was to b e permitted (under very carefully specified conditions w h i c h took two years to negotiate) to
tap the considerable hydropower potential o f Pakistans three rivers before these entered Pakistan.

T h e Indus Waters Treaty (IWT) was not a first-best for either side. T h e n there were conflicting
principles put on the table - no appreciable harm versus equitable utilization. As in most other
cases international water l a w i s used by riparians less to resolve disputes t h a n to dignify positions
based on individual state interest.l5. And so too i t was for the way in w h i c h the IWT was (and
sometimes s t i l l is) perceived. From the I n d i a n side the fact that Pakistan got 75% of the water
represented a fundamental violation o f t h e principle o f equitable utilization (the favorite o f the
International L a w Association). The Treaty came under heavy fire in the I n d i a n parliament and was
subjected to trenchant criticism by most o f the speakers who participated in the Lok Sabha debate on
the subject on 30 N o v e m b e r 1960. T h e y blamed the G o v e r n m e n t o f I n d i a for a policy o f
appeasement and surrender to Pakistan a n d said that I n d i a n interests h a d been let down.. .I6 From

7
the Pakistani side the fact that they were allocated only 75% o f the water w h e n they h a d 90% of the
irrigated l a n d represented a violation o f the principle o f appreciable h a r m (the favorite of the
International L a w Commission). A solomonic judgment (to w h i c h w e r e t u r n several times in this
report in other contexts) was that o f President Ayub K h a n : . . ..we have b e e n able to get the best that
was possible.. ..very o f t e n the best i s the enemy o f the good a n d in this case w e have accepted the
good after careful a n d realistic appreciation o f our entire overall situation.. ... T h e basis o f this
agreement i s realism a n d pragmatism.. ..I7 T h e wisdom o f this perspective has been vindicated m a n y
times over the past 45 years, with the Indus Treaty recently again being declared sacrosanct by the
Presidents o f both countries.

A central element o f the Indus Waters Treaty was the construction of the infrastructure w h i c h would
enable Pakistan to both
supply those areas w h i c h
would no longer b e irrigated
from the Ravi, Beas or Sutlej
(Indias rivers) a n d to
increase the overall area
under irrigation. T h e Indus
Basin D e v e l o p m e n t Fund
(with contributions from
several western governments,
a payment from I n d i a a n d
loans from the World Bank)
was used to re-plumb the
system, as s h o w n in Figure 9.
This included the building o f
massive link canals from
the western rivers to the east
and to build the two main
storage dams (Tarbela, t h e
then-biggest r o c k f i l l d a m in
the world, on the Indus a n d
Mangla on the Jhelum) on
w h i c h the re-configured system would depend.

This was a massive engineering challenge, that faced, as do all challenges in life, times w h e n failure
seemed imminent. But with great s k i l l a n d c o m m i t m e n t Pakistans engineers a n d their collaborators
from around the world did it.

T h e Indus Waters Treaty brought a fundamental and unprecedented change in Pakistans options and
approach towards i t s water development a n d management, With the loss o f the three eastern rivers,
Pakistan h a d no choice but to rely on storage for meeting i t s existing demands (Mangla) a n d for future
extension o f the irrigated area (Tarbela). In short, the development a n d sustainability o f water
resources development in Pakistan became, a n d continues to be, dependent on storage a n d dams.

W h a t was the social a n d economic i m p a c t o f this infrastructure? First, i t secured the future o f a young
and vulnerable country. (tI i s relevant to n o t e that, despite the fact that it was f u n d e d by the World
Bank, there was no economic analysis d o n e o f Mangla D a m - i t was a n investment that was self-
evidently necessary for the p u r e survival o f the Punjab in Pakistan.). Second, it - especially Tarbela -
facilitated the expansion o f irrigated area a n d the p r o d u c t i o n o f clean a n d renewable hydropower. In
a major study done for t h e World Commission on Dams, Pervaiz Amir a n d colleagues did a n ex-post
assessment o f the i m p a c t o f Tarbela.

8
T h e i m p a c t was and i s massive. In the mid-1970s t h e World B a n k did a n ex-post assessment o f the
economic i m p a c t o f Mangla and the link canals. W h i l e recognizing that the indirect benefits were
large, t h e assessment focused only on direct benefits, a n d concluded that these exceeded 10%.

~ Power Irrigation
3500 1
(I)
3000
2500
g 2000
r
1500

0
E 1000
500
0
Predicted Actual
those predicted at
appraisal (Figure 10). As Figure 10: Benefits from Tarbela 1975-1998
n o t e d in t h e Tarbela 51ICh onnn

T h e r e have been two m a j o r studies in t h e sub-continent w h i c h have examined these indirect impacts.
A study by t h e International Food Policy Research I n s t i t u t e of the i m p a c t o f t h e green revolution19
showed that:
T h e multiplier was large -- each rupee increase in value added in agriculture stimulated a n
additional rupee o f value added in the regions n o n - f a r m economy;
About h a l f o f t h e i n d r e c t i n c o m e gain was due to agricultures demands for inputs a n d
marketing a n d processing services, a n d t h e rest d u e to increased consumer demands as a
consequence o f higher incomes; a n d
T h e multipliers for basic productive infrastructure were m u c h higher t h a n for social spending
and other sectors.

9
As p o i n t e d out by Pervaiz Amir20, the i n d i r e c t impacts o f m a j o r dams in Pakistan are likely to b e quite
similar to those emanating from the similar-sized B h a k r a D a m in the I n d i a n Punjab, for w h i c h there
has b e e n a m a j o r recent assessment21. T h e study found t h a t the direct benefits w e r e higher t h a n
anticipated w h e n the d a m was built a n d t h a t the d a m did, indeed, serve to t r a n s f o r m this region. For
every 100 rupees o f direct benefits, B h a k r a generated 90 rupees o f indirect benefits for t h e regional
e c o n o m y a n d ripples w e l l b e y o n d the region.

These investments were d o n e in the n a m e o f national survival, food security a n d e c o n o m i c growth:

how do t h e y fare w h e n judged by the contemporary c r i t e r i o n on p o v e r t y reduction?

T h e single m o s t i m p o r t a n t finding from

research shows that the central issue for
p o v e r t y r e d u c t i o n i s not who gets t h e
water, but how that water transforms
t h e d e m a n d for l a b o r ( w h i c h i s p r o v i d e d
p r i m a r i l y by the landless a n d marginal
farmers). T h e fundamental driver i s t h a t
the d e m a n d for agricultural l a b o r i s 50%
to 100% higher on irrigated land22. As
R o b e r t Chambers has s h o w n through
village-level work (Figure 1l), irrigation
has m e a n t higher a n d m u c h m o r e stable
-
employment, with the poor t h e m a j o r
beneficiaries.
- irrigated village
unirrigated village

Two recent, m u c h m o r e sophisticated Figure 11: Average number o f employment f o r

analyses ( w h i c h used input-output adult casual laborers each month
matrices a n d using Social A c c o u n t i n g Source: Chambers 1988

M a t r i x methods) have shown similar

results. T h e study by the I n t e r n a t i o n a l
Food P o l i c y Research I n s t i t u t e o f the
i m p a c t o f t h e green revolution23
% increase 1973-
showed (Figure 12) that the biggest
1983
winners from the G r e e n R e v o l u t i o n
w e r e t h e landless whose incomes
increased by 125 percent as a result o f '""T I I
the large increase in d e m a n d for their
100
labor.

And the m a j o r study by B h a t i a a n d 50

colleagues of the effect o f Bhakra24,
again (Figure 13) shows that t h e r u r a l 0
poor have benefited hugely from the Large farmers Smll famers Non-irrigating Landless Nan-ag
p r o j e c t a n d (Figure 14) t h a t i t was t h e with irrigation with irrigation farmers households
i n d i r e c t effects o f the d a m w h i c h h a d
the m a j o r i m p a c t on u r b a n areas (and Figure 12: The Effect of irrigation and green revolution on income
therefore on u r b a n p o v e r t y reduction).
(There are, o f course, a n u m b e r o f
Source: Hazel1 et 01 1991
i m p o r t a n t differences b e t w e e n
l a n d h o l d i n g size a n d agricultural
p r o d u c t i v i t y in the I n d i a n a n d Pakistan Punjabs, w h i c h would m e a n that the distribution o f direct
benefits, w h i c h accrue to those with land, would b e s o m e w h a t different. But there i s u n l i k e l y to b e

10
 % change of Income of Different Types of Households With
and Without Bhakra Dam
80

60

40

20

0
Landowners Agr Labor Rural Non Agr Rural Others Urban

Figure 13: The effect of Bhakra Dam on different social groups

Source: Bhatia, 2005

a Direct Impacts
l
Indirect Impacts

100%
80%
60%
40%
20%
0%
Self Agr Labor- Non Agr- Others- Urban
Erployed- Rural Rural Rural
Rural

Figure 14: Income Gains from Directly and Indirectly

Impacted Sectors- Bhakra Dam
Source: Malik 2005

11
m u c h difference in terms o f the f o r w a r d a n d backward linkages w h i c h determine the magnitude o f the
i n d i r e c t effects, or o f the effects on the poor, since l a b o r markets operate quite similarly on both sides
o f t h e border.)

With t h e certainty - or so it seems - o f retrospective wisdom, i t has b e e n claimed t h a t these

interventions did nothing for the poor, because it was r i c h farmers who benefited from t h e
infrastructure25. These studies show the limits of such a reductionist v i e w ( w h i c h has never b e e n o n e
taken by governments with responsibility anywhere in the world). At the e n d o f the day i t does not
m a t t e r (a) w h e t h e r such projects are justified in terms of p o v e r t y r e d u c t i o n or (b) whether the p r i m a r y
recipients o f t h e first-round benefits are those with land. Because t h e r e c o r d i s overwhelmingly clear
- investments in water infrastructure in t h e sub-continent have resulted in massive reductions in
poverty, a n d it i s actually t h e poor a n d landless who have b e e n the biggest beneficiaries. T h e
appropriate (water!) m e t a p h o r (as in o t h e r water projects a r o u n d the world) i s not trickle-down but a
rising tide l i f t s (almost) a l l boats.

Finally, all p u b i c infrastructure was not for irrigation. Settling large n u m b e r s o f people in a n a r i d a n d
capricious e n v i r o n m e n t means facing not only the constant threat o f famine, but the constant threat of
variabilitys o t h e r face, occasional but v e r y damaging floods. Floods are detrimental not only in
financial terms, but also in their ability to severely u n d e r m i n e the p r o d u c t i v e system that has to b e
reasonably free from uncertainties a n d frequent disruptions *6 As also p o i n t e d out by Asif K a z i , there
can b e no such thing as full p r o t e c t i o n from floods. In terms o f infrastructure, the challenges (and the
responses) are quite different in different parts o f the country. In a d d i t i o n to the m a j o r dams (which
p r o v i d e d s o m e p r o t e c t i o n from floods), a n d t h e m u l t i t u d e o f small check dams in the hills, there were
also substantial investments in flood c o n t r o l infrastructure, with about 6000 kilometers o f
embankments constructed a l o n g the m a j o r rivers a n d their tributaries27. T h e r e have also b e e n
investments in watershed p r o t e c t i o n (above Mangla, for example28) w h i c h have p r o b a b l y h a d a m o d e s t
effect on t h e uncontrollable sediment loads from t h e young mountains, a n d have a n d c o u l d have
(accepted wisdom notwithstanding) little effect on large scale flooding29. T h e Pakistan approach to
flood management has also emphasized other non-structural elements, including permanent a n d
t e m p o r a r y relocation o f p o t e n t i a l flood affectees, review o f reservoir o p e r a t i o n regulations to attenuate
flood peaks, land-use regulations for hazardous areas, a n d a n extended a n d reliable Flood Forecasting
a n d T i m e l y W a r n i n g Network.30

The response - private infrastructure

T h e large investments in surface i r r i g a t i o n transformed not only the e c o n o m y a n d landscape o f
Pakistan, but h a d a h u g e i m p a c t on groundwater. T h e vast, leaky, i r r i g a t i o n system disgorged
hundreds o f billions o f cubic m e t e d 1 into the aquifers o f t h e Indus B a s i n a t the same t i m e as w h e n
natural drainage channels w e r e impeded. T h e result was a fundamental change in the water balance,
with subterranean a n d surface flows out of t h e aquifers a n d into the rivers a n d eventually t h e ocean no
longer capable o f draining t h e m u c h larger quantities o f w a t e r w h i c h w e r e p o u r e d into the aquifers.
T h e result was a n inexorable a n d relatively r a p i d rise in t h e w a t e r table, as s h o w n for a cross-section
between the Punjab canals (Figure 15) a n d on a n average basis for a l o n g e r p e r i o d in Figure 16.

T h e r e were two p r o n o u n c e d a n d curiously entangled consequences o f t h e high water table.

12
 A CHAJ DOAE RFCUNA DOAE BIiRl OOAB A'

i r I t 4
0 20 40 60 80 lOOkm

Figure 15: The rise in groundwater levels 1860-1960

Source: Bhutta and Smedema 2005

45 0
40 -10
h

$ 35
L -20 v

-
30
E -30
e,
m 25 U
5
-40 +
$ 20 m
U -50 2
2 15 C
m
e
J

.?
- 10
-60
(3

5 -70
0 -80
1900 1915 1934 1947 1963 2001 2004

Figure 16: Irrigation expansion and groundwater levels

Source: IWASRI/WAPDA, 2004

13
T h e f i r s t consequence was a r e v o l u t i o n in the use o f groundwater. At t h e t i m e of independence,
groundwater use in the c o u n t r y was very l i m i t e d - mainly through Persian wheels in the riverine
aquifers, a n d t h e remarkable kareres (horizontal c o m m u n i t y wells) in Balochistan. This changed
dramatically from the mid-sixties onwards as a result o f several converging factors. As the G r e e n
R e v o l u t i o n took hold, farmers needed m u c h m o r e reliable supplies o f j u s t - i n - t h e water. T h e canal
system, however, with f e w hydraulic controls a n d rigid, predetermined schedules was derived for
another, less precise type o f i r r i g a t i o n a n d no longer m e t t h e m o r e d e m a n d i n g needs o f farmers,

T h e green revolution was not just about seeds a n d fertilizers, a central p a r t was also the emergence
o f the n e w m o d u l a r pump plus diesel engine technology w h i c h o f f e r e d every farmer a n exit option,
or at least o n e in w h i c h h e c o u l d ensure t h a t h e h a d water w h e n h e needed i t i f t h e canal i r r i g a t i o n
system failed. As emphasized by I W M I s Tushaar Shah32, we n e e d to recognize that self provision o f
water i s t h e best indicator o f the failure o f p u b l i c water supply systems. Tubewells proliferate in canal
commands because p u b l i c i r r i g a t i o n managers are unable to deliver i r r i g a t i o n on demand.. In
addition, starting in the 1960s there w e r e n e w forms of g o v e r n m e n t support: credit a n d soft l o a n
programs for pump sets a n d tubewells, a n d subsidies for electricity (with agricultural rates 40% less
t h a n n o r m a l rates in P u n j a b a n d Sindh, a n d 60% less in Balochistan a n d NWFP)33.

T h e second consequence o f the r a p i d rise in the groundwater table was m u c h less benign. In i t s travel
down a n d b a c k up t h e soil profile, the water h a d absorbed t h e salts - sometimes v e r y abundant where
the sediments were o f oceanic origin, as in large parts o f Sindh -- w h i c h w e r e present in t h e soil.
W h e n t h e water evaporated the salts stayed behind, covering large areas of once-fertile fields with a
sterile crust. T h e low-lying areas were now effectively barren, due to t h e c o m b i n e d effect o f salt a n d
sodden root zones. I n t h e early 1960s, i t appeared that t h e blessing o f bringing water to the desert
h a d ended up as a curse, with 4 million hectares o f Pakistan affected by waterlogging a n d salinity a n d
apparently d o o m e d to a watery, salty grave.

But j u s t as there are unforeseen ecological consequences w h e n m a n intervenes with nature on such a
massive scale, so, too, i s t h e p o w e r o f h u m a n ingenuity also o f t e n unimaginable. So w h e n President
Ayub K h a n visited W a s h i n g t o n in 1962, h e told President K e n n e d y o f t h e curse o f waterlogging a n d
salinity. And thus started another chapter, for t h a t conversation l e d to a m a j o r scientific enquiry by
teams o f natural a n d social scientists from H a r v a r d University (where else, with K e n n e d y in the W h i t e
House!) a n d their Pakistani colleagues into the causes o f the p r o b l e m a n d the p o l i c y options for
containing the damage. Intuition said t h a t the balance needed to b e restored by r e d u c i n g the flows
into the aquifers, by lining t h e canals. But the scientists said otherwise -- t h e w a y to establish a new,
not-so-close-to-the-surface water balance was to increase t h e a m o u n t o f evapotranspiration (more
crops) a n d to increase t h e circulation o f water so that t h e salts would not accumulate in t h e root zone.

And so i t proved, a l t h o u g h not quite in t h e w a y t h a t t h e scientists thought a n d advised. For t h a t was

a n era of n a h e faith in t h e capacity of governments to p l a n a n d implement, a n d of little confidence in
the actions o f i n d i v i d u a l peasant farmers. And so the p r o p o s e d solution was large-scale installation o f
public tubewells, w h i c h would re-cycle groundwater b a c k into the canals for subsequent use on the
fields in the sweetwater areas, a n d pump saline water out into drains in t h e saline areas. And so almost
20,000 high capacity (50-150 liters p e r second) government-run tubewells w e r e installed from the
1960s onwards u n d e r t h e Salinity Control a n d Reclamation Project (SCARP)34.In m a n y o f t h e worst
affected areas the SCARP f o r m u l a w o r k e d wonders - c o n v e r t i n g a saline wasteland b a c k into a
p r o d u c t i v e area. In fresh groundwater areas, the SCARP drainage t u b e wells d o u b l e d up as a n
additional source o f irrigation. In saline groundwater areas t h e p r o b l e m o f disposing t h e highly saline
effluent made the deep t u b e w e l l p r o g r a m far m o r e complicated a n d t h e i m p a c t m o r e l i m i t e d .

As w e have seen above, t h e farmers k n e w o n e thing better - they did not n e e d larger supplies o f
unreliable water, but m u c h m o r e precise supplies w h i c h they c o u l d control. And so the great attack on

14
waterlogging a n d s a l i n i t y followed the compass o f the scientists, but n o t their road-map. T h e large
SCARP tubewells were installed and did play a role; but i t was the unfettered action o f millions o f
farmers with their individual tubewells and their intensifying agriculture w h i c h reversed the rising tide
of water a n d salt, and restored a still-uneasy balance.

T h e n e t result o f t h i s interplay
o f supply- and demand-side 700,000 1
factors was (Figure 17) an
explosive increase in t h e 3 600,000 I
number o f tubewells for 500,000
irrigation, primarily in the
8 400,000
5
I
sweetwater areas far from the
ocean a n d nearer t h e -
v
v) 300,000
mountains. (The investment al
200,000
o n these private tube wells i s
P
o f the order o f Rs. 30-40
billion.) I n addition m a n y
+3 100,000
0
industries rely f o r their water
supply on relatively clean
groundwater.35
&
, Q &%, ,g $?,% @
,Q $,P @, Q @
%
, &Q$Q5
In 1960, groundwater
Figure 17: The growth in use of tubewells
accounted f o r only 8% o f the Source: Steenbergen and Gohm 2005
f a r m gate water supplies in
Punjab. T w e n t y five years ~~

later this figure was 40%, and at present groundwater use for agriculture accounts for m o r e than 60 YO
o f the water at the f a r m gate in Punjab36. I t i s estimated that 75% o f the increase in water supplies in
the last twenty-five years i s due t o groundwater exploitation37. I n t h e process, the great canal system
became less o f a water delivery mechanism, and m o r e o f a groundwater recharge mechanism. In the
Punjab, f o r example, 80% o f the groundwater recharge i s from the canal system.

Finally, i t i s instructive to
consider the source o f irrigation
El Canal water
water by both quantity and directly
value, in p a r t because i t shows
the centrality o f conjunctive
0 Tubewells
use, and the fallacy o f a
from natural
Cartesian view, namely that recharge
groundwater i s m o r e
important than surface water. E3 Tubewells
from canal-
Figure 18 shows: induced
T h a t surface water i s recharge
very important,
accounting f o r 90% By quantity By value
used f o r irrigation in (cubic meters) (Rupees)
Punjab (40% directly
and 50% indirectly).
T h e massive infusions Figure 18: Quantities and values o f irrigation supplies in Punjab,
o f surface water remain by source
as i m p o r t a n t as ever.
However, primarily
because o f the inability

15
 o f t h e surface system to directly m e e t the just-in-time demands o f m o d e r n agriculture, t h e
delivery i s through the circuitous (and costly in m a n y ways) groundwater system; a n d
T h a t groundwater i s very important, accounting for 60% o f the water delivered at t h e f a r m
gate a n d 75% o f the value o f water delivered.

In summary, the last forty years witnessed a n extraordinary demonstration o f mans ability to think a n d
act h i s w a y out of apparent dead ends. With equal doses o f good thinking, good p l a n n i n g a n d good
luck, t h e people a n d governments o f Pakistan have addressed the twin challenges o f p r o d u c i n g m o r e
w h i l e simultaneously dealing with a fundamental threat to t h e natural resource base. T h e good
thinking was the application o f water science a n d economics by m a n y o f Pakistans best a n d brightest
in c o n j u n c t i o n with m a n y o f the best water m i n d s in the world. T h e solution was not t h e obvious
o n e o f lining canals a n d putting less water on the l a n d but of increasing t h e use o f groundwater, thus
both increasing evapotranspiration, d r a w i n g down t h e groundwater table a n d leaching m u c h o f t h e
salts down a n d out o f the root zone. T h e good thinking a n d good p l a n n i n g were classic public
goods. T h e good l u c k driver o f this r e v o l u t i o n was the m o d e s t but t r a n s f o r m i n g tubewell a n d
diesel engine, bought a n d managed by millions of farmers for the simple reason t h a t this decentralized
on-demand source o f water enabled t h e m to greatly increase their c r o p yields a n d incomes.

The response - institutions

A s described earlier, the hydraulic civilization of t h e Indus Valley in Pakistan was a v e r y particular
construction, c u t from quite a different c l o t h from i t s apparently-similar I n d i a n cousin to t h e east. To
the east, i r r i g a t i o n was a service p r o v i d e d to existing farmers who h a d long b e e n engaged in settled
agriculture. To the west, in the to-be-Pakistan areas there w e r e only pastoralists. T h e r e t h e r o l e o f the
State was not only to lay out the physical infrastructure, but also to construct a n entirely n e w colonial
social structure38.

All o f h i s t o r y i s p a t h dependent, but in f e w places i s the import of the i n i t i a l decisions as profound a n d

as clear as i t i s in this case, as dissected with extraordinary clarity by I m r a n Ali39, For t h e British,
especially after the a r m e d struggle o f 1857, the Punjabis w e r e the favored people o f the sub-continent.
I t was only Punjabis - a n d not groups o f any o f t h e o t h e r ethnic groups in the future Pakistan -who
were g i v e n l a n d in the canal colonies in both present P u n j a b a n d Sindh, laying the basis for s t i l l -
s i m m e r i n g perceptions o f preferential treatment by t h e State. Furthermore, t h e c o l o n i a l administration
almost universally c o n f i n e d t h e selection o f grantees to the upper segments o f village society (the
lineages t h a t controlled l a n d a n d p o w e r at the l o c a l level) a n d excluded the l o w e r status service castes.
And here another path-defining b r i c k was laid, for these same l a n d h o l d i n g castes m o n o p o l i z e d
recruitment into the colonial military, with Punjabis c o m p r i s i n g fully h a l f o f t h e entire B r i t i s h army.
T h e d t a r y thus became a m a j o r actor in the emerging hydraulic society, through substantial l a n d
grants to m i l i t a r y personnel, m i l i t a r y farms, extensive horse-breeding schemes, a n d stud farms a n d
r e m o u n t depots for the cavalry. A f t e r 1900, t h e selection process w o r k e d within the f r a m e w o r k o f the
P u n j a b A l i e n a t i o n o f L a n d s A c t , w h i c h listed hereditary l a n d h o l d i n g castes in each district, a n d
forbade l a n d transfers from agricultural to non-agricultural castes. Finally, those who w e r e rewarded
with l a n d in t h e n e w canal colonies w e r e p r i m a r i l y n o n - M u s l i m Punjabis from the east, l a y i n g the seeds
for the massive p r o b l e m s o f r e t u r n m i g r a t i o n in 1947.

T h e hydraulic state in Pakistan, then, created not j u s t infrastructure, but social fabric, a n d i t was a state
w h i c h evolved in close association with t h e military. T h e hallmark of the Pakistani water bureaucracy
at P a r t i t i o n was o n e o f discipline, o r d e r a n d t h e unquestioned supremacy o f t h e State.

As described earlier, the pressing water challenges o f Pakistan in the f i r s t decade after Independence
were to build the infrastructure necessary for water a n d energy security. G i v e n the d o m i n a n c e o f t h e

16
single trans-provincial Indus Basin a n d the need for basin-wide solutions, the logical response was
WAPDA, a parastatal g i v e n a mandate o f p l a n n i n g and budding this infrastructure a n d g i v e n the
h u m a n a n d financial resources to do so. WAPDA p r o v e d to b e v e r y successful, developing a global
r e p u t a t i o n for world-class expertise in planning, construction a n d operation.

Building institutions, however, i s not a one-shot business. Tradeoffs w h i c h were m a d e quite sensibly
a t o n e particular stage o f development, m a y not b e appropriate as opportunities a n d values change.
T h e k e y test i s w h e t h e r t h e physical a n d institutional systems are able to evolve as circumstances
change. T h e v e r y success o f o n e endeavor gives rise to n e w challenges, a n d o f t e n challenges w h i c h are
fundamentally d i f f e r e n t from those just mastered. I t i s now generally agreed that in recent decades the
m a j o r water institutions - t h e I r r i g a t i o n Departments, WAPDA - have ossified, a n d not evolved in the
face o f changing circumstances, incentives a n d demands.

L i k e all institutions, they w e r e designed to m e e t a specific need at a particular historic juncture. In the
case o f the I r r i g a t i o n Departments, the challenge o f the 1 9 t h century was to put in place a low-cost
extensive u n l i n e d canal system w h i c h c o u l d spread the then-abundant water onto a v e r y large area at
minimal cost for t h e p r o d u c t i o n o f foodgrains. T h e reasonable result was a system w h i c h h a d little
ability to regulate flows within t h e channel systems or for flow measurement at either t h e main, b r a n c h
or distributary levels a n d w h i c h ensured that p a i n was equally spread through a n inflexible time-based
allocation system. Some defects w e r e cumulative a n d became apparent a n d i m p o r t a n t o v e r time. T h e
rigid a n d simple wurubundi rules h a d m a n y virtues, but also - l i k e all h u m a n endeavors - vices. A
m a j o r issue was t h a t a time-based distribution system w h i c h did not take account o f large canal losses
ended up heavily discriminating against tail-enders. T h e take it w h e n w e give it; a n d use i t or lose it
p h i l o s o p h y o f wurubundi also m e a n t t h a t the system became less aligned with the needs o f irrigators as
water became scarce, a n d as farmers shifted to varieties a n d crops w h i c h w e r e m o r e sensitive to the
timing o f water inputs. Farmers, as everywhere, adapted in ways t h a t t h e y c o u l d - by trading wurubundi
turns in t h e distributaries, and, eventually, by b e c o m i n g heavily reliant on groundwater w h i c h they
c o u l d c o n t r o l m u c h better.

T h i s involution (to use Clifford Geertzs cultural anthropological construct40) m e a n t that t h e

I r r i g a t i o n D e p a r t m e n t s slowly but surely shifted their focus from b e i n g a good service p r o v i d e r to
b e i n g concerned substantially with ways in w h i c h the D e p a r t m e n t c o u l d serve the needs o f the people
in it. A greater a n d greater a m o u n t o f t h e real attention o f t h e I r r i g a t i o n D e p a r t m e n t s was p a i d to the
e m p l o y m e n t provided, a n d the opportunities for r e n t w h i c h c o u l d b e extracted at all levels. T h e iron
+
equation o f rent-seeking (monopoly discretion - accountability = corruption) was at work even in
colonial time: T h e s u b o r d n a t e bureaucracy was i n v o l v e d extensively in perquisites from agricultural
owners. T h e larger a n d m o r e p o w e r f u l t h e latter, the m o r e concessions they c o u l d obtain from
corruption. This o c c u r r e d in essentially two features: first, greater a n d i n o r d i n a t e access to irrigation
water; a n d second, underassessment o f water rates. This situation was exacerbated in Sindh, with m o r e
l a n d u n d e r large landowners.41

A f t e r Independence, this process was deepened a n d strengthened. T h e I r r i g a t i o n D e p a r t m e n t s (a)

maintained (to this day) their monopob status; (b) developed ever-higher levels o f discretion (so that at
each level in each o f t h e systems there are j u s t a f e w people - sometimes o n e - who decide exactly
how a n d why water i s distributed to t h e various canals in the ways i t is) a n d ensuring t h a t t h e water
records remained (and remain) i n t e r n a l rather t h a n p u b l i c records; a n d (c) c o n c u r r e d with t h e
cumulative upping o f t h e who pays balance away from t h e user a n d towards the budget, thus
creating a larger a n d larger discrepancy b e t w e e n t h e cost a n d value o f w a t e r (and thus a larger a n d
larger space for arbitrage) a n d less a n d less uccotmtubi&y to users. T h e e n d results are somewhat
different in d i f f e r e n t areas, a n d always there are good people at various levels who push to hold the
incentive structure at bay. But the systemic result i s clear. T h e original discipline o f t h e wurubundi is
severely damaged, with direct outlets constituting up to 30% of flows in s o m e canal commands.

17
T h e rents extracted are huge: at the top o f the feeding c h a i n in some provinces crores of rupees
allegedly are p a i d by officials for positions; at the executive engineer l e v e l offers o f clean jobs at four
times t h e salary are rejected because o f t h e m a j o r l o s s o f i n c o m e (formal a n d mostly informal) this
would entail. Put all o f this on top o f a system w h e r e inequality (the so-called feudal problem) was
built in from t h e start a n d i t i s not surprising that the single most striking feature to experienced
outsiders i s the v e r y high level o f mis-trust in the water management system of Pakistan. T h e
c o n t e m p o r a r y situation i s summarized w e l l by I m r a n Ali: with declining administrative efficiencies,
overstretched organizational resources, degraded service delivery, a n d unchecked corruption, there
appears to b e a glaring failure o f centralized irrigation manage men^"^^

WAPDA has a shorter history d r i v e n by the original p l a n n i n g a n d c o n s t r u c t i o n of m a j o r infrastructure

mission. I t p e r f o r m e d this heroically, in m a n y respects, with a n organization o f high morale a n d
competence building M a n g l a a n d Tarbela, and, in t h e process o v e r c o m i n g enormous technical
challenges w h i c h threatened the integrity o f structures w h i c h have served t h e c o u n t r y so well. With
the i m m i n e n t c o m p l e t i o n o f Indus B a s i n Project a n d Tarbela dam, t h e countrys emphasis shifted to
addressing water logging a n d salinity problems, both o f w h i c h were i n c l u d e d in WAPDAs founding
A c t . In 1973, the federal government launched a n accelerated program o f water logging a n d salinity
c o n t r o l (SCARP Program). WAPDA, w h i c h h a d s k i m m e d o f f the cream o f the technical expertise
earlier available in t h e I r r i g a t i o n Departments, was the natural choice to play the lead role in the
c o n s t r u c t i o n o f S C A R P S as w e l l as n e w canals that cross p r o v i n c i a l boundaries. W h i l e federal
resources for the SCARP P r o g r a m were allocated to t h e provinces, they w e r e obliged to use WAPDA
as the contractor. C o m p l e t e d works were handed o v e r to the I r r i g a t i o n Departments, who took
o v e r O&M responsibility, invariably with reluctance a n d reservations. Besides operating a n d
m a i n t a i n i n g the existing three m a j o r reservoirs, WAPDA continues to p e r f o r m some o f these n e w
responsibilities to date, e v e n though t h i s takes opportunities for the I r r i g a t i o n D e p a r t m e n t s to develop
their own capacity. With t h e ongoing r e f o r m s o f WAPDAs P o w e r Wing a n d the advent o f the
drought a n d emerging water shortages, WAPDA has o n c e again b e e n thrust into the limelight. T h e
residual W a t e r Wing of WAPDA has shifted i t s focus towards developing water resources envisaged in
i t s ambitious Vision 2025. WAPDA i s constructing several m e d i u m size reservoirs as w e l l as m a j o r
i r r i g a t i o n extension projects (Greater T h a l a n d K a c h i canals), w h i l e p l a n n i n g for a n d advocating m a j o r
n e w reservoirs.

I n m a n y ways these k e y institutions

o f the hydraulic state o f Pakistan I I
resembled a n d in some cases were
m o d e l e d after, similar institutions in
developed countries w h i c h h a d used
water infrastructure as t h e p l a t f o r m
for growth in a r i d lands. And as
with all such countries - i n c l u d i n g
the U S A , Mexico, Brazil, South
Africa, Egypt, India, Thailand,
Australia a n d C h i n a - t h e process of
institutional change has b e e n
protracted, fitful, d i f f i c u l t a n d
incomplete. In t h e process o f a I
similar r e v i e w with t h e World B a n k Figure 19: Rates o f return on investment on
in China, the G o v e r n m e n t o f C h i n a infrastructure and management of water resources
Source World 0mk 2W3
developed a useful schematic
representation (Figure 19) o f t h e

18
institutional challenge in moving from a n era, Stage 1 in w h i c h building infrastructure i s t h e
d o m i n a n t challenge, to Stage 2, where infrastructure s t i l l h a d to b e built, but maintenance and
management o f existing infrastructure a n d resources become the primary challenge.
Long as t h e distance i s to go, Pakistan has made some very i m p o r t a n t progress in some critical areas.

Institutions are not just organizations, but the rules o f t h e game w h i c h g o v e r n relationships a m o n g
organizations a n d people.43

T h e m o s t fundamental o f the instruments w h i c h affect water management are those w h i c h define who
i s entitled to do w h a t with water. At t h e apex level there i s the Indus Waters Treaty w h i c h defines,
unambiguously a n d in perpetuity, the water that belongs to Pakistan. O n e of the great virtues o f the
T r e a t y was that by the clarity o f definition, a n d the permanent nature o f the rights so established, i t
m o t i v a t e d I n d i a and Pakistan to focus on how they would use the water that was theirs (and not on
endless distracting haggling about w h a t water they should have). Recent differences on differences
w h i c h have arisen in t h e interpretation o f the Indus Waters Treaty have c o n f i r m e d the foresightedness
o f t h e framers of the Treaty (who set up well-defined mechanisms for dealing with these) but have also
suggested that there i s room for m o d e r n i z i n g the bilateral dispute resolution mechanism so that
questions can b e resolved in a m o r e predictable a n d t i m e - b o u n d manner by t h e Indus Waters
Commission.

In a system where most depend on a single river system, clarity on entitlements at the n e x t level down
- between provinces - was equally i m p o r t a n t and, in m a n y ways, equally disputatious. Starting in 1935,
there w e r e a series of high-level commissions constituted f i r s t by the British a n d t h e n Pakistani
governments to try to get a lasting agreement on the division o f the Indus system waters a m o n g the
provinces. A f t e r m a n y failed attempts, in 1991, agreement was reached on t h e provincial entitlements
to waters o f the I n d u s Basin (see Box 1 from the background paper from Faizul Hasan44). This Water
A c c o r d i s a great achievement since i t defines, unambiguously and in perpetuity, the shares o f available
water w h i c h can b e used by each o f t h e provinces. I t i s worth re-counting the bases for t h e Accord.
T h e basis for entitlements was prior existing uses: the record o f actual average system uses
for the p e r i o d 1977-1982 would form t h e g u d e l i n e for developing a future irrigation pattern.
These ten daily uses would b e adjusted pro-rata to correspond the i n d c a t e d seasonal
allocations o f the different canal systems a n d would form the basis for sharing shortages a n d
surpluses. This meant that the existing uses o f water supplies to the provinces, w h i c h they
have so far been getting as a d h o c allocations, r e m a i n untouched.
T h e A c c o r d specifies a n automatic process for adjusting entitlements depending on
availability. These t e n daily uses would b e adjusted pro-rata to correspond t h e indicated
seasonal allocations of the different canal systems a n d would form t h e basis for sharing
shortages a n d surpluses.
In case a p r o v i n c e was not in a position, for t h e t i m e being, to make full use o f i t s allocation,
that surplus m a y b e used by another p r o v i n c e without acquiring a right to it.
T h e Provinces were, in law, g i v e n freedom by the A c c o r d to use their allocation in any w a y
that they want: there would b e no restrictions on t h e Provinces to undertake n e w projects
within their agreed shares a n d the provinces will have the f r e e d o m within their allocations
to modify system-wide a n d period-wise uses. I n practice, however, t h e fact that provincial
entitlements were explained as aggregates o f specified historical uses in different canal
commands meant that the A c c o r d was thus i m p l i c i t l y specifying t h e distribution o f t h e
provincial shares to each o f t h e existing canal commands, allocations which, in Punjab at least,
are f o l l o w e d to this day. Similarly t h e historic allocations within each canal c o m m a n d a m o n g
the distributaries i s also defined historically a n d f o l l o w e d a n d similarly down to t h e outlet
level, b e l o w w h i c h t h e warabandi system specifies shares.

19
 W h a t this i m p l i e s i s t h a t in m a j o r parts o f t h e Indus B a s i n i r r i g a t i o n system there are, in fact,
well-defined entitlements at all levels, f r o m t h e international, through t h e inter-provincial,
down to canal commands, distributaries a n d outlets a n d ultimately to each f a r m e r on a water
course.

Box 1: T h e Water Accord of 1991

There was an agreement that the issue relaung t o apporuonment o f t h e waters o f the Indus F h e r System should be
settled as quickly as possible. In the light o f the accepted water distributional principles, the following apporuonment
(in MAF) was agreed to:

ICharif Rabi Total

Punjab 37.07 18.87 55.94
Sindh* 33.94 14.82 48-76
NWFP 3.48 2.30 5.78
Balochistan 2.85 1.02 3.87
Civil Canals** (NWFP) 1.80 1.20 3.00
Grand Total 79.14 38.21 117.35
* Including already sanctioned Urban and Industrial uses for Metropolitan I<arachi.
** Ungauged civil canals above rim stations.

Under Section 14 (b),the record o f actual average system uses for the period 1977-82 would form the guideline for
developing future regulation pattern. These ten daily uses would be adjusted pro-rata t o correspond t o the indicated
seasonal allocations o f the different canal systems and would f o r m the basis for sharing shortages and surpluses on all
Pakistan basis.

Balance river supplies, including flood supplies and future storages, shall be distributedas 37% each t o Punjab and
Sindh, 12% t o Balochistan and 14% t o NWFP.

The need for certain minimum escapage t o sea below I<otri t o check sea intrusion was recognized. Sindh held the
views that the optimum level was 10 lMAF which was discussed at length, while other studies indicated lower/higher
figures. I t was, therefore, decided that further studies would be undertaken t o establish the minimal escapage needs
downstream K o t r i .

All efforts would be made t o avoid wastages. A n y surplus used b y province w o u l d n o t establish a right t o such uses.
I

This well-established set of w a t e r entitlements i s a tremendous institutional asset for Pakistan as i t

m o v e s towards m o d e r n w a t e r management. T h a t said, t h e entitlements h a v e not b e e n implemented, at
any level, with transparency a n d accountability. This has b r e d wide-spread b e l i e f t h a t t h e discretion,
w h i c h i s always present w h e n there i s no transparency, i s w i d e l y abused. T h e extent of actual abuse
remains unclear - officials will, in one breath, say t h a t administration i s by t h e book at a l l levels, a n d
t h e n say t h a t a m o v e t o w a r d s transparency will b e o p p o s e d because i t will reduce t h e discretion w h i c h
officials have b e e n u s e d to exercise a t a l l levels. I f existing entitlements a t a l l levels w e r e publicized,
a l o n g with actual flows, a n d if t h i s was d o n e in a w a y such t h a t t h e i n f o r m a t i o n was easily accessible,
a n d comprehensible to, l a y people, t h e n a great deal of t h e discretion, c o r r u p t i o n a n d m i s t r u s t would
evaporate. In addition, farmers e q u i p p e d with reliable i n f o r m a t i o n on w h a t t h e y would get each
season a n d confidence t h a t it would actually be delivered, would b e able to i m p r o v e substantially the
returns to t h e c r o p s t h e y grow. And, o f course, there would b e m u c h greater pressure on t h e
I r r i g a t i o n D e p a r t m e n t s for actually providing t h a t to w h i c h users are entitled.

T h e installation o f a telemetry system a t a l l barrages a n d headworks o f canals i s a v i t a l f i r s t step in t h i s

process. With periodic, credible calibration, a n d p u b l i c access to t h e d a t a on t h e internet, t h i s will
substantially i m p r o v e p u b l i c c o n f i d e n c e in t h e i m p l e m e n t a t i o n o f t h e W a t e r A c c o r d . W e return to t h i s
theme, a n d t h e e x c i t i n g possibilities for progress, in Section I1o f t h i s R e p o r t .

20
Finally, a profound institutional change o v e r the last thirty years throughout t h e subcontinent has b e e n
the de-formalization o f the water economy. Recall t h a t o v e r the past 20 years, 75% o f t h e expansion
o f irrigated area has b e e n outside o f the f o r m a l system a n d d r i v e n by the i n d i v i d u a l decisions a n d
investments o f millions o f farmers. I n m a n y ways this de-formalization has b e e n a great success. But
nothing lasts forever, a n d now i t i s clear that the laissez-faire attitude to groundwater exploitation,
w h i c h w o r k e d so w e l l in recent decades, will not work now t h a t t h e challenge has changed from under-
e x p l o i t a t i o n to i n c i p i e n t over-exploitation o f m a n y aquifers. T h e formal institutions have not b e e n
doing v e r y w e l l in their home territory (providing services a n d m a i n t a i n i n g their infrastructure); now
they will not only have to i m p r o v e greatly there, but also gear up for the n e w a n d v e r y d i f f i c u l t task o f
conjunctive use of surface a n d groundwater, a n d co-managing these in collaboration with the users
(discussed in detail in Section 11).

21
There has been m u c h deliberation in Pakistanin recent years on how to re-orient the State to meet the massive
water development and management challenges. At the National level, t h i s includes deliberations reflected in the
T e n Year Perspective Plan (Plantlmg Commission 2001), the National Water Policy ( M m s t r y of Water and
Power, D r a f t 2002) and the latest of October 2002, the PakistanWater Sector Strategy Study by the M i n i s t r y of
Water and Power, which includes three main documents: T h e National Water Sector Profle, which summarizes
and de& all aspects of the water availability and utilization as they exist today; T h e National Water Sector
Strategy, which identifies the key issues and objective for the water sector and proposals for plantlmg,
development and management of water resources and their use in all water sub sectors; and the Medium T e r m
Investment Plan (MTIP), which identifies the key programs and projects which should be undertaken up by 2011
and which are desgned to achieve the initial objectives of the Strategy.

As summarized in the background paper by Sardar Taiiq and Shams ulM a two of Pakistans most eminent
water practitioners, the core issues emergmg from these documents are:
T h e desirability o f attaullllg hnancial sustainability
Defirung clearly the water rights and entitlements both for surface and ground water
Creaung t r u s t and transparency in equitable water distribution and improving services
Ration- water charges and increasing productivity
Cleating huge back log of maintenance and modernizing the existing infrastructure
Developing additional infrastructure for storage, distribution and delivery

I t is to these and related challenges, and the responses they demand, that we now turn our attention.

Adjusting to the needs of a changing Pakistan

Pakistan is in the throes o f profound demographic a n d economic changes, w h i c h have m a j o r
implications for water management.

First, there are m a j o r changes within agriculture a n d rural areas. Until relatively recently, as described
by Shahid Ahmed45, agriculture was characterized by low cropping intensity a n d p r o d u c t i o n
dominated by low-water requirement crops like food grain (wheat, maize, sorghum, a n d millets, pulses
a n d oilseeds). . . . During the last decade, however, the pressure on water has drastically increased, with
m o r e competition for quantity a n d quality of irrigation water within t h e irrigation sector. T h e r e is
now the emergence of a class o f farmers known as progressive farmers, who are growing high-value
crops for both domestic a n d export markets, a n d who have leapfrogged out o f the old brute force
type o f agriculture into precision agriculture, in w h i c h water plays a central role not just in
evapotranspiration, but as a mechanism for delivering ferthzers a n d pesticides to crops. Incipient as
i t is, there i s already evidence that this agricultural diversification i s transforming the countryside in
m a n y ways. As in other parts o f the world, this agricultural diversification transforms r u r a l life (and
water management) in m a n y ways. High-value crops produce many m o r e jobs per drop of water a n d
per unit o f l a n d than traditional crops (Figure 20). And they have deeper ripple effects into the rural
economy, both backward (since they d e m a n d m o r e inputs) a n d forward (since they give rise to a
variety o f o f f - f a r m processing activities). These changes are spurring substantial employment
challenges within rural areas, with about 30% of people in rural areas already dependent on non-
agricultural sources o f income46. Contract farming, o f t e n l e d by progressive farmers, i s likely (as it

22
has in other countries4')
to b e a n i m p o r t a n t
mechanism for bringing
u n i f i e d packages of B Rainfed Irrigated
technology, services a n d
marketing, in m a k i n g t h e
transition to high-valued 250
agriculture, a n d in lifting
200
large numbers o f people
- both those who stay in 150
agriculture a n d those who 100
m o v e into the associated
50
service sectors - out o f
poverty. 0

I n short, rural areas in

m a n y parts of Pakistan
are changing in
fundamental ways,
Figure 20: Employment Generation by Crop
captured in vivid prose by
Akhter Hameed Khan, Source: Bhatia, 2005
the -great observer a n d
social activist: n"(I the) rural areas o f Pakistan.. .the subsistence e c o n o m y has given w a y to a cash
economy. E d u c a t i o n has changed people's attitudes. N e w professions, business a n d commerce have
created n e w relationships a n d the 'culture o f poverty' i s dead or dying. G o v e r n m e n t inputs, however
inadequate a n d badly implemented, have changed t h e physical a n d social environment. , , ,.the changes
that have taken place, have created a n e w society and a n e w culture . , ,"4*

Second, there are m a j o r demographic and economic changes taking place. P o p u l a t i o n growth (Figure
21) i s very high - from 80 million people in 1980 the p o p u l a t i o n will b e 230 million in 2025. This
means that aggregate water demands have increased sharply a n d will continue to do so.
Simultaneously, Pakistan i s urbanizing rapidly -- the percent o f the p o p u l a t i o n w h i c h lives in u r b a n
areas has doubled over the past 20 years, a n d the absolute size o f t h e u r b a n p o p u l a t i o n has increased
by a factor o f 3.5, going from 20 million in 1980 to 70 million in 2000 (Figure 22). Associated with
t h i s urbanization i s a r a p i d increase in t h e role o f manufacturing (Figure 23) w h i c h now contributes
about the same as agriculture to the GDP o f Pakistan. P o v e r t y declined during the 1980s but has
stagnated until recently (Figure 24).

23
 250 , I

200 0
Population Urban
150 pOpulaticm 40
(mil I ions) (m I IIons)
100 20
50 0
0 1980 1990 2000

1980 1990 2000 2025*

Figure 22: Urban population growth in absolute numbers

Source Sirgmonn and Shrmd 2005

Figure 21: Population Growth in Pakistan
Sourre. Sirgmonn and Shrmd 2005

10 Urban 0 Overall Rural]

40

30
%
20

10
1980 1990 2000 n
1984-85 1987-88 19912-91 1993-94 1998-99 2001-02

Figure 24: The Prevalence o f Poverty in Pakistan

Figure 23: Proportion o f GDP in manufacturing

Sourrr' S q m m n and Shrrad 2005

These changes of scale, location a n d c o m p o s i t i o n h a v e profound implications for water management

in t h e future. Most obviously they will m e a n a M a l t h u s i a n arithmetic, in w h i c h growing demands will
put unprecedented pressure on a l i m i t e d quantity o f available water. But it also means that demands
that c o u l d once c o m f o r t a b l y b e m e t at a local level will start h a v i n g regional implications, a n d thus
implications for o t h e r sectors. All m a j o r cities o f Pakistan, with t h e exception o f Islamabad a n d
Karachi, depend on tubewells w h i c h tap local aquifers for their r a w water supplies. Lahore, for
example, has 300 wells that supply the city with water. This arrangement functioned w e l l as long as t h e
cities were small a n d the aquifers were not contaminated. But now the explosive growth in demand -
w h i c h i s expected to grow from 4% to 15% of aggregate water d e m a n d in t h e next twenty years49 --
has m e a n t that local aquifers are b e i n g d r a w n down v e r y fast. And m o r e ominously, large quantities
o f untreated, o f t e n highly toxic m u n i c i p a l a n d industrial wastes are b e i n g d u m p e d in o p e n drains, a n d
are leaching down into t h e aquifers. As discussed in m o r e detail in the section on the environment
later in t h i s report, m o r e t h a n 90% o f m u n i c i p a l a n d industrialwastes are simply dumped, untreated.,
into the local aquatic environment with no treatment with m a j o r consequences for the environment
a n d h u m a n health now, a n d since natural aquifer cleansing takes place over decades or even centuries,
for v e r y long periods into t h e future.

24
Finally, there i s a growing understanding that there are major environmental needs for water - in
sustaining rivers, wetlands and coastal areas, including the Indus D e l t a (discussed in the later section
o n the environment). A s understanding a n d i n c o m e grows so these needs ( s t d l o f t e n described as
wastage, as in wastage to the sea) will become important claimants on the ever-scarcer resources
o f the country.

In summary, then, in the past water resources management in Pakistan was largely synonymous with
management o f water for irrigation. W h i l e irrigation will continue to use the majority o f water in the
foreseeable future, management o f water resources in Pakistan will become a m u c h m o r e multi-
sectoral affair. Water use for towns and industries will become a m a j o r local a n d regional issue, a n d
the use o f water for environmental purposes will demand m o r e water a n d m o r e attention. And issues
of water quality will grow to b e as i m p o r t a n t as issues o f quantity. Water managers in Pakistan should,
like their counterparts in India, b e bracing for a turbulent futureso.

Preparing for climate change

T h e r e are strong indications that climate change i s likely to affect Pakistan in a n u m b e r o f ways.
T h e r e i s m u c h uncertainty about some, a n d little uncertainty about other o f these impacts.

T h e Indus basin depends heavily on the glaciers o f the western Himalayas w h i c h act as a reservoir,
capturing snow a n d rain, holding the water a n d releasing i t into the rivers w h i c h feed the plain. I t i s
now clear that climate change i s already affecting these western glaciers in a dramatic fashion (far m o r e
seriously, for example, than in the damper Eastern Himalayas). W h i l e the science i s s t i l l in its infancy,
best estimates (Figure 25) are that there will b e fifty years of glacial retreat, during w h i c h time river
flows will increase. This - especially in combination with predicted m o r e flashier rainfall -- is likely to
exacerbate already serious problems o f flooding a n d draining, especially in the l o w e r parts o f the basin,
in the n e x t f e w decades. But t h e n the glacial reservoirs will b e empty, a n d there are likely to b e
dramatic decreases in river flows- as shown in Figure 25, conceivably by a terrifying 30% to 40% in
the Indus basin.

Deglaciation is, o f course, not the only w a y in w h i c h climate change i s likely to affect the availability
a n d timing o f runoff in the sub-continent. T h e Intergovernmental Panel o n Climate Change (IPCC)
uses t e n General Circulation models, n i n e o f w h i c h project that precipitation during the summer
monsoon will increase substantially (Figure 26).

25
I 1
lDo
lndus at Sknrdu
I

Figure 25:Accumulated effects o f deglaciation on Indus

river flows over ten decades
R e a et a1 2005

1 2 3 4 5 6 7 8 9
Model

Figure 26:
Change in South Asia summer rainfall predicted
by nine General Circulation Climate Models Ipcc,ZM)4

26
T h e IPCC has used a
regional m o d e l (curiously
based o n the o n e global .D"

m o d e l w h i c h showed
reduced precipitation) to 35H

explore possible changes

in the n u m b e r o f rainy
SOH
days a n d in extreme
rainfall in I n d i a (with
obvious extrapolations 25li

to Pakistan). This m o d e l
predicted a decrease in 20"

the n u m b e r o f rainy days

(Figure 27) but 1JH

substantial increases in
extreme precipitation
events (Figure 28).
11M

W h a t does seem likely i s sn

that climate change will

increase t h e variability o f
already highly-variable Figure 27: Predicted change in number of rainy days
rainfall patterns, from the "decreased rainfall" IPCC model IPCC
requiring greater
investments in managing
both scarcity a n d floods.

From this fog o f

i n f o r m a t i o n the following
conclusions emerge very
clearly:

De-glaciation i s
going to result in
inadvertent
"mining" o f the
water banks o f the
Himalayas. This i s
going to result in
increased runoff
(and silt loads) for
a f e w decades, to
b e f o l l o w e d by
major, permanent,
reductions in
runoff. Figure 28: Predicted change in rainfall intensity (in mm
Climate change i s per day) from the "decreased rainfall" IPCC model
likely to IPCC
substantially
increase overall m o n s o o n a l rainfall in Pakistan, but this i s likely to b e poorly distributed in t h e
sense that m u c h o f the additional rainfall i s likely to b e in high-intensity storm events.

27
 T h e area affected by flooding, i s likely to increase substantially in c o m i n g decades as the
glaciers m e l t and as rainfall intensity increases.;
Water scarcity i s forecast to become widespread in Pakistan in a future w h i c h is, given the fact
that changing water use habits takes decades to effect, just around the corner. T h e n e x t
several decades offer a window of opportunity, in w h i c h there i s likely to b e m o r e water, to
prepare for a future in w h i c h the quantity o f water available i s likely to b e substantially
reduced.

What, then, are the implications o f these changes? Despite the m a n y uncertainties, they include:
A need for large investments in water storage. As described earlier, Pakistan actually has relatively
little capacity to store water. For example, whereas there i s about 900 days o f storage capacity on the
Colorado a n d Murray-Darling Rivers, there i s only about 30 days of storage capacity in the Indus
basin. Accordingly m a j o r investments need to b e made to increase capacity to store water, in both
surface and groundwater reservoirs, in projects small (such as local rainwater harvesting) a n d big (such
as large dams). In so doing, however, there i s a need for concomitant adoption o f quite different
development a n d management strategies. I t must b e understood that storage projects should primarily
b e for improving the reliability o f supplying existing demands and for meeting historically deprived
environmental uses, a n d not for creating a n d serving n e w demands (which simultaneously inevitably
means curtailing existing downstream uses.)

T h e m e l t i n g o f the glaciers offers Pakistan a window o f opportunity, first, to make productive use o f
t h i s windfall, but also to understand that t h i s window should b e used to prepare for the very h a r d
days, with substantial flow reductions in the Himalayan region, w h i c h lie ahead.

W h i l e the exact shape o f the future climate regime i s uncertain, i t i s very likely that there will b e greater
variability - both o f droughts a n d floods. As was shown in a detailed examination by t h e N a t i o n a l
Atmospheric a n d Oceans Administration of US water practices, the best preparation for managing
unpredictable future changes i s to put in place a water resource infrastructure and management system
w h i c h i s driven to a m u c h greater degree by knowledge (including but not l i m i t e d to hydrologic
knowledge), a n d w h i c h i s designed a n d operated to b e m u c h m o r e flexible a n d adaptive.
Flooding, w h i c h already affects substantial areas o f Pakistan (including areas in a n d outside o f the
Indus Basin), has yet to b e effectively addressed. Pakistan i s only now starting to explore the
combinations of hard interventions (to protect high-value infrastructure) a n d soft interventions
(smart adaptation to living with floods, including changing in l a n d use patterns a n d c r o p p i n g patterns,
a n d construction o f emergency shelters for people a n d animals), w h i c h have been used to considerable
effect in countries as diverse as the U n i t e d States51 a n d Bangladeshszand are globally-accepted best
practice.

Adapting to scarcity: An imminent water gap

Pakistan i s close to using all o f i t s available water resources in m o s t years. Shahid Ahmed53 has
summarized the situation as follows: The l o n g - t e r m sustainable average annual n e t inflow o f the
I n d u s Basin i s 175 billion m3.Canal diversions over the same p e r i o d have averaged 128 billion m3, with
a n average o f 35 billion m3 flowing downstream o f Kotri Barrage to the sea.. . I n a system with little
storage and considerable variability, however, averages can b e deceptive -- Figure 29 shows, again in
Ahmeds words, that Pakistan i s now essentially at the limit o f i t s surface water resources.

28
 200
I Figure 1 Annual Canal Diversion and Escapages to the Sea

150

-2
;
;100
-P
Y

50

0
1975-76 1979-80 1983-84 1987-88 1991-92 1995.96 1999.00 2003-04
Years

W Existing Canal Diversion 0 Escapages to the Sea

Figure 29: Annual Canal biversions and Escapagest o the Sea

Source. World Bank analysis

Similarly, on groundwater54:
Estimates of groundwater
availability have been made in 160 1 I
several studies, and average around 140
63 b i l l i o n m3. Abstraction of 120 Industry
groundwater for irrigation and for
100
urban and rural drinking water
supplies i s estimated as about 52
4I 80
IMunicipal and rural water
supply
b i l l i o n m3, W h d e these figures m a y 60 0 Agriculture at the
suggest some potential for further 40 Farmgate
exploitation, they are based on very 20
little actual m o n i t o r i n g o f the 0
resources or the abstraction and 2003 2025
should be treated with caution.
O t h e r evidence, such as increasing
salinity o f groundwater due to
Figure 30: Projected demands for water
redistribution of salts in the aquifer
and declining water levels, suggests
Source: Hason 2005
that there i s little, i f any, further
potential for groundwater
exploitation..

T h e b o t t o m line i s clear -- Pakistan i s currently close to using all o f t h e surface a n d groundwater that it
has available, yet it i s projected that over 30% m o r e water will b e needed over the n e x t 20 years t o
m e e t increased agricultural, domestic and industrial demands (Figure 30).

29
Getting more product per drop: The pe rmance gap
T h e r e are several
corollaries to the fact o f
looming water scarcity in 8 1.2
Pakistan: the focus o f
attention will have to 7 1
shift from productivity 6
p e r unit o f l a n d to 0.8 5
5
productivity p e r unit o f 2 E
water, and the m a j o r $ 4 0.6
challenge will b e to get 8 a
3
\

m o r e from less - m o r e
0
0.4
crops, m o r e income, 2
m o r e jobs p e r unit of 0.2
water.
1
A basic point o f 0 0
departure i s that there i s ImperialValley, USA Bhakra, India Punjab, Pakistan
abundant evidence that
irrigated agriculture in
Figure 31 Wheat yields per unit o f land and water
Pakistan i s not efficient.
Source: Ahmod 2005
As shown in Figure 31, a
comparison o f wheat
yields in California, USA, the I n d i a n Punjab and the Pakistani Punjab shows that productivity in
Pakistan relative to I n d i a and California i s about 3:6:10 p e r unit o f land, and about 5:8:10 per unit o f
water.

A second i m p o r t a n t
m a c r o perspective Fig 4. Wheat Yield (MTlHa)

emerges from data 3 000

analyzing the
2 500
relationship between
overall water availability 2 000
a n d production. As
shown in Figure 32, I
drought has a dramatic 1000
I
i m p a c t on p r o d u c t i o n in
non-irrigated areas, but O 500

remarkably little i m p a c t 0 000

in irrigated areas. This i s

c o n f i r m e d in Figure 33, b g g k a i g $ g $ T & g g
8 2
w h i c h shows the very
-Punjab -Sindh NWFP -0alochistan -Pakistan
modest i m p a c t o f
drought on irrigated Figure 32: Drought has a dramatic effect on yields in
crops and, indeed, by the non-irrigated provinces, but little in irrigated provinces
p r o d u c t i o n figures for Source World Bonk 2003

April o f 2005. Despite

a n unusually dry

30
o f production levels as low as 12 million tonnes, Pakistan has had a bumper wheat crop: overall
production was 22 million tonnes, 10% higher than the governments target55. These data suggest that
irrigation i s obviously vital for high and stable levels o f crop production and that a lot more efficiency
(crop per drop) can be squeezed out o f the system.

As pointed out by
Shahid Ahmadjo, the
most important basic
principle in irrigation i s
to deliver a reliable
supply o f water. In a n
uncertain environment,
farmers will not invest in
seeds, fertilizers, and
land preparation, and
consequently yields and
water productivity will
suffer. A second basic
principle has to do with
timing. At various times Figure 33: C r o p p r o d u c t i o n and d r o u g h t s~ypc.: WDr,d Bonk 2 w J
in a crops growth cycle,
water stress can be particularly damaging. In principle water entitlements for all users o f an outlet are
equal under the warabandi system; in fact numerous studies have shown that there i s a high degree o f
maldistribution which favors head-enders and discriminates against tail-enders, with serious
implications for equity and productivity. Within watercourses, tail enders typically get about 20% less
water than those in the middle, who in turn get about 20% less t h a n head-ended. Figure 34 shows
how head-enders systematically do much better than tail-enders and Figure 35 shows that there could
be major overall production gains by re-distribution o f water currently used in excess by head-enders.

9000 ,
8000 -
O f 1

Head Mddle Tail

Wheat IRRl Rice Basmati Rice Sugarcane (xf0)

Figure 35: How returns t o irrigotion vary by location in a cana
Figure 34: Crop yields for head and tail-enders
Lvct h,lC 2M5
SOYICL Quruh8 2WI

A detailed analysis by IWMI 58 (Figure 36) shows that inequity in water distribution in t he Pakistani
Punjab i s substantially worse than i t i s in the I n d i a n Punjab. At the high productivity end, farmers in
Pakistan are doing at least as well as farmers in India, but the spread between high- and low-yields i s

31
m u c h greater in Pakistan, d u e in p a r t to m o r e unequal w a t e r distribution. These inequalities play a n
i m p o r t a n t r o l e in t h e explanation o f t h e l o w e r p r o d u c t i v i t y o f t h e Pakistans i r r i g a t i o n systems. W h e n
these supply uncertainties are resolved, t h e impacts on p r o d u c t i v i t y c a n b e v e r y large: t h e p r o d u c t i v i t y
o f water from tubewells (available on demand) i s twice t h a t o f canal water.59

1
Indian Punjab

8
7
Pakistan Punjab
I:
Bf 2
1
0
FA0
wrsuw kcllron
Mp;mun +!a M.n NLnimun

Figure 36: Differences in wheat yields across distributaries is

much greater in Pakistan Punjab than Indian Punjab
Source: I W M I 2003

For these reasons, there i s b r o a d agreement t h a t the most promising i n t e r v e n t i o n i s to p r o v i d e

equitable w a t e r distribution to t h e head- a n d tail-end reaches60, with t h e issues o f transparent
administration o f w a t e r entitlements a n d accountable, efficient provision o f i r r i g a t i o n services again
b e i n g key.

T h e r e i s also growing
evidence t h a t d i f f e r e n t
water application 0t o m h e kglm3,
regimes c o u l d greatly
5 2
increase t h e a m o u n t o f 4.5 1.8
crop p e r drop. 4 1.6
3.5 1.4
Studies c o n d u c t e d by 3
PARC a n d I W M I 2.5
2
indicated t h a t 1.5 0.6
extensification rather 1 0.4
0.5 0.2
t h a n intensification 0 0
c o u l d greatly increase Rainfed Fanners Full Deficit
productivity. As Practice Supplemntal Supplemental
shown in Figure 37, Irrigation Inigation
deficit a n d
supplemental i r r i g a t i o n Figure 37: Yield and Water Productivity of Wheat
produce m u c h higher under Different Irrigation Scheduling Strategies
returns p e r unit o f Source: Ahmod2005

32
water compared to complete irrigation under farmers practices and rainfed farming systems. T h e
deficit a n d supplemental irrigation h a d increased the water productivity two-to-three folds compared to
rainfed systems. 61

In situations o f water scarcity, however, i t i s i m p o r t a n t to look at productivity not just in terms o f u n i t s

o f water applied, but to take into account that return flows to sweetwater aquifers are not losses, but
water that i s s t i l l available for other uses and users. (This i s a concept that has long been applied in the
sub-continent -- for example, in the 1950s Indus Waters Treaty discussions o f the n e t effects o f
upstream abstractions in K a s h m i r on the availability o f water from the Jhelum and Chenab.)

Consider the basic arithmetic of local water balances under equilibrium as shown in t h e equation
below:

A p p l i e d water = Consumed water + non-consumed water;

Consumed water = beneficial evapotranspiration +
non-beneficial evapotranspiration;
+
N o n - c o n s u m e d water = water recharging the aquifer water returning to streams.

N o w consider three issues o f productivity - water productivity, energy productivity a n d economic

productivity.

In simplified terms the basic objective o f increasing productivity o f water i s :

(a) Water p r o d u c t i v i t y
in sweetwater areas - the measure o f water productivity i s to maximize t h e proportion o f
consumed water w h i c h goes to beneficial evapotransipration (E,) (and m i n i m i z e the
proportion due to non-beneficial Et.)
in saline areas - here water w h i c h goes to the aquifer i s no longer o f any use, and therefore the
objective i s to reduce the sum o f water lost to non-beneficial evapotranspiration +
water
w h i c h i s added to the saline aquifer.

(b) E n e r v productiviQ: Canal water w h i c h i n f i t r a t e s into sweetwater aquifers i s not lost, but i t takes
energy to lift the water again. And therefore i t i s not appropriate to consider very leaky systems to be
fine, especially as aquifer depths increase.

(c) E c o n o m i c productivity: I f the prices - including those relating to externalities -- and incentives
are right t h e n the summation o f all costs -water, energy and those o f greater precision in the
application o f these and other inputs - are all summed up in the economic value o f a c r o p and i t i s
thus the economic return criterion w h i c h i s the appropriate one in assessing the efficiency o f
different regimes.

Shahid Ahmeds background paperG3looks at the issue o f water productivity from the Et perspective.
T h e m a j o r findings include:
There i s considerable loss of water due to inefficient irrigation application at the field level.
Because o f poor surface irrigation hydraulics and unleveled fields, farmers apply enough water
to cover the highest spot in the field. T h e result i s not only excessive non-beneficial E,, but
also loss o f nutrients especially nitrates, a n d pollution o f the groundwater with these excess
applications o f agricultural chemicals. This i s a particular p r o b l e m in the canal commands
w h i c h have high A u t h o r i z e d Canal Water Allowances.
There i s m u c h non-beneficial Et due to weeds, shrubs and plants that grow along the
waterways, weeds in fallow fields, and vegetation in wastelands. As the weed infestation i s very
high in the Indus Basin, it i s expected that almost 20-30 O/o o f water i s consumed by weeds and
thus regarded as non-beneficial E,.

33
 Watercourses are the m a i n source o f weed seeds to the fields. Weeds grown along the
watercourse shed seeds w h i c h ultimately reached the field through the irrigation water. Weeds
in cropped fields not only reduce crop yield but also consume water. All weeds should b e
regularly eradicated as p a r t o f the watercourse maintenance activity, something that will b e
substantially i m p r o v e d as p a r t o f the m a j o r national p r o g r a m for watercourse lining.
Etstudles were conducted by IwlMI a n d PARC using the remote sensing techniques in areas
where drought h a d positive impacts in reducing waterlogging and increased productivity.
These studies showed that over-irrigation i s a c o m m o n practice in Southern Punjab a n d Sindh.
Evaporation from fallow fields a n d waterlogged areas increases non-beneficial E, and
contributes to accumulation o f salts in the surface soil.
T h e m a j o r implications are that there can b e m a j o r reductions in non-beneficial Et by:

fi
reducing evaporation from water applied
to irrigated fields through i m p r o v e d
irrigation technologies such as precision
1 i6
land leveling a n d furrow irrigation in the
I B I S a n d drip irrigation in areas where
1 14
12

water i s at premium, and, as shown in

Figure 38, i n t r o d u c t i o n o f m o d e r n
agronomic practices such as residue
~ :i
04

farming using zero-till planting,

m u l c h i n g o f fruit plants, or changing c r o p ~ 0: Zero Tillage Laser Leveling Conientional
planting dates to m a t c h periods o f less
evaporative demand. Figure 38 Production (kg/cubic meter o f water)
under different agricultural practices
Reducing evaporation from fallow land, 50urto *m,r zoo5
by decreasing area o f free water surfaces,

T h e r e i s agreement a m o n g agronomic a n d water professionals that the overall productivity o f the I B I S

c o u l d b e i m p r o v e d by reallocating water from areas where p r o d u c t i o n per unit of water loss i s high.
As p o i n t e d out by Shahid A h m e d reallocation will generally b e difficult between the provinces as the
water apportionment a n d rights are w e l l defined. However, there i s a possibility that each province
looks into Authorized Canal Water Allocations o f various canal commands a n d reallocates water
allowance based on evapotranspiration, c r o p p i n g pattern and c r o p p i n g intensity to have sustainability
on long-term basis. This will dramatically increase the economic productivity o f water both u n d e r the
deficit a n d excess canal commands. As discussed elsewhere in this Report, the use o f such
technocratic discretion would fly in the face o f the single m o s t i m p o r t a n t need in the system, namely to
reduce discretion a n d to put in places systems w h i c h m a k e entitlements inviolable a n d w h i c h reduce
the application o f administrative discretion. Fortunately there i s another way o f moving towards the
desired goal o f greater productivity.

Pervaiz Amir, in his background paper on agriculture64, has outlined the appropriate w a y to encourage
such efficiency gains. Entitlements (based on historic use) are, to a large degree, established for the
m a j o r parts o f the Indus Basin system. T h e r e should b e no command-and-control overriding these
entitlements, even in the case o f greater productivity. W h a t there should be, instead, i s a n aggressive

34
e f f o r t to m a k e clear to both those who have too m u c h water a n d those who have too little, how re-
allocation (perhaps initially as a lease a n d eventually as permanent transfers) might b e n e f i t both parties,
a n d t h e n encourage water trades (with willing buyers paying willing sellers). Such trades would
logically start within specific canal commands, but t h e n expand to trades between canal commands a n d
eventually trades b e t w e e n provinces.

Finally, c r o p p r o d u c t i v i t y obviously depends on m u c h m o r e t h a n just the supply o f water. Box 2

describes the ways in w h i c h distortions in public subsidies c a n give rise to absurd water use patterns (in
this case in the sugar industry).
~

Box 2: How o t h e r distortions affect the water e c o n o m v - the case o f sugar-cane.

From the b a c k g r o u n d paper by I m r a n Ali. 65

The linkages b e t w e e n industrial needs a n d impacts a n d water quality a n d supply c a n b e seen in the
case of the sugarcane. Starting with o n e sugar mill in 1947, Pakistan now has o v e r 80. Sugar mills are
o f t e n a r e w a r d for political services a n d support. A large n u m b e r are o w n e d by politically i m p o r t a n t
elements a n d o w e their existence to political gratification. Also, in t h e 1990s the N a w a z Sharif
g o v e r n m e n t i n d u c e d financial institutions to extend loans for sugar mills, to w h i c h S h a r i f s I t t e f a q
Foundries was a capital goods supplier. Sugar also seemed a relatively u n c o m p l i c a t e d form o f earning
industrial rents. T h e Pakistani consumer h a d to subsidize t h e processor, since international sugar prices
traditionally remained b e l o w domestic prices. However, b e y o n d a low percentage o f t o t a l c r o p p e d area,
sugarcane p r o d u c t i o n i s not ecologically suited to a n a r i d r e g i o n l i k e t h e Indus basin. Now, farmers
need, or want, to grow e n o u g h sugarcane to feed 80 mills, creating excessive d e m a n d on both surface
a n d tubewell water. Areas with critically low groundwater levels h a v e large standing crops o f sugarcane
(as w e l l as rice, the o t h e r water intensive crop). Shortfalls in sugarcane supply would create a crisis in
the sugar industry, w h i c h has t h e second highest capitalization in t h e Pakistani stock market, as w e l l as
politically e m i n e n t stakeholders. Additionally, effluents from sugar m i l l s are a significant source o f
water pollution, w h i c h i s affecting h u m a n a n d livestock health. Clearly, on specific issues there are
c o m p l e x options facing t h e administration, involving tradeoffs b e t w e e n environmental, hydraulic,
social, agronomic a n d industrial priorities.

I t i s apparent t h a t water (not land) i s

the main constraint, and there is
growing attention to t h e quite different
water requirements o f d i f f e r e n t crops
(Figure 39). An acre of sugar-cane, for
example, consumes as m u c h as eight
times t h e water needed by wheat.
Increased attention i s accordingly now
b e i n g g i v e n to p r o d u c i n g crops t h a t c a n
yield m o r e with less water, w i t h s t a n d
water-scarce a n d drought conditions,
and thrive on low- quality I Figure 39: Cubic meters o f water t o produce a ton o f produce
(salinelalkaline) water66 a n d to t h e
effect o f different agronomic practices Swrrr Hoef9tm. 2W3

on water productivity.

Successful r e f o r m s in t h e w a t e r sector need, therefore, to b e accompanied by simultaneous

i m p r o v e m e n t s on t h e agricultural side, in p r o d u c t i o n techniques, m a r k e t i n g efficiencies, a n d in
research, education a n d extension67. T h e r e i s a v i t a l p u b l i c sector r o l e in t h e p r o d u c t i o n o f these
public goods. But experience in o t h e r countries w h i c h h a v e undergone recent agricultural

35
diversification (such as Chile, B r a z i l a n d Mexico) has shown t h a t t h e private sector c a n play a n equally
i m p o r t a n t role. As Pervaiz Amir has described an i m p o r t a n t driver for higher water efficiency a n d
f a r m p r o d u c t i v i t y will b e establishment o f hi-tech m o d e r n farms with international cooperation t h a t
show t h e m o d e r n way. E x p o s i n g industry leaders to opportunities of joint partnership can h e l p bring
n e w biotechnology, efficiency based systems thinking a n d international m a r k e t i n g perspective to a
larger segment of the f a r m community.

In summary, improving the p r o d u c t i v i t y o f water u s e d in agriculture i s a central challenge facing a

water-scarce Pakistan. (As p o i n t e d out by Shahid A h m a d , since t h e water required to grow enough
food for o n e p e r s o n - between 3,000 a n d 5,000 cubic meters a year - i s about 100 times the a m o u n t
required for h o u s e h o l d purposes (100 lpd or a b o u t 35 cubic meters a year), u r b a n demands are
i m p o r t a n t locally but not at a national scale.) Confronting this challenge will require actions on
m u l t i p l e fronts, not least o f w h i c h i s changing the water supply system so that it meets t h e
predictability, transparency a n d flexibility required for a m o d e r n a n d m u c h m o r e p r o d u c t i v e
agricultural system.

Narrowing the trust gap

O n e o f the d e f i n i n g issues in contemporary Pakistan water management i s the pervasive lack o f trust,
at all levels68.

I t is, again, u s e f u l to start with the Indus B a s i n Treaty, both because o f i t s direct i m p o r t a n c e to
Pakistan, but also because o f the m o d e l i t provides in reducing mis-trust. T h e I n d u s Waters Treaty
shows v e r y clearly t h a t a well-defined set o f entitlements, w h i c h are m o n i t o r e d by both stakeholders,
a n d w h i c h have clear enforcement mechanisms, c a n p r o v i d e a high (not perfect) level o f t r u s t , even
w h e n t h e parties i n v o l v e d have literally gone to w a r several times. T h e IWT i s a great example o f how
good fences m a k e good neighbors.

Now consider the parallel issue between provinces in Pakistan. As described earlier, t h e 1991 W a t e r
A c c o r d i s a n enormously i m p o r t a n t achievement. T h e r e r e m a i n a n u m b e r o f i m p o r t a n t issues on
w h i c h agreement needs to b e reached, i n c l u d i n g how to share f l o w s u n d e r drought conditions a n d
how m u c h water to allocate to the delta a n d how to manage t h e demands from some provinces. T h e r e
i s also a need for putting in place a m o d e r n c o n f l i c t resolution mechanism. These caveats
notwithstanding, t h e A c c o r d i s basically sound a n d s h o u l d b e i m p l e m e n t e d in i t s present form. But
w h a t has happened?

F i f t e e n years after t h e A c c o r d was signed there i s s t i l l not a sound organization equipped with the right
instruments t h a t would give all parties confidence t h a t t h e A c c o r d i s b e i n g i m p l e m e n t e d transparently.
T h i s i s a deplorable missed opportunity, because i t has caused mistrust to fester a n d to c o r r o d e a h o s t
o f water-related a n d o t h e r issues b e t w e e n t h e provinces. T h e irony i s that, with t h e A c c o r d in place,
this i s so easy to fix!

Similar accords in o t h e r countries - the C o l o r a d o C o m p a c t in t h e US a n d the M u r r a y D a r l i n g

A g r e e m e n t in Australia - show t h a t once there i s a clear agreement, there are three fundamental
i m p l e m e n t a t i o n requirements. First, that a rigorous, calibrated system for measuring water inflows,
storages a n d outflows b e put in place. Second, t h a t t h e measurement system b e audited by a p a r t y
w h i c h i s not only scrupulously independent a n d i m p a r t i a l but i s seen to b e so by all parties. (rn t h e
case o f the C o l o r a d o t h e Federal D e p a r t m e n t o f t h e I n t e r i o r i s t h e river master; in the M u r r a y
D a r l i n g system a n i n d i v i d u a l from W e s t e r n Australia i s retained as t h e water auditor.) Third, r e p o r t i n g
must b e totally transparent a n d available in real t i m e for all parties to scrutinize.

36
T h e great frustration in Pakistan i s that, g i v e n the Accord, this i s so easy to do a n d y e t it has not yet
b e e n done. T h e central f u n c t i o n o f I R S A (see B o x 3) i s to b e this auditor a n d river master but it
acts m o r e l i k e a political body a n d does not d o this task. For years now a telemetric system for
automatic measurement o f flows into a n d out o f t h e m a i n barrages a n d c o n t r o l structures has b e e n
under implementation, but there i s always something that does not work (further fueling belief that
t h e l a c k o f transparency in the system i s b e i n g manipulated for nefarious purposes). T h e r e i s no higher
priority for water management in Pakistan t h a n to m o v e aggressively in putting in place a totally
transparent, i m p a r t i a l system for i m p l e m e n t a t i o n o f t h e A c c o r d .

Box 3: The Indus River System Authority (1992)

T h e Water A c c o r d necessitated the creation of an Indus R i v e r System Authority (IRSA) for i t s

implementation. T h e Authority was established in D e c e m b e r 1992. I t consists o f 5 members, o n e each to b e
n o m i n a t e d b y each Province a n d the Federal G o v e r n m e n t from amongst engineers in irrigation or related
fields. T h e first Chairman was the m e m b e r n o m i n a t e d by the G o v e r n m e n t of Balochistan to b e f o l l o w e d by
the nominees o f the G o v e r n m e n t o f NWFP, Punjab, S i n d h and Federal G o v e r n m e n t a n d thereafter in the
same order. T h e t e r m of office of the Chairman i s o n e year. T h e functions o f the Authority are as follows:

L a y down the basis for the regulation a n d distribution o f surface waters amongst the provinces
according to the allocations a n d policies spelt out in the W a t e r Accord;
R e v i e w a n d specify r i v e r a n d reservoir operation patterns a n d periodically review the system o f each
operation;
Coordinate a n d regulate the activities o f WAPDA in exchange o f data between t h e provinces in
connection with the gauging a n d recording o f surface water flows;
D e t e r m i n e priorities with reference to sub-clause 0 o f clause 14 o f the Water A c c o r d for river a n d
reservoir operations for irrigation a n d h y d r o p o w e r requirements;
C o m p i l e a n d review canal w i t h d r a w a l indents as received from the provinces on 5daily or, as the
case m a y be, on 10-daily basis a n d issue consolidated operational directives to WAPDA for m a k i n g
such releases from reservoirs as the Authority m a y consider appropriate or consistent with the
Water Accord;
Settle any question that m a y arise between two or m o r e provinces in respect o f d i s t r i b u t i o n o f river
a n d reservoir waters; a n d
Consider a n d m a k e recommendations on the availability of water against the allocated shares o f
provinces within three m o n t h s o f receipt o f fully substantiated water accounts for all n e w projects
for the assistance o f the E x e c u t i v e C o m m i t t e e o f N a t i o n a l E c o n o m i c C o u n c i l (ECNEC).

This situation is m i r r o r e d within t h e provinces. As described earlier, o n e hugely i m p o r t a n t p a r t o f the

A c c o r d was that i t formalized the entitlements for t h e 24 canal c o m m a n d s in Punjab, t h e 3 m a j o r
barrages in Sindh, the 2 barrages serving Balochistan, the 5 canals serving NWFP 69. Consider t h e case
o f P u n j a b as a n example. T h e allocations to the 24 canal c o m m a n d s are specified for 10-daily periods
in both the khurifand rubi seasons in t h e annex to the A c c o r d (Figure 40)O. And t h e administrators o f
t h e allocation system in P u n j a b apparently respect these, for the m o s t part. T h e I r r i g a t i o n
D e p a r t m e n t keeps detailed records o f t h e entitlements for each season, o f the a m o u n t s o f water
actually delivered a n d o f the balances for each canal command. (For example, as c a n b e seen in t h e
f i r s t f e w entries for t h e current season, a n u m b e r o f canal c o m m a n d s did not wish to receive their full
shares, but they get credit for this, a n d c a n use these saved amounts later in t h e season.) T h i s
system i s very close to s o m e t h i n g t h a t would b e ideal. T h e o n e big missing piece i s t h e transparent,
verified, i m p l e m e n t a t i o n o f the allocations. And here, again, lack o f transparency means t h a t there i s
discretion, discretion w h i c h corrodes b e l i e f in t h e fairness of the system. M a n y officials, i n c l u d i n g
those at senior levels, honestly try to i m p l e m e n t t h e water according to entitlements. But they are

37
under a variety o f murky and non-transparent pressures to tweak the system, to use discretion for a
variety o f opaque reasons. These officials are the strongest advocates for moving to verification and
transpar

rit YU aoc t v ~ tvc rnwu ?WM mu iiw ERI~ wmn ioiN

-- L * W . 1_1--
*I
~ - ~
I-----
cmr(
.--__-
m n
.*..**-
--.-w. .-*-I----*-- ------ _r-_-
TUL
--__
Ir*1OIClt
ff_-_

MAW 1 30.1 1.3 2 1 I60 SO B0 7.8 66 10.0 0.7 5.4 33 7

2 30.8 2.0 21 172 87 6.1 9.0 68 11.5 11 56 IO08
3 31.6 1.4 22 181 $2 83 9.5 68 118 13 85 1048
JUN 1. 313 26 2.3 18.6 94 66 105 68 13.0 1 7 54 109)
2 332 36 2 2 I07 9.7 67 104 69 135 18 5.5 112.2
3. 34.0 40 2 2 IS2 8.6 61 107 67 140 1.0 3 ? $ \ 4 S

JUL 1 3 2 . 7 64 22 19.2 8.8 6.6 104 68 143 1.7 58 1148

I 2 9 6 60 3 0 179 9.1 67 $9 63 12.6 1.7 G I 104.l
3 278 61 18 16.8 8) $1 9.6 58 138 18 47 1000
AUG 1. 28.2 68 1.7 174 82 5 3 96 60 115 18 481003
2 31 5 61 1 8 lg3 93 6.3 l(f.8 6.3 11.3 1.8 6 4 1697
3 348 49 2.0 106 101 68 11 1 66 139 1.8 5 9 I183
SEP i 339 4.4 21 230 100 68 111 68 144 1.e ~ 9 1 1 ~ 2
2 339 3) 2.1 206 98 68 108 68 140 10 5 8 It61
3 331 2.3 22 19.6 OB 69 110 68 130 16 56 1120
TOTALMAF 11 I S 124 0.74 631 507 2 15 340 2,37 4.19 0.53 1.87 37.07

Figure 40: Punjab canal entitlements from the 1991 Water Accord
Source Government o f Pakistan 1991

In some cases, however, w h a t i s happening i s not tweaking but wholesale destruction o f the
discipline on w h i c h the system fundamentally depends. In h i s background paper Safraz Qureshi
describes the existence o f a large n u m b e r o f uncontrolled direct outlets (DOs) in the N a r a Canal in
Sindh. These are outlets w h i c h draw water directly from the m a i n canals that o f t e n have no outlet
c o n t r o l (gates for example, and where these exist they are not easily controlled by the ID). These types
o f outlets are illegal under t h e 1873 I r r i g a t i o n Act, but have been p e r m i t t e d a n d a majority has been
accorded official sanction over the years. T h e cumulative effect o f the steady increase in these DOs
has been to increase the c o m m a n d area o f the N a r a Canal by m o r e t h a n 30% m a k i n g i t impossible to
distribute water to large areas in the tail portion o f the canal c o m m a n d area without a major increase in
diversion and a change to a rotational m e t h o d o f water distribution a m o n g the distributaries since
outlet discharges become unreliable i f the flow in the canal i s outside the range o f about 70-110% o f
design discharge. I t i s c o m m o n knowledge that large amounts o f m o n e y changes hands for the
sanctioning o f these d r e c t outlets.

This paradox o f a basically-sound allocation system b e i n g administered without transparency and

accountability i s replicated down b e l o w the canal commands and into the distributaries, outlets and
watercourses. As described in the background paper by Faizul Hasan: Lack o f t r u s t a m o n g various
users, especially mistrust o f small farmers on the large farmers a n d mistrust of the farmers on the state
agencies, i s at the heart o f the water rights issues in Pakistan. All disputes stem from t h e crisis o f
confidence. T h e small and m e d i u m farmers have the apprehension over the large farmers o f using
m o r e water. T h e small and m e d i u m farmers have a n understanding that the irrigation department i s
not equitably distributing the water, therefore, providing m o r e water to the influential farmers.
Therefore, there i s a need to develop the confidence building measures at all the levels. Delays in
justice and poor accountability have also shaken the confidence o f t h e farmers on t h e state agencies.

38
I t i s obvious that Pakistan faces a series o f serious natural challenges in managing i t s water resources.
As described by Siegmann and Shezad, it is, in fact, the human-induced uncertainties that are o f
greatest concern to c o m m o n farmers: the availability o f water for irrigation o f t e n varies during the
season (despite efforts to i m p r o v e forecasts, there are no guarantees), but this variability a n d
uncertainty does not seem to b e the primary issue with farmers -- transparency a n d timely information,
participation in decisions about w h a t to do w h e n there are shortages, a n d delivery on whatever is
agreed, are the m o r e i m p o r t a n t issues. Or in the words o f Faizul Hasan: Farmers generally
understand the natural variability o f their main source o f water supply, the Indus River, but w a n t to
know w h a t their share i s a n d w h e n i t will b e delivered -with this i n f o r m a t i o n they can make good or
at least i n f o r m e d and l o w e r risk decisions on how best to use both the water and their l a n d (and
possibly respond m o r e appropriately to incentives) .
T h e overall situation and some o f i t s ramifications are summarized by Pervaiz Amir in his background
paper: The lack o f transparency in i n f o r m a t i o n sharing a n d hiding data that should b e in the public
d o m a i n has created a n environment o f distrust a n d despair. Unless the grievances in relation to water
entitlements, distribution, and governance are addressed in a comprehensive manner, dams or even
other large scale water infrastructure projects will b e b l a m e d for all the shortcomings in water sector.

I n the shadows o f discretion a n d lack o f accountability, of course, lurk all sorts o f interests - of
p o w e r f u l people who manipulate the system for their ends, a n d o f those in the bureaucracies who
serve t h e m a n d are rewarded for this service. T h e amounts o f m o n e y that circulate in service o f these
distortions are very large, a n d those who benefit from it will not easily acquiesce to changes. But there
i s a widespread sense in Pakistan that this has now gone too far for too long, and there would
unquestionably b e massive support for politicians who ensured that entitlements were made public and
that there was unimpeachable i n f o r m a t i o n publicly avadable on who i s getting what. M o d e r n
measurement a n d computer technology makes it m u c h easier to do this today. In the words o f a n
astute observer o f similar problems in I n d i a an entire range of activities w h i c h normally incubate
c o r r u p t i o n can b e made transparent through the intervention o f technology.. ..The government must
concentrate on enabling technology to overarch h u m a n venality, a n d empower the ordinary person to
access a n d monitor the availability o f services directly72.

Maintaining the resource base -- groundwater

As described earlier, the initiation o f

large-scale irrigation in the Indus plains
started a large, a n d s t i l l on-going
transformation in the hydrogeology of
the basin. F i r s t there was the injection
-2 35 40

o f hundreds o f billions o f cubic meters 30

E
o f water into the aquifers, quantities of ; 25

recharge w h i c h far exceeded the 5 20

T)

subsurface horizontal drainage capacity 15

o f the aquifer system. T h i s l e d to a n -E 10

inexorable rise o f the water-table (from 5

a n average o f about 80 feet in 1900 to 0

1900 1915 1934 1947 1963 2001 2004
10 feet a century later, s h o w n in Figure
41) a n d the mobilization o f large
amounts o f salt, as hundreds o f billions Figure 41: Irrigation expansion and groundwater levels
o f cubic meters o f surface water were Source. TWASQl/WAPDA. 2004

stored in the aquifers. T h e result was

39
 large-scale waterlogging and salinity, but also the ready availability o f large amounts o f groundwater
w h i c h c o u l d b e used to supplement canal water supplies. And so in the 1960s was the start o f
extensive groundwater exploitation got under way, a process w h c h has continued unabated until the
present.

T h e 1960s saw the start o f the era o f

large-scale groundwater exploitation. As
S Canal Groundwater 1
described in the background paper by V a n 120 I I
Steenbergen a n d Gohar73, over 600,000
100
private tube wells have been sunk. I t i s
estimated that 75% o f the increase in 80
water supplies in the last twenty-five years 60
i s to b e attributed to public a n d private
groundwater exploitation (Figure 42). T h e 40
investment on these private tube wells i s 20
o f the order o f Rs. 30-40 billion whereas
0
the annual benefits in the form o f
1960 1967 1977 1985 1991 1999
agricultural p r o d u c t i o n are estimated at
Rs. 200 billion, roughly equivalent to 5%
Figure 42: The growing role o f groundwater irrigation
o f GDP. In addition,, most towns a n d
SOUPCL:Strrnbrrpn and G o k r 2005
m a n y industries rely for their water supply
on groundwater. To a large degree t h i s
groundwater system has become the primary storage mechanism used to distribute available water
between the monsoon (Khan3 a n d dry season (Rab2)74.

I t i s useful to consider the history of groundwater development in Pakistan in three stages. Stage 1,
was the pre-canal era of deep a n d stable water levels, in w h i c h only small a n d local use was made o f
groundwater. T h e main feature of Stage 2, starting in the 19th century, was the injection o f massive
amounts o f seepage into the aquifers, but s u l l o f very little use o f groundwater. Stage 3 started in the
1960s, a n d i n v o l v e d the application of n e w technologies on a massive scale for the exploitation o f the
groundwater. Stage 4 started some years back in the barani areas (where recharge i s m u c h smaller) a n d
i s now starting in the m a i n Indus basin. I t i s a stage in w h i c h the p r i m a r y challenge becomes
preserving the resource base - the groundwater - on w h i c h so m u c h l i f e a n d wealth now depends. A s
shown for the Punjab in Figures 43 a n d 44, groundwater i s in balance in the kharifseason, but now
systematically negative in the rabi season, meaning that groundwater i s b e i n g m i n e d a n d water tables
m u s t fall. And are falling (Figure 45)

Recharge Discharge
Recharge Discharge
50 OLmrframrtarags
I
10 Rechargefrom 50 - 50
40

a Pawin fbw from 30 40

GWAbsbacmn
E Recharge from 30
20
krgaban system
zn
a Recharge from 10
Palnfal
10
~

0 0
0
1

Figure 44: Punjab Water Balance: Drought Year (MAF)

Figure 43: Punjab Water Balance: Normal Year (MAF)
Sourre Strmkrgm and Gohw 2001
Sourre Sfembergenand 6ohar2005

40
 I
Water Table Decline in SGWZone of Chaj Daob
~ 1998.2001

-
c.
0)
aa
-5
aa
+sz- I
-10 -4-sz-I.
c
L sz - 111
E -15
m

-20

Period I
I
~

~ Figure 45: Declining groundwater table in Punjab

Source Stembergen and Gohar 2005

T h e management challenge i s to
stabilize the groundwater table at
levels where t h e cost o f pumping i s
not p r o h i b i t i v e (see F i g u r e 46) a n d in
w h i c h p r i m a r y attention i s g i v e n to
understanding a n d managing t h e t 800
quality - a n d especially t h e salinity - I
o f t h e aquifers. Although g 600 -

groundwater levels are already v e r y 400 1

deep in some barani areas (farmers 200 I
are drilling wells to 1000 feet in t h e ,
04
fruit-growingPishin D i s t r i c t o f 0 10 20 30 40 50 60 70 80
Balochistan), in t h e plains Average water table deplh (e)

groundwater tables are s t i l l fairly

Fisure 46: The effect o f t h e depth t o t h e water tableon
shallow (Figure 47), s o m e t h i n g w h i c h
good management would a i m to
preserve. In n o n e o f the past stages
have conscious management played
any role in the fate o f the aquifer. In
Stage 4 it i s precisely t h e ability to
consciously manage the aquifer w h i c h
constitutes a h u g e a n d quite n e w
challenge to the people a n d t h e state.
T h e failure to manage g r o u n d w a t e r in
the barani areas i s a salutary warning.
As described by V a n Steenbergen a n d
Gohar75 "Overuse o f groundwater i s NWFP Punjab Smdh Bdochtan Phtan

dramatic in some o f t h e barani areas

.
o f Pakistan.. (with) orchards in Figure 47: Depth t o water table by province
Balochistan b e i n g dismantled a n d by S w c e Strenbargm ond Gohw 2005

out-migration, destabilizing a r e g i o n

41
t h a t i s already volatile by nature a n d location.. ., the constant overuse o f groundwater in the last
decades has m a d e t h e baruni areas o f Pakistan less resilient to drought. This descent into non-
sustainability, a n d t h e h u g e associated social, economic a n d political costs should b e considered a
w a r n i n g o f the i m p o r t a n c e of action to manage the groundwaters o f the Indus Basin.

T h e r e are special challenges managing groundwater in the v i c i n i t y o f Pakistans b u r g e o n i n g cities, most

o f w h i c h d e p e n d on groundwater for water supply. T h e large scale exploitation of the aquifer
underneath the cities a n d in u r b a n periphery has however l e d to falling water tables a n d to contamination
of water supplies by leaking sewerage systems and septic tanks as documented for Karachi, for example.
In Quetta the overexploitation o f the confined aquifer by agricultural users a r o u n d the city has already l e d
to a n u m b e r o f doomsday projections, predicting that in a foreseeable future even the supply from deep
fossil groundwater to the capital of Balochistan province ddry up. I t i s estimated that the remaining
groundwater m a y b e exhausted by 201676. And the water table around L a h o r e has fallen at m o r e t h a n
h a l f a m e t e r a year for the last 30 years, resulting in a cup-shaped depression p r o n e to the migration of
saline groundwater.

G l o b a l experience suggests several things about managing scarce groundwater. First, i t i s v e r y d i f f i c u l t

to do, e v e n u n d e r good governance conditions. Second, i t requires changes in several related areas,
i n c l u d i n g legal a n d administrative. Of particular i m p o r t a n c e (and sensitivity) i t means t h a t the rights o f
individuals to pump as m u c h water as they wish from their l a n d have to b e curtailed. W a t e r rights
have to b e vested in the State, with individuals t h e n g i v e n entitlements (usually related to historic use)
to pump specific volumes. T h e administrative challenge i s immense, both to register historic use (and
entitlements) a n d to manage those. V a n Steenbergen a n d Gohar77 describe some of the experience to
date in this regard. T h e G r o u n d w a t e r Rights A d m i n i s t r a t i o n O r d i n a n c e i s a useful m o d e l for buruni
areas, whereas t h e G r o u n d w a t e r Regulatory F r a m e w o r k developed but not yet endorsed in P u n j a b can
serve as a n example for the alluvial aquifer systems in the Indus valley. At the same t i m e - preferably
within t h e P r o v i n c i a l I r r i g a t i o n a n d Drainage A u t h o r i t i e s - G r o u n d w a t e r Management Units n e e d to
established a n d activated in each Province. Past history s h o w e d that such efforts quickly w e n t in
dormancy, for instance in Balochistan a n d Punjab. By giving the Units a central r o l e in the
enforcement o f groundwater legislation a n d in the i m p l e m e n t a t i o n o f programmes.. . they c a n b e c o m e
v i b r a n t organizations in their own right.

In all instances w h e r e groundwater management has h a d some success, t h e f o u n d a t i o n has b e e n

A q u i f e r U s e r Associations who are supported v e r y strongly by g o v e r n m e n t who have a v i t a l r o l e in
providing t h e i n f o r m a t i o n a n d systems for m a k i n g decisions (for example o n the total a m o u n t o f
pumping from a n aquifer) a n d in providing the necessary legal a n d administrative support. I n the case
of t h e Indus B a s i n there are three c o m p l i c a t i n g factors. First, some o f t h e aquifers are v e r y large,
m u c h too large to b e managed by a single A q u i f e r U s e r Association. (Experience in the h u g e Ogallala
A q u i f e r w h i c h stretches from M i n n e s o t a to Texas shows t h a t a single aquifer can, indeed must, b e
b r o k e n down into pieces w h i c h c a n b e managed by l o c a l associations78. T h e smaller such units
become, t h e less realistic i t i s to treat t h e m as i n d i v i d u a l aquifers; but the larger they b e c o m e the m o r e
d i f f i c u l t t h e management o f users becomes. T h i s will require, as with so m u c h , a learning approach
a n d adaptive management). Second, it i s particularly i m p o r t a n t to manage the sweetwater aquifers
w h i c h b o r d e r saline aquifers with special care. T h e tendency will b e for m o r e pumping from t h e
sweetwater aquifer, thus causing the phreatic level in t h e sweetwater area to fall relative to t h e level in
the saline aquifer, i n d u c i n g saline i n t r u s i o n a n d destroying the sweetwater aquifer. Third a n d finally,
given t h e highly integrated nature of t h e canal a n d g r o u n d w a t e r systems, integrated management o f
surface a n d groundwater i s a must. W h a t this suggests i s t h a t a pragmatic i n i t i a l approach would b e to
develop aquifer associations on the f o u n d a t i o n o f the Farmers Organizations (FOs) w h i c h are b e i n g
f o r m e d in various provinces for management o f water d i s t r i b u t i o n at t h e distributary canal level. And
here a k e y issue i s sequencing - as long as the FOs are weak, they should not b e encumbered with the
c o m p l e x additional task o f extending t h e i r mandate to c o v e r groundwater, too. But o n c e t h e FOs find

42
their feet, t h e n the n e x t step should b e to expand the scope of their work to include both surface and
groundwater.

T h e forms of organization would necessarily b e different in different parts o f t h e country. As

suggested by G o h a r ? I n the Indus B a s i n there are 43 main canal commands, for w h i c h aggregate a n d
distributary-level water balances c o u l d b e developed as a basis for the f o r m a t i o n o f integrated
surface/groundwater user associations. In the m o u n t a i n o u s areas (such as the Pishin-Lora, Quetta
Valley a n d Bund Kushdil K h a n areas o f Balochistan) water balances have b e e n or c o u l d b e developed,
a n d p r o v i d e t h e knowledge base for the development o f aquifer associations.

I n their b a c k g r o u n d paper V a n Steenbergen a n d GoharSO describe a n i n i t i a l experience with some

elements o f such a n approach. This approach w o r k e d w e l l in t h e K a m a l i a D i s t r i b u t a r y t h a t takes o f f
from B u r a l a B r a n c h Canal o f LCC. T h e i n i t i a l response o f farmers a n d local agencies was lukewarm,
but after a first awareness building stage the ice was b r o k e n . During the course o f the pilot,
participatory piezometers were installed at farmers l a n d a n d l o c a l water management was discussed in
plenary. T h e results were a shift o f paddy cultivation to o t h e r crops a n d water releases to t h e tail ends
o f the distributary for t h e first t i m e in three years.

I n a large n u m b e r of developing countries (including Mexico81 a n d Indiagz), this intrinsically-difficult

task has b e e n greatly complicated by a tradition o f subsidizing electricity for groundwater pumping.
This genie, l i k e most other genies, i s v e r y d i f f i c u l t to put b a c k in the box a n d it means t h a t stabilization
o f aquifer levels (which i s inevitable, o n e w a y or another) will c o m e at m u c h higher economic, social
a n d e n v i r o n m e n t a l costs. T h e situation in Pakistan i s not ideal -- tariffs for agricultural t u b e wells are
approximately 35 O/o b e l o w rates for the domestic or industrial uses (with serious anomalies in
Balochistan, w h e r e the subsidies are m u c h higher a n d h a v e b e e n fundamental to digging a h o l e so deep
that in places escape i s almost impossible). I n addition, a t present 86% o f tubewells are p o w e r e d by
diesel motors, a n d thus unaffected by electricity prices. But this will change as r u r a l electrification
i m p r o v e s a n d as the groundwater table falls. As in all o t h e r countries, there are a n d will b e populist
temptations to subsidise energy for pumping groundwater. A high priority for p o l i c y makers at both
the national a n d p r o v i n c i a l levels i s to not succumb to such pressures. I f there w e r e to b e a decision to
increase subsidies to agriculture, t h e n these subsidies should b e ones t h a t enhance water p r o d u c t i v i t y
(as has b e e n d o n e in Mexico83), not destroy t h e resource base.

This management will not b e only a n issue o f managing quantity - the issues o f quality are equally
i m p o r t a n t a n d closely related to the quantitative aspects o f aquifer management.

Most p e o p l e in rural a n d u r b a n Pakistan depend on g r o u n d w a t e r for their drinkingwater. Of t h e

m a j o r towns, only K a r a c h i a n d Islamabad rely p r i m a r i l y on surface water sources. With t h e emergence
o f t h e p r o b l e m o f arsenic c o n t a m i n a t i o n in t h e Ganges-Brahmaputra Basin, there i s now c o n c e r n
a b o u t this issue in Pakistan, too. The extent o f arsenic c o n t a m i n a t i o n o f groundwater has recently
b e e n d o c u m e n t e d for t h e f i r s t time. Preliminary findings o f t h e N a t i o n a l W a t e r Quality Monitoring
P r o g r a m m e indicate t h a t arsenic found i t s w a y in large n u m b e r o f water samples from cities such as
Bhawalpur, M u l t a n a n d Sheikhupura a n d Lahore84. Figures 48 a n d 49 show t h e levels o f arsenic,
relative to t h e WHO guideline o f 10 parts p e r billion (ppb).

43
 100%
90%
80%
70% Arsenic Concentration
Q
m 60% % m r e than 50ppb
m
Arsenic Concentration
U
C
Q
50%
2 40% % 10-50 ppb
c 30% Arsenic Concentration
20% % up to 10ppb
10%
0%

Figure 48: Arsenic in groundwater in Punjab

Source: Steenbergen and Gohar 2005

Concentration of Arsenic in Groundwater I

100%
90%
80%
0 70%
p
.w
60%
50%
$
n
40%
30%
0 Arsenic Cocentration %
20%
more than 50ppb
10%
0% Arsenic Cocentration %
10-50 DDb
Arsenic Cocentration %
up to 10ppb

Figure 49: Arsenic in groundwater in Sindh

Source: Steenbergen and Gohor 2005

The presence o f fluoride in the groundwater i s also a potential health risk. A survey o f 987 samples
from sources o f domestic water supply, showed, however, that they are predominantly low in fluoride,
with 84% containing less than O.7ppm o f fluoride.. ..suggesting that fluoride and fluorosis - including
the dental and bone deformation -- are not uniform but can be serious at specific places85.

44
As concluded in the b a c k g r o u n d paper by V a n Steenbergen a n d Gohar86: for both arsenic a n d
f l u o r i d e contamination, alertness i s required without b e i n g alarmist. T h e result o f t h e recent studies
needs to b e substantiated, b e f o r e initiating programs to deal with these issues. I t i s i m p o r t a n t at the
same t i m e to k e e p things in perspective a n d not loose track o f the fact that bacteriological
c o n t a m i n a t i o n remains the m a j o r contamination a n d cause o f morbidity in drinkingwater.

In a d d i t i o n to these natural Contamination problems, human-induced c o n t a m i n a t i o n n o w constitutes

a n additional threat to the quality o f groundwater. This i s especially serious w h e r e aquifers are b e i n g
used to dispose of long-lived synthetic organic chemicals a n d heavy metals, pollutants w h i c h will
concentrate a n d persist in aquifers for m a n y decades. (This issue is discussed f u r t h e r in the section on
environment.)

Finally, the most fundamental o f all quality challenges, however, i s salinity - w h e r e will the s a l t go?
How will groundwater b e managed so that freshwater aquifers are not destroyed by intrusion from
saline aquifers? etc. -- a subject to w h i c h w e now turn in the n e x t section.

Maintaining the resource base - salinity management 87

T h e management of salinity constitutes one o f the m a j o r challenges for l o n g - t e r m sustainability o f

irrigated agriculture in t h e Indus Basin.

Why i s salinity such a n issue? T h e basic concern is that high s a l i n i t y in the root z o n e greatly inhibits
the p r o d u c t i v i t y o f most crops. T h e simplified physics starts with t h e fact t h a t as rainwater turns into
streamflow, it travels through soils a n d dissolves salts that are naturally present in t h e soils. W h e n t h i s
water i s t h e n u s e d for irrigation, most o f the water is lost to t h e atmosphere through the process o f
evapotranspiration. T h e salts, however, do not evaporate, but stay behind, generally in the root z o n e
or even the surface o f t h e soil. In temperate climates w h e r e there i s lots o f r a i n f a l l a n d where
evapotranspiration rates are low, t h e salts are mostly leached out to rivers a n d eventually the ocean,
a n d pose little p r o b l e m . I n a r i d environments, however, the situation i s reversed - evapotranspiration
rates are v e r y high (meaning t h a t a large a m o u n t of salt stays behind) a n d there i s little rainfall or
excess water applied to wash t h e salt out o f the root zone a n d into sinks w h e r e i t no longer constitutes
a threat. C o m p l i c a t i n g t h e issue in a r i d environments i s the fact t h a t the process o f i r r i g a t i o n o f t e n
mobilizes large amounts of salt t h a t were previously in deep aquifers a n d soils w h e r e they caused no
harm.

As described in t h e b a c k g r o u n d paper by B h u t t a a n d Smedema88, t h e salts presently occurring in the

Indus B a s i n are o f a variety o f origins. Firstly, there are the fossil salts deposited as a result o f
evapotranspiration during t h e drier p e r i o d in the geological f o r m a t i o n o f the I n d u s plains. These salts
occur at various locations a n d depths in the substrata a n d in t h e groundwater. M o s t o f the fossil salt i s
safely stored in the deeper substrata but some i s m o b i l i z e d by t h e ongoing t u b e w e l l pumping a n d by
the deeper groundwater flows. These m o b i l i z e d salts t h e n b e c o m e p a r t o f t h e salt dynamics o f t h e
r o o t z o n e a n d u n d e r l y i n g shallow groundwater zone.

Secondly, m u c h o f t h e l o w e r b a s i n i s o f marine origin (having b e e n elevated through m o v e m e n t s o f

the earth a n d by the d e p o s i t i o n o f s i l t s from t h e Indus). F u r t h e r inland, w h e r e t h e deposits are older,
some o f the marine salts in t h e u p p e r soil have b e e n leached out o v e r time. But in t h e younger lands
o f l o w e r Sindh, t h e m a r i n e salts are s t i l l strongly present at shallow depth.

Third a n d finally, there are t h e salts i m p o r t e d by the Indus i r r i g a t i o n water. Although this water i s
mostly o f low s a l i n i t y (only s o m e 200-300 ppm a t Tarbela a n d o t h e r rim stations), t h i s means that

45
a b o u t 30 million tonnes o f salt are b e i n g i m p o r t e d each year. B e f o r e the advent o f large-scale
irrigation, roughly similar amounts o f salt were b e i n g exported to t h e sea. Wnor salt sources, such as
those released by m i n e r a l weathering, a n d i m p o r t e d by fertilizers a n d rain are generally too insignificant
to b e considered in the salt management planning.)

T h e advent o f large-scale irrigation h a d dramatic implications for salinity in the Indus basin. First,
flows o f both w a t e r a n d salt to the ocean were reduced. Today, only about 10 million tonnes are b e i n g
r e t u r n e d to t h e sea each year in the Indus a n d about 4 million tonnes v i a the L e f t b a n k Outfall Drain.
T h i s means t h a t a b o u t 15 million tonnes o f salt (or about 1 t o n n e o f salt p e r hectare p e r year o f
irrigated land) are b e i n g stored somewhere in the basin.

Second, as described earlier, large amounts o f water were d u m p e d into the unsaturated zone above the
then-deep aquifers. These waters dissolved some o f t h e salts w h i c h h a d previously b e e n safely stored
w e l l b e l o w t h e root zone. In m a n y places, the watertable has now c o m e close to or even intersected
t h e surface. This m e a n t large increases in evaporation, with the salts that were in t h e water b e i n g
deposited in t h e root zone or the soil surface. As described in Section 11, by the 1960s t h e
waterlogging a n d salinity p r o b l e m posed a m a j o r threat to large areas o f the irrigated plains o f the
Indus. T h e response to t h i s challenge showed w h a t c a n b e d o n e if the nations a n d t h e worlds best
scientific a n d technical m i n d s are put to work on a p r o b l e m . I t was realized that the solution
c o m p r i s e d three integrated actions - first, to l o w e r t h e groundwater table through massive pumping,
thus reducing large evaporation losses (and the corresponding s a l t deposition); second, to increase the
application o f water to crops, so t h a t salts would not accumulate in the root zone but b e leached down
a n d out o f harms way; a n d third, to use t h e incentive o f greater c r o p p r o d u c t i o n to m o t i v a t e farmers
to engage in greater use o f groundwater.

I n m a n y ways this
salinity management
strategy has w o r k e d
extraorcharily w e l l
a
o v e r the past 40 7
years on t h e 6
aggregate. (Figure i?5
50) But with water, zm 4
l i k e politics,
$ 3
everything i s local.
And there are s t d l 2
substantial areas, 1
especially in the 0
l o w e r p a r t o f the
-1 J
delta w h e r e
groundwater i s 1975 1980 1985 1990 1995 #)o 2005
naturally saline a n d Year
w h e r e water logging
a n d salinity remains ~
-+Funjab
. - ~-
-SindJBdochistan
- .
&W - *-~
~
wst
a n

a n immediate Figure 50: Long-term trends in severe waterlogging

p r o b l e m (Figure 51).
L
s ~ an~ ~ ~ ~ ~ .
~ 2005 ~ r l ~ ~ ~

46
 10 Salt free 0 Slightly saline Moderately saline Strongly saline I

NWFP Punjab Sin& Baloch. Pakistan

Figure 51: Salinity levels by province

Source: Bhutta and Smrdrmo 2005

Paradoxically, in a
c o u n t r y w h e r e water
scarcity i s a looming
problem, i t i s
1--e Change in waterlogged area +Canal Diversion previous year 1

scarcity w h i c h helps Area in 1000 ha Canal diversions

3000 7 WF/yr T 6o

moL
reduce t h e salinity
p r o b l e m ! Consider 2000

the following two

examples. In Sindh
the area affected by
waterlogging a n d
-moo1 -9 1
salinity varies
enormously @y a
factor o f 5 o v e r the -2000 7

1990s) a n d appears
-3000 1 l o
(Figure 52) to b e
directly related to Years
the quantity o f water
applied during the Figure 52: Canal diversions and waterlogging in Sindh
previous year89.
Source: Steenbergen and Gohar 2005
And overall, as
described earlier,
water shortages in the Indus B a s i n have little i m p a c t on production, because the deleterious effect o f
water shortages i s offset by t h e positive effect o f reduced waterlogging a n d salinity a n d because o f
supplementary i r r i g a t i o n from groundwater. I t i s also salutary to recognize t h a t t h i s h a p p y coincidence
c a n n o t persist for long, because of constraints o n both t h e quality a n d quantity of groundwater.

T w e n t y years ago, it was believed t h a t t h e only w a y o f m a i n t a i n i n g salt balances in t h e b a s i n would b e

to construct a drainage superhighway w h i c h would transport salts from Punjab, NWFP a n d Sindh to
t h e sea. T h e (planned a n d inadvertent) successes o f t h e last decades has l e d - as reflected in t h e r e p o r t
o f t h e E x p e r t Panel on t h e D r a i n a g e M a s t e r P l a n -- to a fundamental r e - t h i n k i n g o f t h e needs for this

47
currenl salt balance in
e??
E a c h n e w era o f water development poses n e w challenges to water managers. A s described earlier,
o v e r the c o m i n g decades groundwater tables in the sweetwater areas are likely to c o n t i n u e to fall, in
m a n y cases q u i t e rapidly a n d quite deep. In addition to the o t h e r challenges described in the previous
section on groundwater, this raises a n i m p o r t a n t salinity concern in the aquifers w h i c h b o r d e r on saline
areas. Because as the groundwater table falls in the sweetwater area, the hydraulic gradient will b e
steeper, a n d t h e normally-slow h o r i z o n t a l flow o f water will increase, in this case out o f the saline
aquifers into t h e sweetwater aquifers. In addition, the heavy pumping o f groundwater c a n cause up-
c o n i n g o f saline water from deeper aquifer (which caused m o r e t h a n 250 drainage c u m i r r i g a t i o n tube
wells installed in the fresh groundwater zone of SCARP-I1to b e abandonedo). I t i s v i t a l to monitor
both the water a n d salt flows, so t h a t this process does not b e c o m e a local threat.

A central a n d politically sensitive issue i s the fact that, from a salinity perspective, there are areas in t h e
Indus p l a i n w h i c h are suitable for irrigated agriculture (generally near the m o u n t a i n s a n d far from the
coast) a n d others w h i c h are not so suitable (especially those in the s a h e l o w e r reaches o f the basin). I t
i s useful to step away, momentarily, from the obvious a n d very sensitive political implications o f t h i s
gradient a n d see how o t h e r countries have dealt a n d are dealing with similar problems. A good
example i s the M u r r a y D a r l i n g basin in Australia, w h i c h i s o f about t h e same size a n d faces m a n y o f
the same salinity problems. A cornerstone o f t h e Australian s a l i n i t y management strategy i s to define
different strategies for different saline areas. I n some areas there i s a strategy o f saline agriculture,
w h i c h encourages c r o p p i n g with salt-resistant crops a n d the use o f saline groundwater for this
purpose. In o t h e r areas of high salinity not only i s productive agriculture not possible, but i t would
m o b i l i z e large amounts o f salt w h i c h would cause systemic h a r m . In these areas, the strategy i s to
o f f e r farmers incentives - i n c l u d i n g sale of their water entitlements -- to retire their l a n d from
irrigation. T h e implications for Pakistan are o b v i o u s - there i s a n e e d for detailed assessment down to
the local level, a n d there i s a n e e d to have a support a n d incentive structure w h i c h will ensure that t h e
right type o f agriculture will b e d o n e in the right areas. M i g r a t i o n of water a n d o t h e r inputs must b e a
voluntary o n e in w h i c h those who are surrendering their right to use t h e m are compensated. I n
Australia, the growing water markets do t h i s in a w a y that farmers in these l o w - p r o d u c t i v e areas do far
better from the revenues from selling their water rights t h a n they did by practising irrigation. Salinity
management, then, in the words o f the f o r m e r CEO of Australias M u r r a y D a r l i n g B a s i n Commission
is as m u c h about managing h u m a n expectations as it i s about m a n a g i n g salt. Salt creates i t s own
distributional impacts w h i c h for m a n y areas bear no resemblance to the original design or i n d i v i d u a l
equity within i r r i g a t i o n schemes. Therefore, effective salinity management schemes always c o n t a i n a
significant restructuring c o m p o n e n t to enable i n d v i d u a l s to leave t h e industry in a managed way. This
i s generally m u c h cheaper t h a n trying to eradicate s a l i n i t y .

In summary, there i s a n u r g e n t n e e d to invest heavily in monitoring a n d scientific a n d technical

capacity to deal with t h e salinity issue. T h e k e y i n i t i a l questions w h i c h n e e d to b e addressed include:
at a m a c r o level it i s clear t h a t t h e difference b e t w e e n salt b e i n g i m p o r t e d a n d salt b e i n g e x p o r t e d i s
a b o u t 15 million tonnes p e r year
K e y question 1 - w h e r e i s this salt going? I s i t to safe storage or into places w h e r e it will affect
agriculture?
K e y question 2 - there are v e r y large amounts o f salt already stored a t various places in the soil a n d
groundwater. A r e water management actions k e e p i n g these out o f harms way, or are these b e i n g
m o b i l i z e d (for example through pumping o f deep groundwater or through lateral m o v e m e n t from
saline to fresh aquifers)?
For this, managers n e e d to know g l o b a l balances but, m o r e i m p o r t a n t l y , they need: to b e able to get
inside the black box a n d find out w h a t i s h a p p e n i n g in terms of both stocks (where i s t h e salt?) a n d
flows (where i s it moving?) a n d to h a v e a v e r y good knowledge base for l o c a l situations.

In conclusion, i t i s i m p o r t a n t to n o t e t h a t a b o u t 80% o f irrigated agriculture in Pakistan currently

operates in a largely-salt free e n v i r o n m e n t . This figure i s not static, however, a n d maintenance o f this

49
proportion depends on good management. For both currently safe areas a n d those where salinity
levels are high, sound, knowledge-based strategies for living with a n d managing salinity must b e
developed to a v o i d adverse long-term effects on the productivity a n d sustainability o f the system.

Reversing large scale environmental degradationg

Salinity management i s the biggest and most fundamental environmental challenge in the Indus Basin.
But there are o t h e r environmental challenges too - o f management o f the coastal zone a n d the delta,
o f preserving wetlands a n d o f managing pollution.

T h e delta:

T h e coastal z o n e o f Sindh i s highly productive in terms o f photosynthetic processes a n d biodiversity92,

with about 200 species o f fish reported in the delta. T h e delta produces large quantities o f shrimp -
about 25,000 tonnes a year, m o r e than h a l f o f w h i c h i s exported. Mangroves are a centerpiece o f the
deltaic ecosystem. Estimates using satellite imagery s h o w a steady decline in mangrove coverage in the
Indus Delta. A 1977 estimate was o f 263,000 ha; a 1990 study estimated 160,000 h a o f mangrove
forests; a n d the latest estimate in 2003 reported that 106,000 h a o f mudflats are u n d e r the mangrove
forests along t h e coast of Sindh.

T h e r e are multiple reasons posited for this decline. T h e mangroves have traditionally been used as a
source o f wood for construction. However, today the residents o f the coastal villages mainly use t h e m
as a source o f fodder for livestock a n d as a source o f fuel. In addition, professional livestockers from
the interior o f Sindh bring large n u m b e r o f camels to the coastal lands for grazing a n d browsing mainly
during the flood season. These factors notwithstanding, it has long b e e n clear that the reduction in
freshwater outflow to the delta a n d the decrease in sedments a n d nutrients play a role in this decline
a n d the associated decline in fisheries and livelihoods in the delta.

To a substantial degree the retreat o f the delta is a n inevitable p h e n o m e n o n a n d a p a r t o f the bargain

struck in order to support large numbers o f people in the Indus Basin. T h a t said, i t has also long been
recognized that i t i s i m p o r t a n t to provide some managed flows to sustain the delta to the degree that
this i s possible. T h i s was, in fact, a n i t e m w h i c h was specifically discussed as p a r t of the I n d u s Waters
Treaty. There i s a long-standing debate about the flows that are needed to maintain reasonable quality
in the delta. In his definitive history o f the I n d u s Waters Treaty, Gulhati93 records that for salinity
repulsion at the mouth o f the Indus and for purposes o f navigation between Kotri and the sea,
Pakistan wanted to reserve 17 MAF as a n existing use. This was taken up again in 1991 in the
discussions o f the Water Accord. The need for certain minimum escapage to sea, b e l o w Kotri, to
check sea intrusion, was recognized. Sindh h e l d the v i e w that the optimum level was 10 MAF, w h i c h
was discussed at length, w h i l e o t h e r studies indicated higher/lower figures. I t was, therefore, decided
that further studies would b e undertaken to establish t h e m i n i m a l escapage needs down-stream
KO
tri94

After m a n y years o f discussion, t h e Ministry o f Water a n d P o w e r has commissioned m a j o r studies by

international consultants to examine the issue o f the decline o f the delta, the various contributing
factors, the r o l e o f diminished flows, a n d to make recommendations about the quantity a n d timing o f
managed flows for the delta. T h e report i s due in 2005 a n d i s expected to result in a final agreement.

Wetlands:

Pakistan possesses a great variety o f wetlands from the Indus delta to the high Himalayas. T h e area o f
inland waters in Pakistan has b e e n estimated at 7,800,000 ha. T h e Pakistans Wetlands A c t i o n Plan,

50
recently prepared by WWF-Pakistan and NCCW gives a n overview o f 53 i m p o r t a n t wetlands o f
Pakistan a n d describes their location, area, threats a n d management status.

Figure 54 shows the location o f i m p o r t a n t wetlands in the country. As i s i m p l i c i t in the description of

t h e m a j o r types of i m p o r t a n t wetlands -- man-made reservoirs (31%), brackish lakes (%YO), a n d fresh
water lakes or dhands (17%) - the large-scale use o f water for irrigation has h a d both positive a n d
negative effects on t h i s environment.

1
I
;
Figure 54: Pakistan's wetland resources Source: Zachariah 2405

Wetlands are a v i t a l p a r t o f the ecosystem. Examples of k e y values and functions o f wetlands in

Pakistan include:
Flood control: K i n j h a r a n d H a l e j i lakes reduce t h e i m p a c t of Indus floods, w h i l e M a n c h a r
lake accommodates water from Indus a n d also from torrential hill streams.
Ground water replenishment: Wetlands in such areas are valuable source o f ground water
recharge, for example t h e Hub reservoir in Balochistan.
Reservoirs o f biodiversity: H a l e j i lake h o l d s 60,000 to 10,000 ducks a n d coots in mid-winter.
Ecosystem services: A large fisherman c o m m u n i t y i s dependant on M a n c h a r lake for
subsistence.
Recreation and tourism a n d cultural importance: H a l e j i lake in Sindh, Taunsa barrage in
Punjab a n d Sheosar lake in the N o r t h e r n Areas attract visitors.
Support local e c o n o m y a n d cottage industries: Baskets made from typha are a n i m p o r t a n t
economic activity in all central a n d l o w e r I n d u s basin.

51
Pakistans wetlands are u n d e r a variety o f threats. I n the past, wetlands have generally b e e n considered
as waste lands, a n d have b e e n u s e d for drainage o f water, reclaimed for agriculture, or treated as
dumping grounds for all kind o f refuse. T h e resources o f the wetlands -- fish, mangroves a n d birds --
have b e e n harvested indiscriminately without any attempt to regulate their exploitation. I t i s estimated
t h a t a r o u n d 36% o f the wetlands are facing a high level o f threat, a n d a further 30% are facing
medium-level threats. T h e m a j o r threats include:
Reductions in floods as a result o f Tarbela a n d Mangla. Although obviously desirable for
o t h e r reasons, reduced flooding together with the c o n s t r u c t i o n o f bands has significantly
reduced riparian forests. A species shift from Acacia to Prosopis i s c o m m o n in riverine areas.
This has threatened m a n y m a m m a l species i n c l u d i n g the hog deer.
Some o f t h e drainage systems have reduced recharge of t h e wetlands a n d changed their
habitats by d m h a r g i n g saline effluents into the wetlands. M a n y coastal lakes l i k e Pateji were
fresh water lakes prior to t h e LBOD project.
L a n d reclamation for various purposes, particularly for agriculture, has eliminated m a n y
wetlands. A recent study assessed the e v o l u t i o n o f wetlands in T h a t t a a n d B a d i n districts in
l o w e r Sindh a n d concluded that several lakes h a d either reduced considerably in size or h a d
completely d r i e d up. In part, this was attributed to extensive rice cultivation by the p o p u l a t i o n
o f t h e area.
Discharge o f sewage, effluents, i r r i g a t i o n a n d industrial waste i s putting a serious stress on
aquatic ecosystems. A l m o s t all sugar m i l l s in Sindh are discharging their effluents in drains,
m a n y o f w h i c h discharge into wetlands. H a l e j i a n d La1 Suhanra lakes are facing the threat o f
eutrophication.
O v e r exploitation o f biological resources l i k e food, feed a n d fuel has degraded large wetlands.
K i n j h a r a n d M a n c h a r lakes are i m p o r t a n t examples.
Sea-water intrusion a n d storms in coastal areas has destroyed ecosystem o f a large n u m b e r o f
lakes. Kalkani, K h a d i a n d Jhim dhands are i m p o r t a n t costal wetlands t h a t h a v e b e c o m e saline
in recent years.
Unregulated harvesting o f w i l d l i f e species, particularly hunting a n d t r a p p i n g o f waterfowls, i s
causing a steep decline in populations. C h a c h h d h a n d in T h a t t a district supports a good
p o p u l a t i o n of waterfowls. H o w e v e r , p o p u l a t i o n o f w i n t e r i n g birds i s declining rapidly due to
excessive hunting. All dhands along the N a r a canal are facing similar threats.
I n t r o d u c t i o n o f exotic species in lakes i s a serious threat to t h e p o p u l a t i o n o f indigenous
species. C a r p i n t r o d u c e d in t h e K a l l a r K a h a r lake are proliferating at t h e expense o f
indigenous species.
U n m a n a g e d tourism i s also a significant threat to t h e wetlands. M a j o r hazards associated with
tourism are damage to vegetation, killing or capturing wildlife, a n d littering. H a l e j i lake,
M a n g l a reservoir a n d Sheosar lake in the N o r t h e r n Areas are examples.

O n e h u n d r e d a n d fifty years ago, a decisive choice was made, namely to render the sparsely-populated
Indus plains fit for large-scale h u m a n h a b i t a t i o n by manipulating t h e natural water system. Such a
decision inevitably leaves a v e r y large ecological footprint. Pakistan has started t h e process o f
examining this footprint, a n d o f p r i o r i t i z i n g those environmental issues w h i c h are most i m p o r t a n t , a n d
most amenable to change by h u m a n action. As the above description suggests, m a n y o f these changes
(many deleterious, some positive) are irrevocable. And in virtually all cases t h e n e e d i s for actions on
m a n y fronts, i n c l u d i n g m o d i f i e d water management regimes.

W a t e r Pollution:

As described earlier, Pakistan i s u r b a n i z i n g a n d industrializing v e r y rapidly. T h e n u m b e r o f people

living in cities has increased a l m o s t four-fold o v e r t h e last 20 years, a n d has b e e n accompanied by a

52
similar increase in industrial activity. To date there has b e e n l i t t l e effective a c t i o n to reduce the
e n v i r o n m e n t a l i m p a c t of this r a p i d concentration o f people a n d activity.

First, consider t h e issue of wastewater disposal. As shown in T a b l e 1, there i s v e r y little treatment o f

wastewater or o f industrial effluent in the burgeoning cities: it i s estimated that only some 8% o f u r b a n
wastewater i s treated in m u n i c i p a l treatment plants, where treatment i s at best partial owing to poor.

Table 1: Wastewater treatment in the cities of Pakistan"

Major Cities Population (%?%om) Status And Condition OfFacZty

Karachi 10 TP 1,2 & 3 N o n operational, M a r i p u r b e i n g operated by semi

private arrangement.
Lahore 5 Sewage treatment plants p r o p o s e d but not implemented. BOOT
advertised but lack o f interest resulted in schemes b e i n g shelved.
Faisalabad 2 O n e o f the treatment plants i s f u n c t i o n i n g but not satisfactorily.

Furthermore, there i s
v e r y little separation o f 5_80
I
m u n i c i p a l from
industrial effluent a n d
both flow directly into
o p e n drains, w h i c h t h e n
flow into nearby natural BOD
water bodies. I n t h e mg/l
absence of the latter, the
effluent collects in
stagnant pools, within
residential areas or near
industrial plants". I n d
Lahore, only 3 out o f
some 100 industries
using hazardous
Urban streams in different cities
chemicals treat their
Figure 55: The quality (Biochemical Oxygen Demand) o f urban streams
wastewater. Figures 55 Source: Zactmrioh 2005
a n d 56 show that t h e
BOD a n d COD levels in
u r b a n streams are orders o f m a g n i t u d e higher t h a n n a t i o n a l standards.

53
I n K a r a c h i Sindh
5000
Industrial T r a d i n g Estate I
(SITE) a n d K o r a n g i d5W
Industrial a n d T r a d i n g
4000
Estate (KITE), two o f
the biggest industrial 3500
estates in Pakistan, there
i s no effluent treatment COD jom
p l a n t a n d the waste mg/l 25110
containing hazardous
MO O
materials, heavy metals,
oil etc i s discharged into 1500

river a n d h a r b o r already I000

polluted. T h e industrial
pollution discharges 5W

c o m b i n e d with 0
mangrove destruction Urban streams in different cities
are resulting in sharp
decrease in shrimp and
fish production. T h e Figure 56: The quality (Chemical Oxygen Demand) of urban streams
Source: Zacharhh PO05
K a s u r Water Treatment
Plant i s generally
considered to b e the only c o m m o n effluent treatment plant for industrial wastewater that i s currently
functioning in the country, but in fact i t i s only a pre-treatment plant and causes m a j o r odor
problems97.

T h e overall effect i s that the population i s exposed to m a j o r health hazards, a n d i t also means that
nearby groundwater is becoming seriously contaminated. Since all m a j o r cities, apart from K a r a c h i a n d
Islamabad, depend on groundwater as their source of r a w water, t h i s poses a serious and rapidly-
growing p r o b l e m for the cities. In addition, m a n y cities are having difficulties in getting sufficient
quantities o f r a w water as local aquifers are b e i n g overpumped a n d contaminated. Consider the case
o f Lahore, for example, w h i c h has 300 tubewells installed pumping over 300 m a d of water. O v e r the
last f e w years, water quality has become a serious issue as the existing sewerage system i s in a state o f
disrepair a n d there i s no sewage treatment facility. Wastewater i s contaminating groundwater supplies
in m a n y areas o f Lahore.

In one o f the m a n y brutal tradeoffs that poor people make on a daily basis, o n the u r b a n periphery
irrigating with low-quality water or sewage i s o f t e n the only option. But even w h e n farmers do have
access to surface and groundwater, m a n y prefer sewage because they are guaranteed a constant supply,
a n d the nutrients the water contains allow t h e m to save on fertiLzer,9*

Water pollution is, however, not only a consequence o f u r b a n a n d industrial pollution. About 5.6
million tonnes of fertilizer a n d 70 thousand tonnes of pesticides are consumed in the country every
year. Pesticide use i s increasing annually at a rate o f about 6%. Pesticides, m o s t l y insecticides, sprayed
on the crops m i x with the irrigation water, w h i c h leaches through the soil a n d enters groundwater
aquifers a n d sometimes contaminates water supplies, as appears to b e the case in the recurring
problems o f water-related deaths in Hyderabad99. T h e quantity or quality of agricultural runoff has not
been measured or tested at the national level. In 107 samples o f groundwater collected from various
locations in the country between 1988 a n d 2000,31 samples were found to have contamination o f
pesticides b e y o n d FAO/WHO safety l i m i t s . l o 0 A recent study, conducted by the E n v i r o n m e n t a l
Protection D e p a r t m e n t in Punjab took 280 samples, distributed evenly over all districts in the
Province. I t found the concentration o f the different heavy toxic metals (cyanide, cadmium, chromium,

54
mercury, lead, boron, nickel, selenium, zinc) to b e in excess o f WHO standards for up to 25% o f t h e
samplesIo1.

I t i s instructive to differentiate two d i f f e r e n t water-related e n v i r o n m e n t a l challenges. Category O n e

are issues o f e n v i r o n m e n t a l degradation that would i m p r o v e dramatically i f w a t e r w e r e u s e d a n d
managed m o r e effectively a n d efficiently; a n d Category Two are issues t h a t require supplementary
actions a n d resources.

I f t h e recommendations discussed in earlier sections o f t h i s r e p o r t - w a t e r entitlements, w a t e r pricing,

accountable institutions, effective regulation - were implemented, t h e m a j o r i t y o f water-related
e n v i r o n m e n t a l p r o b l e m s in Pakistan would b e ameliorated to a significant degree. Specifically, this
would m e a n a n e n d to wasteful w a t e r use in both agriculture a n d u r b a n areas; it would m e a n
reductions in mining o f aquifers a n d t h e consequent quality problems. I t would also m e a n shifting t h e
focus o f g o v e r n m e n t a t t e n t i o n away from t h e traditional areas (of c o n s t r u c t i n g a n d operating water
supply infrastructure) a n d creating fiscal space for investing in e n v i r o n m e n t a l quality a n d o t h e r
p u b l i c goods.

G l o b a l comparisons show t h a t
there i s s o m e t h i n g l i k e a K u z n e t s
curve for m a n y indices o f
e n v i r o n m e n t a l quality. As Good
illustrated schematically in F i g u r e
57, in the early phases o f
development there i s typically a
sharp decline in e n v i r o n m e n t a l
quality. As e c o n o m i c growth i s
sustained, however, societies place Bad
a higher value on e n v i r o n m e n t a l Low Moderate Medium High
quality, a n d t h e y have m o r e Income per capita
resources to s p e n d on t h e
environment. For m a n y measures Figure 57: The Kuznets curve f o r environmental quality
o f e n v i r o n m e n t a l quality there i s
t h e n a slow but steady c l i m b out o f
SWICL. W d d b n k 1992

t h e e n v i r o n m e n t a l abyss.

Living with Roods

T h e natural state o f heavily-silt l a d e n rivers (like t h e Indus) i s to meander. This i s because as silt builds
up in their beds, t h e rivers seek l o w e r lands a n d change their courses. T h i s creates h a v o c with h u m a n
settlements a n d so, throughout t h e world, s u c h rivers have b e e n trained a n d c o n f i n e d by e m b a n k m e n t s
within relatively n a r r o w beds. But as with e v e r y t h i n g watery, s o l v i n g o n e p r o b l e m gives rise to
another. In this case, t h e b e d keeps g e t t i n g h i g h e r a n d higher, a n d soon t h e r i v e r is, as in t h e l o w e r
parts o f Sindh, above t h e l e v e l o f t h e land. (To s o m e degree t h e t r a p p i n g o f s i l t in u p s t r e a m reservoirs
alleviates this particular e n v i r o n m e n t a l hazard.) O v e r time, t h e l i k e l i h o o d o f e m b a n k m e n t b r e a c h i n g
increases, as do t h e p r o b l e m s o f drainage from f l o o d e d lands. W h e n this coincides with u n f a v o r a b l e
t i d a l conditions, t h e consequences c a n b e disastrous.

55
As shown in Figure 58,
floods have, with
considerable regularity,
i n f l i c t e d large damages a n d
3,500 I
I - Liws Lost Area Flooded (Million Acres) 1
, 25
caused m a n y deaths. T h e
nature o f the flood 3,000
- 20
protection a n d 2,500
management challenge 15
2,000 ~

varies considerably across

the country. As i s always 1,500 - 10

the case, w a t e r is mostly a 1,000

blessing a n d sometimes a -5
500
curse. T h e hill torrents o f
NWFP, Balochistan a n d 0 -0
certain parts o f Punjab
sustain agriculture in a n
area o f a b o u t 1 million
hectares102 but also, as Figure 58: Flood losses in Pakistan
described by Asif Kazi103:
..
. pose a serious threat
Source: Kazi, 2005

-
d u e to their steep slopes-
resulting in flashy flows o f high magnitudes from torrential rains. I n Punjab, the p r o b l e m o f
i n u n d a t i o n a n d l a n d erosion are both prevalent. 104 T h e p r o b l e m o f Sindh is, in m a n y ways, the most
d i f f i c u l t a n d intractable. In the words o f Asif K a z i : T h e P r o v i n c e o f Sindh has virtually b e e n the
delta area for millions o f years, a n d there i s ample geological evidence t h a t there i s not a single square
meter o f S i n d h w h e r e Indus has not been flowing. I t has b e e n filling up the l o w e s t lying areas
wherever they might have been, depositing sediment, a n d t h e n moving on to n e x t low area a n d so on.
Changes in the course o f Indus to even far away low routes, o f course, took place during high floods.
T h e process c o n t i n u e d till a n uncertain situation such as this became totally unacceptable to t h e
inhabitants. Therefore, over t h e past 150 years or so dykes have b e e n constructed progressively to a
point that t h e Indus R i v e r has now b e e n put in a straitjacket, thereby fixing i t s location. This naturally
resulted in d e p o s i t i o n o f transported sediment largely on i t s own b e d giving rise to a situation where
the river i s now significantly higher t h a n the natural ground. T h e choice would b e between dredging
a n d excavation to l o w e r the bed, or to continue to raise the side embankments. Currently, w h e n a
p r o t e c t i o n bund breaches in Sindh Province, inundations are prolonged, a n d t h e floods not only
damage s u m m e r crops but they also interfere with t h e sowing o f subsequent w i n t e r crops. T h e
p o t e n t i a l for e c o n o m i c losses, a n d h u m a n sufferings for t h e poor inhabitants o f relatively cheap flood-
p r o n e lands near t h e river, are the greatest. I n a d d i t i o n to m i l l i o n s o f acres o f irrigated l a n d that i s
subjected to flooding, countrys m a j o r r a i l a n d roads are also sometimes affected by super flood events
that keep t h e infrastructure out o f service for long durations.l05

I n his excellent b a c k g r o u n d paper, Asif Kazil6 gives a comprehensive o v e r v i e w o f t h e challenges o f

flood management, o f w h a t has b e e n d o n e (a lot) a n d w h a t needs to b e d o n e (a l o t more). T h e m a j o r
conclusions are as follows:
As in m a n y countries, attention to floods i s episodic a n d goes into h i b e r n a t i o n during periods o f
drought, with devastating consequences (as witnessed in t h e recent drought-ending floods in
Balochistan).
Pakistan has a long-standing a n d sophisticated understanding o f flood management, a n d has
long emphasized both hard solutions (such as dams, embankments a n d drainage works) a n d
soft solutions (such as watershed management, l a n d use p l a n n i n g a n d flood w a r n i n g systems).

56
T h e r e are a number o f factors - including declining storage capacity in the m a j o r reservoirs and
the increased flows likely as a result o f glacial retreat - w h i c h indicate that Pakistan i s likely to b e
entering a n era o f increased flooding.
Flood management always involves d i f f i c u l t trade-offs. Embankments and drains and other
protective structures cannot realistically b e built to such a level that there i s no threat of floods.
And so w h e n floods do occur, they should not b e seen as a failure o f the system, but rather as
a n inevitable part o f the uneasy balance w h i c h i s struck w h e n m a n lives in very large numbers in
a hazardous environment. In addition, populations m o v e into the Indus flood plain, w h i c h
sustains a productive shallow-tubewell based agriculture.
Priority must be given to structural p r o t e c t i o n o f high-value infrastructure assets, the failure o f
w h i c h would b e catastrophic. This obviously includes the barrages, where there i s both need for
urgent structural attention (witness Sukkur Barrage) and attention to bypass floodways that need
to b e properly demarcated and channelized and from w h i c h encroachments need to b e
removed. There are some major structures, such as the Alexandra Railway Bridge over the
Chenab, that need to b e extended to a v o i d choking and flood ponding upstream that causes
frequent inundation o f towns and villages.
A m a j o r p r o b l e m i s that maintenance o f t h e existing flood protection infrastructure i s deficient,
with the result that breaches/damages are not u n c o m m o n . As for all other infrastructure
(discussed in m o r e detail in the next section), there i s a need for a n asset management p l a n and
assessment o f liabilities and mechanisms for regular funding o f these.
W h i l e the concept o f flood hazard land-use planning i s w e l l understood, the fact i s that there i s
little enforcement, and growth o f vulnerable developments in flood-vulnerable areas continues
unabated.
Post-dam records are long enough to give a fairly good indication of the effect o f the reservoirs
but the quality of regulation i s not b e i n g i m p r o v e d by extending the period o f record by
simulating reservoir operation for the pre-dam periods. There i s a need to review the magnitude
o f Probable M a x i m u m Flood (PMF) for m a j o r facilities.
Flood response plans exist but implementation i s weak, with specific priority items b e i n g the
need to raise the level o f awareness, a n d to the timing and reliability o f warnings and how they
are understood b y the general population.
Progressive deposition o f sediment on the river beds, particularly in the l o w e r reaches o f the
River Indus, i s proceeding unchecked. C u r r e n t management o f the p r o b l e m by correspondingly
raising o f the dykes to contain the river every few years i s certainly not sustainable on a long-
t e r m basis.
Flood management i s characterized by short bursts o f feverish activity stimulated by a flood
event followed by long periods o f complacency.. , as the m e m o r y o f flood fades into the past,
the m o t i v a t i o n for action also passes away107
T h e lack o f maintenance i s a very serious institutional and financial issue. Since 1958, with the
transfer o f major development works to WAPDA, provincial irrigation departments functions
were reduced mainly to the operation a n d maintenance o f the systems. PID managers have not
been finding these functions sufficiently challenging, a n d over the years have lost m u c h o f their
initiative, innovativeness and morale. T h e PIDs attention remains almost exclusively focused
on the irrigation distribution network. L e t alone the flood protection works, even the River
Barrages have been in a state o f neglect. Whenever a m a j o r p r o b l e m o f a catastrophic nature
takes place on a Barrage or a flood p r o t e c t i o n embankment, lack o f adequacy o f maintenance
funds i s given as a standard cause w h i c h in several cases would b e valid w h i l e in others not quite
so. D e f e r r e d maintenance has become a r o u t i n e practice with PIDs, w h i c h eventually results
either in a disaster or in a m a j o r repair a n d restoration undertaking in the shape o f a n
independent project.l08

57
In summary, there i s a long tradition o f excellent professional flood management capability in Pakistan.
But the great challenges are those o f m a k i n g explicit but difficult tradeoffs, financing, implementation,
maintenance a n d institutional performance -- in short, the fundamental problems o f development.

Renewing existing infrastructure: A ssing the maintenance gap

Pakistan has a very large stock o f m a j o r irrigation a n d bulk water infrastructure, with a n estimated
replacement cost o f about USJ60 billion109. M u c h o f this infrastructure i s very old, with m a j o r
structures operating w e l l b e y o n d their design life. As described earlier, the services p r o v i d e d by t h i s
infrastructure are critical for national well-being. But the services are only f o r t h c o m i n g if the
structures are maintained and, w h e n their useful l i f e i s over, replaced.

N e i t h e r the Federal G o v e r n m e n t nor any o f the Provinces in Pakistan has a m o d e r n Asset

Management Plan, a n d thus there are no reliable estimates o f the annualized costs of replacing a n d
maintaining this infrastructure. From international experience, a typical figure - assuming regular
maintenance - o f replacement a n d maintenance i s about 3% o f the value o f the capital stock o f water
infrastructure with roughly a half of this b e i n g for replacement a n d h a l f for maintenance. T a k i n g the
case o f Punjab (which has US820 billion of water infrastructure managed by the I r r i g a t i o n
Department) t h i s would imply that the cost o f replacement a n d maintenance o f Punjabs stock o f
water resource a n d irrigation infrastructure would b e about US80.6 billion a year. This would, using
the benchmark ratios, m e a n that Punjab should b e investing a n average o f about US80.3 billion a year
in replacement a n d a similar a m o u n t in maintenance. I n fact there i s no budget for replacement, and
the G o v e r n m e n t o f Punjab budget for maintenance i s about Rs 1.2 billion, or about 6.5% o f the above
benchmark estimate o f the cost o f maintenance. N o w there are several reasons why the costs o f
replacement and maintenance may b e somewhat lower than the above benchmark, but the stark fact i s that the
provisions for replacement and maintenance are a small fraction o f what i s required to maintainthe infrastructure
stock ingood condition.

And t h i s shows. As described by Asif Kazi111: ., .the River Barrages have been in a state of neglect Whenever
a major problem of a catastrophic nature takes place on a Barrage or a flood protection embankment, lack of
adequacy of maintenance funds i s given as a standard cause which in several cases would b e valid while in others
not quite so. Deferred maintenance has become a routine practice with PIDs, which eventually results either ina
disaster or in a major repair and restoration undertakmg inthe shape of an independent project. Some recent
events in the form of breaches in the first line o f protective embankments in Sindh and the current situation at
Sukkur Barrage, are clear evidences of accumulative neglect. In Punjab as well, at present, some six Barrages have
deteriorated to a point that deferred repairs are now being undertaken as major Remodehg Projects. And
Safraz Quereshi112 describes: the deteriorated condition of many distributaries, minors and watercourses, and
their related structures such as gates and outlets - seepage losses along these canals are often hgh and their
hydraulic performance low with the result that the system does not function as it was deslgned or intended.
Thus, plots in ddferent parts o f the command area, but especially near the tail of these canals, would receive less
water than was intended. Government o f Punjab officials estimate that the delivery capacity o f canals i s 30%
below deslgn because of the cumulative effect of deferred maintenance and lack of rehabilitation.

Three further factors exacerbate an already dramatic situation. First i s the fact that large proportions of recurrent
budgets - 76% in the case o f Punjab -- are spent on over-staffed irrigation department staff. T h e politics of
these public enterprises i s such that salaries have the f i r s t call on resources, with maintenance being a residual
priority. Second i s the fact that large amounts (especially in Sindh) are spent on keeping unnecessary public
tubewells r u n t l m g . 1 1 3 Third i s the reality that revenue collection i s low and d e c h n g . I f the true costs o f
maintenance are, say, 0.5% of the value o f the stock o f infrastructure (one half of the international benchmark),

58
then the annual cost of maintaming the system would b e about US315 (or Rs 900) per hectare114. Actual abiana
collection in Punjab, for example, amounts to about Rs 150 per hectare.

T h e result o f this
p a t t e r n of declining
revenues a n d rising Financial Who pays
personnel costs i s a Requirements
p a t t e r n illustrated Financial Who pays
schematically in Requirements Taxpayers
Figure 59. In a
financially-well-
Interest Taxpayers
structured i r r i g a t i o n N o one
system (such as t h a t
in Australia), users Rep1ace-
pay for efficient Users
operations a n d Users
maintenance a n d for Taxpayers
the replacement EfTcient
costs o f the assets
Taxpayers
w h i c h p r o v i d e their
services. T h e
g o v e r n m e n t pays Users
(reluctantly!) t h e
interest on d e b t a. Australia
accumulated in the
past. T h e system
(see p a r t (a) on Figure 59: The financing o f water services in Pakistan
Figure 60) i s clean
a n i the incentives right (for the users to d e m a n d efficient operations a n d maintenance (O&M), a n d
replacement only of essential assets a n d that at least cost). T h e typical Pakistani system i s m u c h m o r e
c o m p l e x (see p a r t (b) on Figure 59). First, there i s a n extra block o f payment to b e made for the
extra costs i n c u r r e d by h a v i n g large numbers o f unnecessary workers. Second, the user payments
represent only a small fraction o f the total m o n e y available for 0&M (including salaries). M o s t o f t h e
O&M allocations are from t h e budget (that is, paid for by all taxpayers), but these amounts typically do
not cover w h a t i s required for O&M, leaving a n u n f i l l e d deficit for O&M. At t h e top end, the
interest on past investments i s paid for by taxpayers. W h a t this means i s t h a t there i s a y a w n i n g gap,
paid for neither by users nor taxpayers. T h i s means that 0&M i s not d o n e adequately a n d - since it i s
last in the queue - there is no investment in replacing aging assets.

And i t means t h a t m u c h o f w h a t masquerades as investment is, in fact, a belated attempt to

rehabilitate the c r u m b l i n g infrastructure, both for i r r i g a t i o n a n d for m u n i c i p a l water supplies. (Most
World B a n k investments in water infrastructure are, in fact, not i n v e s t m e n t in n e w infrastructure,
but a n a t t e m p t to m a k e s o m e inroads into the h u g e liabilities from deferred maintenance.)

T h e contrast between globally-accepted good maintenance-and-replacement practice a n d t h a t o f t h e

systems in t h e sub-continent -- accurately described115 as Build-Neglect-Rebuild -- i s represented
schematically in F i g u r e 60. In t h e good practice case, t h e stock o f infrastructure grows fast in Stage
1 (referring b a c k to t h e Stages illustrated in Figure 19) a n d t h e n tails o f f in Stages 2 a n d 3. But as
this stock grows, so t h e financial demands for maintaining a n d replacing t h i s stock increase. I n t h e
Pakistan case - arguably in Stage 2 - the stock i s s t i l l growing, but t h e finance available for maintaining
a n d replacing that stock has fallen rather t h a n risen.

59
 Annual non-personnel
maintenanceand
rl acement budget

Stage 1 Stage 2 Stage 3

budget
Practice in
Pakistan

Annual non-personnel
maintenance and
replacement budget

Figure 60: Depleting Pakistans infrastructure stock

M u c h o f w h a t i s built i s not being maintained, a n d that w h i c h does s t i l l function, delivers services o f a

low quality. This in turn reinforces the vicious cycle - users who are receiving such poor services
reasonably refuse to pay, meaning that revenues decline s t i l l further and the maintenance a n d
replacement gaps w i d e n s t i l l further. Later in the report, w e look at some ways o f trying to approach
the difficult but vital challenge o f moving from a vicious to a virtuous cycle. T h e r e i s no silver bullet
for this - i t will need dramatic increases in the efficiency o f the providers o f the p u b l i c services, i t will
require transition plans so that i m p r o v e d services c a n induce greater confidence in t h e services a n d
willingness to pay for them, a n d it will require recognition o f a simple financial fact.: there are only two
ways to p a y for infrastructure - from taxes or from user charges. As long as government i s not
prepared to do either or both o f these, there i s no h o p e for building and maintaining the infrastructure
necessary for a m o r e productive economy.

Investing in priority new infrastructure

W h e n river flow i s variable, then storage is required so that the supply o f water can more closely match water
demands. Relative to other arid countries, Pakistanhas very little water storage capacity. F w e 61 shows that
whereas the United States and Australia have over 5000 cubic meters of storage capacity per inhabitant, and
China has 2,200 cubic meters, Pakistanhas only 150 cubic meters o f storage capacity per capita. And Figure 62
shows figures for some major arid basins inthe world. T h e dams o f the Colorado and M u r r a y - D a r k Rivers
can hold 900 days of river runoff. South Africa can store 500 days ini t s Orange River, and India between 120
and 220 days in its major peninsular rivers ( F w e 62). By contrast, Pakistancan barely store 30 days of water in
the Indus basin.

60
 cubic meters per
caDita
6000
5000
4000
3000
2000
1000
0

Figure 61: Storage per capita in different semi-arid countries

Source: World Bank analysis o f ICOLD data

aoo

200

Figure 62: Days of average flow which reservoirs in

semi-arid countries can store in different basins
Source: World Bank analysis of
ICOLD and GDRC data

W h e n the Indus Basin Works were bemg planned, it was clear that the construction of Tarbela and Mangla were
not a "iinal solution", for two reasons. firs^ because it was known that the high silt loads from the young
Himalayas meant that effective storage capaaty would decline over time (Figure 63) and that it was necessary to
build further storage to replace t h i s loss. And second that at such low levels of storage there were - see the
storage-yield curve inF g u r e 64 - substantial benefits from increasing the overall amount of storage inthe system.
T h e PakistanWater Strategy (linanced by the Asian Development Bank) and WAPDA's Vision 2025 have

61
 reviewed likely future demands and t h e implied requirements for storage. I f n o new storage i s built, canal
diversions will remain stagnant at about 104 MAF and the shortfall dincrease by about 12% over the next
decade. T h e PalastanWater Strategy calculates that Pakistanneeds to raise storage capacity by 18 MAF (6 MAF
for replacement of storage lost to siltauon and 12 MAF of new storage) by 2025 in order to meet the projected
requirements o f 134 M A F " 6 .

25

20

4B l5
.-
5
0)

PI0
z
0

0
1975 1985 1995 2005 2015 2025

Figure 63: Sedimentation and storage capacity

Source: World Bank 2003

10 Irrigation 0 Power Ea Flood 1

500

000

500

0 10 20 30 40
Stoiw MAF
0
Basha Kalabagh

Figure 64: Storage-additional yield curve for the Indus Figure 65: Benefits from Basha and Kalabagh

SOWEL Ami? 2005

62
Large dams do not only increase the assurance of water supply, but they can also generate large amounts of
electricity. Currently, about 30% of Pakistans energy i s generated from hydropower117. Eventhough Tarbela i s
operated as an -tion dam (with hydropower a by-product), power benefits account for 60% of t h e overall
economic benefits from the dam118. And (Fgure 65) power benefits would be an even &her proportion of
total benefits from either Kalabagh or Basha.

As shown in
Figure 66,
Pakistanhas used 100%
only about 10% 90% -
of i t s estimated Sapm
80% - Europe
40,000 mw of
70% - I+ North
economically America
viable 60% -
hydropower 50% -
potential., a 40% - Sttuth
propomonmuch 30% - India P.tTieVIc$Z
lower than, say, CElivzcl
20% - MI

10% - 0
India and China
(around 30/o) and + Africa
much lower still 0% I

than rich
countries (around
75%).
Rec0gnm-g the
value of power
which i s not
Figure 66: The development of economically-feasible
hydropower potential in Pakistan in international context

-
subject to market
volatility, which Source: World Bank 2003

generates
&bstantial local economic
multipliers (the mostly-local
construction content of hydropower 100 *Threen91a lndira Sagar
i s about 80% versus about 20% for Sobradinho
thermal power), and which provides + Tehri AswaRariba
hgh-value peakmgpower (which i s s 0 Kalabagh
E 0 Tarbela
likely to be worth about four times 5n Ataturk
t h e value of a unit of base load), U
Pakistan i s planningfor hydropower
Q
;10 e Basha
to provide about half of new E
n
generation inthe medium term119. a

D e c i d q on which dam should be

built involves comparisons on many
axes - economic, financial, technical,
safety, environmental and social - 1 10 100 1000 10000
and multi-dimensionaltradeoffs.
People displaced per rnw
Fgure 67 compares some partial
indicators (usinga log-log plot) of Figure 67: Partial environmental and social indicators
environmentaland social impact of f o r some multipurpose dams
existing and possible future large
Source: Ledec 2003

63
dams inPakistanwith other major multipurpose dams in the world120, usmg very rudunentary indicators. T h i s
suggests that for IGlabagh the environmental and social footprint i s smaller than for most other large
multipurpose dams; for Basha the footprint i s very m u c h smaller. While such comparisons provide a first-order
check, there are many other elements to b e factored inbefore comtng t o any conclusion on the relative merits of
specific dam sites. (For example, while the design of IGlabagh i s well advanced, this i s not so for Basha, where
there are considerable questions about the safe height of a dam). In addition, social costs are not just a matter of
numbers -whereas most of the involuntary resettlement at Kalabagh would b e t o nearby areas, in the case of
Basha resettled populations would have t o b e relocated long distances from their origmal homes.)

Because hydropower produces such a reliable stream of revenues, i t opens the possibility of attracung substantial
amounts of private capital, in a public-private partnership, in which the public sector takes those risks w h i c h it i s
best able to (iicludmg exploration, and the considerable geological risks involved in any major dam construction)
whereas the private sector can shoulder those risks w h i c h it i s best suited to (imcludmg h u n g and operaung
the electricity generaung station). For t h i s potential to materialize, improvements have to b e made ina number of
other aspects - including contracting and pricing practices, the electricity market structure and tradtng rules, water
rights and water use priorities. In addition, environmental and social risks play an important role inthe response
of the private sector which i s usually m o r e inclined to invest inrun-of-the-river projects, of w h i c h there are a
substantial number in Pakistan.

At the time of plantllfig of the Indus Basin works, it was recommended that pl- for the next major dam on
the Indus commence after the construction of Tarbela and Mangla was complete. ThutJyears later, after a n
enormous amount of discussion, there i s s d l not a decision to proceed with construction o f the next dam. T h e
most frequent ostensible reason i s that it i s already-privileged Punjab w h i c h wdl b e the major beneficiary. As part
o f the 1991 Accord, the shares of any increase inwater available as a result of n e w storage are clearly allocated.
As shown in Figure
69, this part o f the
Accord has a strong 1 0 Current Additional A Proportion 1
re-distributional
component, with the 60 5
smaller provinces
50
F
(Balochistan and
Frontier) getting m u c h
larger shares o f the
1 t 4

new water than they * 30

0
have o f existing s 20
AL

allocations. The
shares o f both Sindh
and Punjab would be
a 0
less than their shares
of existing water, Balochistan NWFP Punjab Sindh
with Punjab, in relative
terms, bemg the Figure 69: Who benefits from new Indus storage?
biggest loser. my,
then, such hostility,
and the perception
that n e w storage would disproportionately benefit Punjab? In pan, t h i s i s for legitimate and necessary reasons
(such as the resettlement of substantial numbers o f people and lack of transparenq about who would get the
royalties from power generation), partially for legitimate but resolvable reasons (lack o f transparency and t r u s t in
the implementation of the allocations under the Accord) and partially the discussion o f dams has become a
vehicle for a host o f remotely- or un-related historical and current political gnevances121.

64
I t i s obvious what the Federal Government needs to do. T h e Federal Government needs to give priority to the
development o f the infrastructurein Balochistanand NWFP Provinces to enable them to utilize their allocated
shares in the apportionmentaccord from the existing storages and storages to be created in future including
shares out o f flood flowsl22. T h e Government must also provide objective and understandableinformation (as
has been done, at least in p a as shown in Box 5). More fundamentally, the Federal Government needs to do
everythmg possible to improve the transparency and trust in the implementationo f the current allocations under
the Accord. Here, as described earlier in Section 11, the FederalGovernmentwould be well advised to appoint a
neutral auditor who would have the resources to measure all abstractions from the system and to report these in a
public and transparent way. T h e Federal Government also needs to conclude, as it plans to do, the long-in-
abeyance dispute about releases to t h e delta. I t i s important, too, to actively address the other legitimate issues
relaang to new storage -who dpay? Who will get the contracts? Who will be employed dunng construction?
Probably most important o f all i s who dget the hydropower royalties -will it remain the anachronistic practice
which specifies that whoever has the powerhouse gets all o f the royalties, or will it evolve into a more logical
approach whereby royalties are divided dependmg on location o f dam, power house, area submerged and
populationto be resettled?

Finally, with each o f the many delays inthe past, the economic and social costs for any o f the major options have
risen substantially because o f increases in property values and populationgrowth in the areas of the proposed
dams123. Further delay i s not in t h e interests o f the country.

Box 4: Public Information on Kalabagh D a m (an extract)

On the Government of Pakistan web site http://wu?v.infopak.gov.pk/public/I<alabagh-Dam.hun.

Apprehensions o f Sindh
i) The anxiety that the project would render Sindh into a desert.
ii) There would be no surplus water to fd Kalabagh reservoir.
iii) High level outlets would be used to divert water from the reservoir.
iv) Cultivation in riverine (Sailaba) areas would be adversely affected.
v) Sea water intrusion in Indus estuary would accentuate.
vi) Mangrove forest, which are already threatened, would be further affected adversely.
vii) Fish production and drinking water supply below Kotri would be adversely affected.
Answers:
i) Dams dont consume any water. Instead these store water during flood season and then make i t available on
crop demand basis for the remaining dry periods of the year. The real demonstration o f this came after full
commissioning of Tarbela Dam in 1976. During pre-storage era of 1960-67, average annual canal withdrawals of
Sindh were 35.6 MAF. After Tarbela the corresponding figure rose to 44.5 MAF with over 22 percent increase in
the rabidiversions alone increased from 10.7 to 15.2 MAF. I t i s estimated that after Kalabagh, canal withdrawals
of Sindh would further increase.
ii) WAA o f 1991 has allocated, on the average, about 12 MAF additional supplies to the provinces almost all of
which i s in I U l a r i f season. On the other hand, factually the surplus water i s available only within 70-100 days
flood period. I t i s estimated that to provide additional allocated water over t h e year, a storage of about 3.6 MAF
would be needed (out of this, 2.2 MAF would be in the early I U l a r i f season o f April to July).
iii) Initial studies have indicated that construction of high level outlets at Kalabagh i s economically unviable.
Notwithstandingthis, i f any province wants to build, then i t s share of water would be strictly governed by WAA,
1991.
iv)a. An impression i s also prevailingthat with Kalabagh Dam, riverine areas of Sindh, commonly called
Sailaba would go out of production due to control over floods. I t can be appreciated from configurationo f
riverine area that Sailaba crops are grown on the land adjacent to main river and the creeks. Though crops are
sown on the soil moisture soon after the floods, these need more than one watering to mature. As a result,
Sailaba lands give poor yields. Consequently, farmers are generally required to provide irrigation facility through
shallow tube wells or lift pimps. Prime movers on these tubewells have to be removed during the flood season to
avoid damage.
b Sindh has presently 660,000 acres of Sailaba cultivated area from Guddu Barrage to sea. This area i s
initially sown due to the moisture provided by flooding with river stage of 300,000 cusecs and above.

65
C. Flood peaks above 300,000 cusecs would still b e c o m i n g after Kalabagh, without m u c h detriment to the
present cultural practices, while large floods would b e effectively controlled. This would, in fact, b e conductive to
installation o f permanent tubewells to provide perennial irrigation facility in riverine areas. T o w a r d s this end, a
separate scheme i s being included in NWRDP.
v)a. T h e fear that present extent o f sea water intrusion in the Indus D e l t a would b e further aggravated by
Kalabagh i s n o t substantiated by factual data. Studies indicate that presently the total effect o f Indus estuary is
only l i m i t e d to t h e lower most p o r t i o n o f D e l t a a n d gets dissipated b e l o w Groh a n d Chowgazo. Gauge heights
at G a r h o are completely insensitive t o Indus discharges o f up to 700,000 cusecs. Therefore, the sea water
intrusion, w h i c h seems to b e at i t s m a x i m u m even now, i s unlikely to b e aggravated further by Kalabagh D a m .
b A n o t h e r apprehension i s that sea water intrusion into existing aquifer system would cause serious
quality deterioration. T h e groundwater contained in the aquifer i s effectively saline as far north as Hyderabad.
Therefore, intrusion o f sea water along shore line o f D e l t a i s of little consequence. This i s further supported by
the fact that there i s southward oriented groundwater gradient throughout this aquifer. Considering the very low
transmissivities of the aquifer in D e l t a region, u p w a r d sea water intrusion can b e almost r u l e d out.
vi)a. Out o f the total 1.53 m i l l i o n acres(ihL4) tidally inundated historic Indus Delta, M a n g r o v e forest cover a n
area o f almost 0.32 iMA I n this forest, spreading from I<arachi in the west t o R a n n o f I<utch in the east, 95% of
the population now consist o f a salt tolerant variety.
b. E x t e n t of the active delta area (as distinct f r o m the historic delta area described above) i s about 294,000
acres. Out o f this, the mangroves cover only 7,400 acres or 2.5% of the area. Most o f the remaining area i s in
form o f mud-flats. T h e reason for this area b e i n g t o o small c o u l d b e a combination o f factors. Recently, NED
University o f Engineering a n d Technology has carried o u t a study titled W h a t Really Threatens us a n d Our
Mangroves This brings out that reduction in mangroves i s essentially due to frequency o f tidal inundation b e i n g
too small instead of fresh water reduction caused by upstream abstractions, w h i c h started with Sukkur Barrage in
1932. O t h e r m a j o r causes are uncontrolled overgrazing and cutting due to extreme population pressure o f
Karachi.
C. Therefore, in order t o revive the mangroves, real need i s for replanting salt tolerant varieties with
provision for controlled doses o f fresh water. Obviously, this possibility would b e m u c h enhanced with a n
upstream storage facility like Kalabagh.
vii)a. A recent study has s h o w n that there i s no clear evidence to suggest that fisheries stocks in the river
reach b e l o w I<otri have declined due to progressive reduction in the surface water supplies. On the other hand,
fish p r o d u c t i o n has been constantly increasing as indicated by statistical data. As such, Kalabagh D a m i s unlikely
to have any adverse effect on fish p r o d u c t i o n in the area.
b. In the riverine area downstream to I<otri Barrage, groundwater i s predominantly saline or brackish a n d
as such unsuitable for either irrigation or water supply. A f t e r Icalabagh, winter supply in the river would i m p r o v e
thus assuring m o r e drinking water.

In a d d i t i o n to t h e bulk water, i r r i g a t i o n a n d h y d r o p o w e r i n f r a s t r u c t u r e , P a k i s t a n n e e d s to m a k e
s u b s t a n t i a l i n v e s t m e n t s in w a t e r s u p p l y and s a n i t a t i o n facilities for t h o s e who do not h a v e services in
both r u r a l and t h e r a p i d l y - g r o w i n g u r b a n areas. F i g u r e s 70 and 71 s h o w r e p o r t e d w a t e r s u p p l y
c o v e r a g e figures for, respectively, u r b a n and rural p o p u l a t i o n s in d i f f e r e n t p r o v i n c e s , a n d F i g u r e s 72
and 73 s h o w t h e o f f i c i a l WHO/UNICEF f i g u r e s for 2002. T h e r e a r e o b v i o u s p r o b l e m s with t h e data,
A s in o t h e r d e v e l o p i n g countries, these n u m b e r s a r e p r o b a b l y a b e t t e r i n d i c a t i o n o f t h e i n f r a s t r u c t u r e
t h a t h a s b e e n built t h a n t h e services that a r e a c t u a l l y p r o v i d e d - t h e r e are l a r g e n u m b e r s who do not
h a v e adequate services. T h e i n s t a b i l i t y o f t h e r e p o r t i n g (especially for rural areas) suggests t h a t t h e r e i s
c o n s i d e r a b l e u n c e r t a i n t y a b o u t a c t u a l coverage. And t h e 2002 WHO/UNICEF f i g u r e s s h o w c o v e r a g e
levels for both w a t e r a n d s a n i t a t i o n to b e t w i c e as high in P a k i s t a n as in n o t - o b v i o u s l y - w o r s e - o f f
India.

T h e large subsidies, justified in t h e n a m e of t h e poor, in fact benefit those who get water (who are those who c a n
exert influence on rationed supplies, and are therefore not t h e poor) and those who use a lot of water (the m i d d l e
class and rich). In Karachi, for example, daily w a t e r c o n s u m p t i o n of hghly-subsidized water ranges from 340
liters p e r day p e r capita in hgh i n c o m e areas to 60 liters p e r capita p e r day in s l u m areas17-4, In all cities many of
t h e poor d e p e n d to a large degree on private tanker trucks, and e n d up paying 10 or m o r e times p e r cubic m e t e r
than do t h e r i c h who receive t h e subsidized services through house connections.

66
 Figure 70: Urban Water supply coverage Figure 71: Rural Water supply coverage
S o u n e Iwpmonnmd l i n d . 2 0 0 5 Swnr Siigrmnnond 5hmd.2005

Improved water supply Improved sanitation

0 1990 0 2002] p G 5 i i E
100 1
60
60
40
20
n
Urban Urban Rural Rural
cowed household cowed household Urban Rural
connection connection

Figure 72: Rural Water supply coverage

5 w r a WHOJUNiCEF 2004
I Figure 73 Improved sanitation coverage
Sourci WHOIUNICEF 2004

On the sewerage side, the situation i s similar. T h e rich get subsidized sewers; the poor live in often appalling
sanitary conditions. T h e world-renowned Oratq Pilot Project in Karachi25, conceived and implemented by the
remarkable duo of Akhter Hameed Khan and Arif Hasan, provides sewerage services to over a million poor
people and provides many lessons w h i c h can and are being emulated on a larger scale. T h e k e y lessons
include: how poor people, j u s t l i k e r i c h people, w a n t good quality services; how poor people can
t r a n s f o r m their e n v i r o n m e n t if they are liberated from t h e d e m o b i l i z i n g promises that politicians
never p l a n to fulfLu; how costs c a n b e reduced to a small fraction of standard costs by technical
innovation, elimination o f c o r r u p t i o n a n d m o b i l i z a t i o n o f self-help labor; how i m p o r t a n t i t i s to have
high-quahty technical-cum-social m o b i l i z a t i o n support; a n d how, eventually, there m u s t b e a
partnership between the i n f o r m a l sector ( w h i c h c a n handle m u c h o f the l o c a l infrastructure better t h a n
the municipality) a n d the g o v e r n m e n t ( w h i c h must build t h e bulk collection a n d wastewater treatment
facilities).

T h e p r i m a r y immediate challenges for t h e water a n d sanitation sector are to extend services to t h e un-
served, to i m p r o v e t h e quality o f services to those who are n o m i n a l l y served, a n d to find mechanisms
w h i c h are m u c h m o r e efficient a n d accountable in order to do t h i s . This will m e a n going b e y o n d the
traditional p u b l i c utilities a n d m o b i l i z i n g the resources a n d i n n o v a t i v e capacity o f c o m m u n i t y
organizations (like the O r a n g i Pilot Project) a n d the private sector, large a n d small, domestic a n d
international.

67
A recently c o m p l e t e d study calculates the costs o f providing p r o p e r WSS cover to 90% o f Pakistans
p o p u l a t i o n as US$4.8 billion, with associated annual recurring costs o f over US$ 828 million126. By
comparison, c u r r e n t t o t a l capital a n d recurrent spending o n the water a n d sanitation sector i s about
US3120 million a year. I t is, therefore, imperative t h a t users, especially the non-poor, pay a m u c h
greater proportion o f the costs i n c u r r e d in providing the w a t e r a n d sanitation services they receive.
And i t i s equally i m p o r t a n t to increase investments, a n d t h e returns to these, because t h e sanitary
conditions o f cities a n d towns (as described earlier) are imposing large health, economic a n d
e n v i r o n m e n t a l costs, a n d these can only b e built a n d operated with public funds.

I s Enough Attention Being Given to the Baraniheas OfPakistan? T h e p r o b l e m i s somewhat

different in t h e extensive barani (rainfed) areas outside the Indus basin. W a t e r scarcity in these areas i s
extreme a n d has l e d to unsustainable exploitation of groundwater, rangeland a n d forests. Small dams
on perennial a n d non-perennial streams to capture seasonal runoff, especially flood flows, have b e e n
a n i m p o r t a n t means o f water harvesting a n d water development in the barani areas o f Pakistan for
m a n y years. W a t e r stored in a reservoir i s used principally in two ways: first, seepage from the
reservoir adds to t h e natural recharge o f groundwater increasing water supplies for both i r r i g a t i o n a n d
drinkingwater; a n d second, water c a n b e d r a w n d r e c t l y from the reservoir by a canal or p i p e to m e e t
these same purposes. W h e n conditions are favorable reservoirs are also potentially valuable fisheries
a n d small-scale sources o f hydropower128 .

T h e r e i s a long history o f constructing these types o f dams a n d water harvesting structures in Pakistan
a n d there i s a high d e m a n d for t h e m from farmers a n d villagers in barani areas. T h e r e are f e w options
for water development in these areas o t h e r t h a n to capture the annual though highly variable flood
flows. G r o u n d w a t e r i s u s e d for village water supply a n d for l i m i t e d irrigation, but overuse in m a n y
areas w h e r e i t i s available has resulted in a precipitous decline in t h e water table a n d steadily rising cost
o f pumping. These projects are seen as c o n t r i b u t i n g significantly to groundwater recharge129, a n d if
the site i s favorable, i n t r o d u c i n g a n e w source o f surface w a t e r for farmers a n d villagers.

An i n f o r m a l B a n k study d o n e in connection with the Drought E m e r g e n c y Recovery showed that t h e

cost o f water i s extremely high in these projects a n d that l i t t l e a t t e n t i o n has b e e n g i v e n to c o m m a n d
area development. M a n y in Pakistan would argue t h a t because there are so f e w development options
in these areas the (large) G o v e r n m e n t subsidies i n v o l v e d are not only warranted but obligatory. But
the point of the study was not that subsidies should not b e g i v e n or t h e p r o j e c t should not b e
implemented. Rather, t h e conclusion was that the G o v e r n m e n t should i n s i s t o n a m u c h higher
standard for t h e planning, design a n d i m p l e m e n t a t i o n o f these projects to m i n i m i z e whatever subsidy
i s required a n d m a x i m i z e the real benefits people receive.

68
W h i l e Pakistan s t i l l needs to i n v e s t in s o m e m a j o r water infrastructure, i t i s clear t h a t t h e m a j o r
challenge facing the c o u n t r y i s to m o r e effectively manage both t h e water resources (and t h e associated
natural resource base) a n d t h e water services. T h e e v o l u t i o n also shows t h a t t h e m a j o r successes o f
recent decades - in increasing p r o d u c t i o n a n d in c o n t r o l l i n g water-logging a n d salinity - h a v e b e e n
d r i v e n p r i m a r i l y by t h e a c t i o n o f private individuals pursuing t h e i r own goals. T h e r e v i e w shows three
worrying realities: first, t h a t in c o m i n g decades unmanaged a c t i o n by private individuals i s u n l i k e l y to
give rise to m a j o r p r o b l e m s (especially with groundwater); second t h a t t h e demands on g o v e r n m e n t to
p e r f o r m , both as service p r o v i d e r a n d regulator, are going to b e m u c h greater; a n d third, t h a t
g o v e r n m e n t policies have not yet internalized t h e fact t h a t t h e p r i n c i p a l challenge i s to f o r m u l a t e a set
o f rules o f t h e game t h a t will p r o v i d e organizations (irrigation departments, u r b a n utilities, private
farmers) with the incentives to do w h a t i s in t h e greater c o m m o n good. M a n y countries h a v e h a d to
address similar challenges, in t h e water a n d o t h e r sectors, a n d out o f t h i s experience has c o m e a
d i f f e r e n t vision o f w h a t constitutes a m o d e r n i n s t i t u t i o n a l structure for addressing w a t e r management
challenges.

Principles for a modern institutional structure

T h e r e i s growing recogrution, evident in most o f the b a c k g r o u n d papers by w a t e r experts in Pakistan,

a n d in t h e discussions with experienced Pakistan w a t e r managers, t h a t t h e p r i n c i p a l task in w a t e r
management in Pakistan today i s to design a set o f i n s t r u m e n t s - the rules o f t h e game t h a t determine
how p e o p l e use a n d dispose of water - t h a t are better aligned with t h e looming resource,
environmental, financial a n d e c o n o m i c challenges facing Pakistan. W h a t would a n incentive-based
approach to water r e f o r m in Pakistan i n v o l v e ?

PRESENT FUTURE

Figure 74: The desired evolution of functions and actors

69
Most fundamentally, as suggested in Figure 74, i t would require a m a j o r change in the role o f the state.
T h e government would allow others (including the private sector) to compete for the right to supply
water supply and irrigation services, while the government would turn i t s attention to the financing
(and in some cases the delivery) o f m a j o r storage, flood control, sewage treatment a n d other public
goods and would have as i t s central task the development and implementation o f a n integrated
package of instruments - entitlements, pricing, regulation -- w h i c h would structure the relationships
a m o n g water users so that water i s used efficiently, and environmental and financial sustainability i s
assured.

M a n y discussions o f water r e f o r m in Pakistan (and elsewhere) focus on organizational issues - the

perennial favourites being Water Users Associations (WUAs) and issues such as a N a t i o n a l Water
Council. T h e perspective o f this Report i s that this emphasis should b e on instruments, not
organizations. Accordingly, t h i s section describes each o f the central instruments that would form part
o f a n institutional package o f reforms, stressing continuously that t h i s i s an integrated package in
w h i c h the w h o l e i s m o r e t h a n the sum o f the parts.

Consider, for example, the issue o f irrigation services. In h i s excellent book on the political economy
o f water in South Asia, D a v i d Mossel30 describes the necessary set o f interlocking changes well:
Since irrigation involves w i d e r hydraulic systems w h i c h are b e y o n d the c o n t r o l of W A Sand w h i c h
inevitably render t h e m dependent upon the state, farmers organizations have little chance o f surviving
as independent self-managed social organizations.
T h e next step, therefore, does not lie in knowing
how t o organize farmers organizations.. . but h o w
to overhaul the administrative system so that the
state irrigation departments a n d farmers can b e
bound into productive relations. Participatory
Irrigation Management PIM) cannot become a
reality nor can i t become self-sustaining without
the restructuring o f state irrigation departments., .
W h a t i s striking in PIM programs i s how little
attention i s given to water rights. T h e
governments rights to water are unchallenged,
while i t s obligations to deliver water to WUAs are
rarely legally binding... In short, as illustrated
in Figure 75, a sound irrigation service m o d e l Figure 75: The basis f o r sound irrigation service provision
requires mutually-reinforcing changes in all three
legs o f the stool.

T h e key to putting this new institutional structure in place, therefore, has less to do with the familiar
preoccupation o f how organizations are structured, and has m o r e to do with the incentive structure
w h i c h i s put in place. I t i s to the key elements o f this incentive structure that w e now turn our
attention.

Instruments
T h e variety of problems now in full bloom in the Pakistanwater sector have been wolvmg for some time and
have been the subject o f considerable reflection b y the Government and others. Consider, for example, the
conclusions which have emerged from discussions of the ungation sector, summarized by two o f the principal
actors in these reforms131. Tn the 1990s, after consultations with international agenaes, the Pakistan government
embarked on major institutionalreforms. At the provincial level, the three tiered system o f PIDA, AWB and FO

70
was established, through the PIDA Acts (1997). The FO was to supply water to Imgators,be responsible for
le% and collection of water charges, and make payments to the AWB. The operaung public utility would be
the AWB, with an average command area o f 600,000 hectares. I t would be established at the level of one or more
canal commands, o f which there are 43 in the Indus basin irrigation system. The AWB would manage and
disuibute migation water, through formal volume-based contracts with FOs, and trade water with other utilities.
T h e PIDA would be responsible for such functions as province-wide water delivery, system maintenance and
developmenL and sales of water beyond amounts contracted with AWBs. There has been some progress made
in implementing t h i s model, especially in Sindh. Punjab, the province with the largest irrigated area, played a
major role in articulaang t h i s vision, but then, with a change of leadership, did not choose to put the model into
practice to any s i p f i c a n t degree. Punjab is, once agm, e n g a g q with the reform process, and expects to make
major progress in developing a Tunjab model which i s consistent with the spirit and logic of the above reforms,
but i s adapted to the varying conditions in the province.

W h i l e some progress has been made, it i s also increasingly clear that reforms focussed on WUAs alone
i s like trying to s i t o n a stool with one leg (to use the image captured in Figure 75 above). And the
discussion has focussed far too m u c h on organizational forms, w h e n m o d e r n institutional theory and
practice tells u s that the heart o f the matter i s less organizational form and m o r e the instruments w h i c h
govern relationships a m o n g the various actors. W h a t are some o f the critical instruments (bearing in
mind that there i s no silver bullet, but that the art i s o f constructing a n enabling environment o f
mutually-supportive and mutually consistent instruments.)

Unbundlingand Competition

As discussed elsewhere in t h i s report, the poor quality o f public infrastructure i s a pervasive p r o b l e m in

Pakistan. Studies throughout the world132 have shown that where industries have to self-provide, costs
o f p r o d u c t i o n go up sharply, competitiveness i s reduced and economic growth i s dampened. T h e self-
provision o f water supplies i s just one manifestation of a far broader break-down in public
infrastructure in Pakistan. A recent surveyl33 shows that 42% o f Pakistan manufacturing entities have
captive p o w e r generating u n i t s - a figure w h i c h i s j u s t 16% for China, 17% for Brazil

T h e provision o f f o r m a l irrigation and water supply services in Pakistan i s the virtual exclusive
m o n o p o l y of government agencies, w h i c h do not p r o v i d e services to m a n y - especially the poor and
tail-enders - and provide poor quality services to those who do have access. T h e situation in Pakistan
remains one in w h i c h public monopolies face no competition either in the market, or for the
market (where head-to-head competition i s not possible).

T h e one over-riding lesson from the global revolution in the provision o f public services i s that
competition matters. In some cases, competition in the market i s possible. For example, it i s
technically quite conceivable, in the large irrigation systems to unbundle the bulk and distribution
functions and t h e n have a variety o f forms - cooperatives, the private sector -- for providing
distribution services to farmers. As has happened elsewhere, such changes would unleash a chain o f
healthy systemic changes w h i c h would transform the business o f t h e provision o f public services.
First, i t would require a clear contract between the bulk provider (the I r r i g a t i o n Department) and the
non-governmental provider w h i c h would define the rights and responsibilities (for water and for
payments) o f b o t h parties. T h e absence o f such contracts i s o n e o f the m a j o r reasons why the
monopoly-providers remain unaccountable to users, a n d i n f o r m a t i o n remains so poor and opaque,
As always, discretion and lack o f accountability i s the handmaiden to corruption. Second, i t would
require that costs are revealed, and the distinction between legitimate costs a n d those - such as
massive over-staffing - w h i c h should not be passed o n to users. Third, the entry o f private and other
non-governmental providers would naturally lead to comparisons between the costs and quality o f
services provided by different providers, and thus pressures - for t h e f i r s t t i m e - o n public providers

71
to i m p r o v e t h e i r performance. (This latter factor has, arguably, b e e n the single biggest advantage o f
t h e i n t r o d u c t i o n of the private sector in o t h e r countries. In the US, for example, p u b l i c water utilities
h a v e i m p r o v e d , in large part, as described in a study by the US N a t i o n a l Academy o f Sciences34,
because if p u b l i c utilities did not i m p r o v e they would b e taken o v e r by the private sector.)

Until quite
recently i t was
assumed that
t h e private
sector c o u l d
play a r o l e in t h e
provision o f
f o r m a l water
services in cities
a n d towns, but
t h a t t h i s would JBus Transport
never h a p p e n in
irrigation. JRural roads
Indeed, the mix
o f public and
private financing
for the
provision o f Figure 76:
services does Typical public and private roles in the provision of infrastructure
v a r y w i d e l y for
d f f e r e n t types
o f infrastructure
(Figure 76).

But recent developments have shown that w h i l e m o s t canal i r r i g a t i o n services will r e m a i n in p u b l i c

hands for the foreseeable future, t h e private sector c a n play the same stimulating, competitive r o l e t h a t
it plays in water supply. Political leaders in P u n j a b have raised the possibility o f professional
management contracts whereby a canal c o m m a n d would b e g i v e n u n d e r management contract to a
private sector operator who would operate u n d e r license to p r o v i d e farmers organizations with their
w a t e r entitlements. In o t h e r countries - Chile a n d M o r o c c o - for example, the authorities have g o n e
f u r t h e r a n d g i v e n out reverse concessions w h e r e b y private operators operate p u b l i c i r r i g a t i o n
systems, with the winning operator b e i n g the o n e t h a t requires the smallest subsidy to p r o v i d e t h e
services.

Similarly, in the historically-public business o f wastewater treatment, there i s m u c h i n n o v a t i o n t a k i n g

place. In relatively advanced developing countries, typically less t h a n 25% o f sewage treatment plants
actually function135. T h r e e years ago, t h e Federal G o v e r n m e n t in B r a z i l took a n i n n o v a t i v e approach
to t h i s p r o b l e m . I t set up a fund, called C o m p r a d e Esgoto (or buying treated sewage) w h e r e b y
municipalities are p a i d for t h e p r o d u c t i o n o f treated sewage, not for t h e construction o f treatment
plants. T h e p r o g r a m i s working well, a n d p r o d u c i n g m u c h better outputs t h a n the traditional pay for
inputs approach.

In recent years there has b e e n a lot o f discussion a b o u t benchmarking in i r r i g a t i o n services,

w o r l d w i d e a n d in Pakistan. T h e I n t e r n a t i o n a l Commission on I r r i g a t i o n a n d D r a i n a g e a n d others have
developed a u s e f u l set o f practical tools for benchmarking o f i r r i g a t i o n servicesl36, a n d t h e A s i a n
D e v e l o p m e n t B a n k has p r o d u c e d similarly i m p o r t a n t material for c o m p a r i n g t h e p e r f o r m a n c e o f water
utilities across AsiaI3. T h e c o m m o n reaction to these materials has b e e n for the p u b l i c utilities to see

72
these as technical inputs to b e considered by the engineers o f the agencies w h e n considering i f and
how they might change their modus operandi.

This misses t h e central value o f such tools, w h i c h i s to expose monopolies to f o r m s o f comparative

competition, a n d in w h i c h public discussion and transparency are as i m p o r t a n t as the technical
information. In some casesl38, technical benchmarking i n f o r m a t i o n has been supplemented by
accountability scorecards in w h i c h users are directly asked their perception o f critical service issues.

T h e stimulation o f competition in the irrigation distribution market i s o f high priority. I t will require
a lot o f technical assistance from professionals from countries who have done this (with Australia
b e i n g a best practice case.) I m p o r t a n t questions include: How does o n e ensure a level playing field?
How might workers in the I r r i g a t i o n Departments b e encouraged, as was done in M e x i c o City139, to
form their own irrigation services companies, thus ensuring that their expertise i s put to work, that
resistance to the change i s reduced, a n d even that this helps retrench a heavily over-staffed state? How
should auditing o f performance a n d flows o f water and m o n e y b e done so that audits are trusted by
all? How does one write enforceable contracts up - between the service provider a n d the
government, a n d down between the service department a n d the users? These issues are b e i n g
incorporated into n e w World B a n k financed irrigation projects a n d will b e given high priority a n d
supported with the necessary technical assistance a n d capacity buildingsupport.

In the urban water sector there has been some progress, a n d some roadblocks. T h e progress has been
that some NGOs have been very successful in dealing with the internal issues o f sanitation - in the
OPP case described earlier this has meant self-financed, self-maintained sewers for over a million
people, something w h i c h has been achieved only in f e w other countries in the world. In m a n y ways,
the central idea o f the OPP approach i s similar to that o f the W A Sin irrigation - that local
infrastructure can b e better managed a n d even built a n d financed, by well-organized local people with
effective outside technical assistance. And just as the WUAs depend on the I r r i g a t i o n Departments
doing their work b e y o n d the outlet level, specifying the water entitlements o f the WUAs and providing
these in a predictable, accountable a n d transparent way, so too does the OPP pass responsibility to
the Karachi D e v e l o p m e n t Authority for the external infrastructure (sewer mains a n d treatment
plants). T h e one difference, o f course, i s that the water flows from t h e bulk supplier to the user a n d
the sewage in the opposite direction, m a k i n g these sewage cooperatives m u c h less dependent on the
performance o f the bulk infrastructure manager.

On the u r b a n side there have also been several efforts at breaking up the public sector monopoly a n d
introducing the private sector. These are described in detail in the background paper by K h u r r a m
Shahid 140. T h e most p r o m i n e n t case was that o f Karachi, where the government was pressurized by
labor unions a n d NGOs (who merely wanted K W S B to remain in the public sector) a n d eventually the
project was scrapped following a decision by Sindh High Court that water i s a national asset a n d
cannot b e handed over to private foreign companies. T h e case is s t i l l p e n d i n g in Supreme Court o f
Pakistan. Partial attempts were also made in Lahore, Islamabad, Sialkot, a n d Hyderabad, but in a n
amateur way, with a single p r o v i d e r a n d without transparency, that was d o o m e d to failure141. T h e
G o v e r n m e n t o f Punjab is, appropriately, re-starting a process for Lahore, but this t i m e ensuring that
the process i s managed according to best international practice.

Regulation

A cornerstone of m o d e r n institutional arrangements i s the separation o f regulation from provision. To

date, government agencies in t h e water sector in Pakistan have seen their role primarily as o n e of
provision, and have done little on regulation, even w h e n there i s a legal framework in place for this (as
in the case o f the Water Accord). There are two fundamental areas in w h i c h government regulatory

73
capacity must b e developed - in regulating the delivery o f services a n d in regulating t h e use of water
resources.

On t h e service side, t h e government should

understand that i t s fundamental role i s to
p r o v i d e a n enabling environment, a n d a
regulatory capacity, to ensure that there are
m o d e r n , fair a n d enforceable contracts
b e t w e e n providers (public, private a n d
N G O s ) a n d users, both in irrigation a n d
water supply a n d sanitation. W h e r e t h e
p u b l i c sector does c o n t i n u e to play a m a j o r
r o l e as a service p r o v i d e r (as will b e t h e case
for the foreseeable future) i t is i m p o r t a n t
that these p u b l i c service providers are
corporatized, a n d their operations ring-
fenced from the regulatory a n d p o l i c y Figure 77 Participants in modern regulation

operations o f government. Public

providers, j u s t l i k e private a n d NGO
providers, should h a v e contracts with users (which specify the rights a n d responsibilities o f both
parties, especially with regard to water a n d money) a n d should b e subject to effective, transparent
regulation, the objective o f w h i c h i s to compare obligation with delivery a n d to stimulate c o m p e t i t i o n
by publishing b e n c h m a r k i n g i n f o r m a t i o n . A key requirement, therefore, i s that g o v e r n m e n t develop
regulatory capacity for balancing the disparate interests o f the providers, t h e users, a n d t h e government
i t s e l f (as shown in F i g u r e 77). This i s all quite n e w for the water sector in Pakistan, but there i s l o t s to
learn from the experience of o t h e r countries w h i c h have put such f r a m e w o r k s into place (Australia
b e i n g a n excellent example, because the reforms there h a v e focused heavily on c o m p e t i t i o n a n d a level
playing field, a n d h a v e allowed both p u b l i c a n d private service providers to c o n t i n u e a n active role.
See the websites for t h e W a t e r Services Association o f Australia, for example www.wsaa.asn.au). T h e
emerging experience with a similar m o d e l in MaharasthtraI4* is also of relevance. And water regulators
c a n also d r a w on t h e growing experience in Pakistan with independent regulation in o t h e r service
sectors (such as t h e telecommunications a n d electricity sectors).

I t will take some years a n d a process o f trial a n d error to find the right forms for such service
regulation , especially in a sector in w h i c h the notion o f contracts a n d c o m p e t i t i o n a n d transparency
have b e e n almost entirely absent. I t i s critical to take a learning approach to this, a n d not to see the
f i r s t signs o f difficulties as a reason to go back to the old ways.

T h e second area w h e r e regulation i s essential i s in t h e management of water resources. On the surface

water side, there is, in m a n y ways, already a sound basis for the regulation o f surface water supplies in
place, v i a the entitlements w h i c h are d e f i n e d in the W a t e r A c c o r d a n d which, in m a n y ways, are also
partially defined down to the level o f i n d i v i d u a l users. (This i s discussed in m o r e detail in t h e n e x t
section)

T h e biggest challenge o f a l l on the water resource side i s t h a t o f g r o u n d w a t e r management (which has

to, o f course, eventually b e integrated with the surface water entitlement a n d regulatory system).
G l o b a l experience shows t h a t moving from a n anarchic groundwater management system to o n e
w h e r e there i s a balance b e t w e e n abstractions a n d recharge i s a v e r y d i f f i c u l t one, w h i c h i s less t h a n
perfect even in v e r y good governance environments. Experience also shows t h a t command-and-
c o n t r o l type o f approaches - prohibiting m o r e abstractions - simply do not work, again even in
relatively easy e n ~ i r o n m e n t s l ~T ~h .e essential ingredients o f the least unsuccessful approach are
clear144. G r o u n d w a t e r management requires: a legal f r a m e w o r k w h i c h constrains t h e rights o f people

74
to pump as m u c h water as they wish from their land; t h e d e f i n i t i o n o f ground water entitlements, with
t h e latter usually based on historical use a n d subject to m o d i f i c a t i o n s h o u l d the t o t a l entitlements
exceed t h e sustainable yield o f the aquifer; strong g o v e r n m e n t presence to give legal backing for t h e
d e v e l o p m e n t o f participatory aquifer management associations a n d to p r o v i d e t h e decision-support
systems w h i c h enable aquifer associations to monitor their resource; and, above all, clarity that the
p r i m a r y responsibility for the maintenance o f the resource on w h i c h they depend is with those who
have entitlements to use water from a particular aquifer. T h e r e are m a n y d i f f i c u l t technical details to
b e w o r k e d out - for example, the t r a d e o f f between hydrological reality (which suggests v e r y large
aquifer associations in t h e Indus Basin, since all o f t h e aquifers in the Indus B a s i n are connected) a n d
t h e transactions costs o f i n c l u d i n g large numbers o f small farmers ( w h i c h argues for smaller
associations). Experience in other v e r y large aquifers (such as the Ogallala aquifer w h i c h r u n s from
M i n n e s o t a to Texas) shows that it i s perfectly practical to c h o p a single aquifer up into a large n u m b e r
o f semi-independent aquifers w h i c h are run by a reasonable n u m b e r o f users145. I n the Indus Basin,
this would suggest that the canal command, or possibly the distributary, would b e the appropriate
specification o f the social aquifer unit. In this case i t i s essential t h a t the best does not b e c o m e t h e
enemy o f the good! And it i s i m p o r t a n t to start with several logical possibilities suggesting themselves,
including: f o r m a t i o n o f a n aquifer management association for the Pishin D i s t r i c t a r o u n d t h e KK
Bund in Balochistan, w h e r e groundwater i s b e i n g heavily o v e r d r a w n to t h e detriment o f all; a n d
f o r m a t i o n o f aquifer associations based on t h e geographical areas covered by well-functioning farmer
organizations (or possibly even A r e a W a t e r Boards) in Sindh a n d Punjab. T h e critical thing now i s to
m a k e a start, because i t will take t i m e a n d e f f o r t to develop a n effective model, a n d every day that
passes, the costs o f delay (in terms o f stabilization o f t h e aquifer at a deeper level) imposes escalating
costs on farmers a n d t h e environment.

Water entitlements

Section 2 argued t h a t Pakistan will not b e able to successfully address the m a n y service a n d resource
management challenges i t faces without the i m p l e m e n t a t i o n of a transparent, enforceable system o f
w a t e r entitlements at all levels. M a n y o f the b a c k g r o u n d papers emphasized the i m p o r t a n c e o f this
issue. F a i z u l H a ~ a n I for~ ~ example,
, in a n excellent a n d comprehensive r e v i e w o f water entitlements in
Pakistan, concludes t h a t ownership rights are necessary to realize efficiency gains, i m p r o v e equity o f
distribution, legitimate water sales, reduce deficit a n d p r o m o t e long t e r m investments. L a c k o f
i n d i v i d u a l water rights does not give tail e n d users legal basis for any f o r m a l c l a i m or loss o f canal
water resulting from miss-appropriation by h e a d reach users. Shahid Ahmedl47 reports t h a t farmers
now increasingly c o m p l a i n o f inflexibility o f the IBIS a n d d e m a n d m o r e flexible water allocation,
distribution a n d utilization rules, w h i c h also a l l o w w a t e r t r a d i n g a m o n g t h e water users.

Earlier sections o f t h i s r e p o r t showed that in m a n y respects Pakistan has a v e r y good base -

unquestionably o n e o f the best in t h e developing world - because surface water entitlements
(usufuctuary rights) in t h e Indus B a s i n are already clearly specified a t t h e national, p r o v i n c i a l a n d canal
levels, and, through the wurubandi at t h e level o f i n d i v i d u a l farmers. W h a t i s missing now i s transparent
i m p l e m e n t a t i o n o f these entitlements and, eventually, t h e extension o f t h e entitlement approach to
cover both surface a n d groundwater.

O n c e this i s done, such a management system will give rise to a series o f fundamental a n d healthy
changes. First, those requiring additional water (such as high-value agriculture a n d people living in
growing cities) will frequently b e able to m e e t their needs by acquiring the entitlements o f those who
are u s i n g water for low-value purposes. Second, there are strong incentives for low-value water users
to voluntarily forebear from use, m a k i n g reallocation both politically attractive a n d practical. Since
water allocation in Pakistan i s close to b e c o m i n g a zero-sum game, such voluntary, consensual
approaches to water re-allocation are vital. Third, t h e establishment o f f o r m a l water entitlements gives

75
rise to strong pressures f o r i m p r o v i n g the data required t o manage the resource. And fourth, this
reduces the pressures o f a race t o the bottom o f the aquifer, since those w h o have entitlements have
a p o w e r f u l interest in sustainability o f the resource base.

This i s n o t to imply that the administration o f such a system i s simple, for canal water, let alone
groundwater, in an environment in w h i c h governance i s weak. Nonetheless, the last 10 years has seen
enormous progress globally in the use o f f o r m a l water entitlements - with well-functioning systems
now working in Australia, Chile, Mexico, Argentina and South Africa. (Box 6, from Australia, provides
a particularly clear description o f the central but quite different roles o f water entitlements and pricing
in sustainable water management) I t i s noteworthy that all such established systems are working,
o f t e n after initial adjustments, and are p e r f o r m i n g well. In none o f the countries that have adopted
such systems i s there any thought t o returning t o the previous government-managed allocation
procedures.

L e t t e r to the Editor, The Economst, July 2003):

Your special survey on water (Priceless, July 19) embodes in i t s utle a preludce t h a t expenence from the real world rarely
jusufies. You refer specifically to the expenence of the Murray-Darhng (M-D) basm.

In the M-D,water use i s constrained to equal the sustamable supply through a complex system of water rights, defined in
t e r m s of volumes and secunty of supply. In t h s drought year - the worst for more than a century - many users are receivmg
less than 16% of their normal enutlement, and that restncuon i s enforced enurely through the water rights system not -
through pricmg mechamms.

Formally codfymg these property rights - in systems that were already well managed and orderly, where customers were
educated and accustomed to following rules, and allocauon rules were already broadly m place and enforced - took a number
of decades. Once t h s process was complete, it was possible to introduce a system of trading in these codfied property
rights, allowing managers the flexlblty to better manage the= enterprises (m some areas last year as much as 8% of water
dehvered was traded). The water rights system also provides the basis for improved environmental management. The
parallel system of charging for water services in the M-D i s qmte separate from the sale and purchases of water rights, and
exists to ensure that the income of water supply agencies i s adequate to cover ongoing mamtenance and projected major
capital replacements.

Three lessons may be drawn from this successful achevement of sustamable financial management and sustamable resource
use: First, the primary means o f balancing supply and demand for water resources i s definition o f water rights
consistent with available supply. Ths i s the approach followed in Austraha, Israel, the US, and elsewhere. Second,
defining water rights i s contenuous and dfficult at t h e best of umes. Where water i s already over-allocated so that tnl
enders often get no water, or fresh aqufers are consistently overdrawn to meet current demand, definmg and enforcing
sustainable water rights IS an enormous pohucal and social challenge. Ths i s the case in many water-short developing
countries. Third, the primary role o f water pricing in irrigation i s not to balance supply and demand, but rather to
achieve sustainable financing. Implying, as the Economst article does, that pricmg water has a central role in achieving
the reqmred resource balance IS to grossly rmslead pohcymakers faung the challenge of reducing water consumpuon to a
level consistent with long term avnlabihty and proper environmental management. The soluuon inevitably reqmres stable
and well speufied access rights to water, insutuuons with the capacity to manage t h e water access regime, and appropnate
water pricing to ensure the long term operauon of t h e infrastructure.

Don Blackmore C h e f Execuuve Murray-DarhngBasm Commission Australia

Chns Perry, Professor, Econormcs of Irrigauon, Cranfield Umversity, UI<

Pakistan has l o n g been heading in t h i s drection, as the very important progress in establishing
entitlements at the f a r m level (through the warabandz) over a hundred years ago, t h e n fifty years ago at
the international level (through the Indus Waters Treaty) a n d in 1991 a m o n g provinces (through the
Water Accord). The i s s u e has been highlighted in m a n y forums - it i s a cornerstone o f the 1994

76
World B a n k r e p o r t on i r r i g a t i o n a n d drainage in Pakistan a n d in the N a t i o n a l Drainage Program.
M a n y o f t h e Pakistani professionals who w r o t e background papers for this r e p o r t highlighted this
issue, a n d i t emerged as o n e o f the most i m p o r t a n t areas o f discussion in two m a j o r consultations h e l d
in the course o f developing this report. T h e issue i s now to m o v e to implementation. To which,
naturally, there i s considerable resistance.

T h e r e i s resistance for several different reasons. First, it will inevitably lead to pressures to modernize
the long-established wurubundi system, as described by Shahid Ahmed148: the assumption b e h i n d the
wurubundi c o n c e p t i s t h a t there i s no conveyance loss in the watercourse a n d t i m e equity system will
p r o v i d e reasonable level o f v o l u m e equity - completely a false assumption. Research work a n d pilot
testing on Wurimet7;;csystem by adding the water loss f u n c t i o n in the Wurubundi F o r m u l a was initiated
in India. Similar activity a t least at the pilot scale i s needed in the IBIS. T h e r e i s also resistance
because clarity on water entitlements will inevitably require greater investments in measurement.
(Investments w h i c h would, however, have h u g e returns since, in the words o f t h e Chinese w h e n asked,
in the 1980s by the World B a n k whether they were not measuring w h e n t h e costs exceeded t h e
benefits, answered but if w e dont measure w e cant manage!) And p r o b a b l y m o s t i m p o r t a n t i s
resistance w h i c h emanates from some p o w e r f u l users, politicians a n d i r r i g a t i o n department officials
who are able to use the discretion a n d lack o f transparency in the system to pursue personal profit
at the cost of both others a n d o f broader welfare.

T h e r e are several obvious areas on w h i c h there c o u l d b e r a p i d m o v e m e n t . At t h e national level, there

i s a n urgent need, for a host o f reasons described earlier, to rapidly m o v e towards verifiable,
transparent administration o f t h e 1991 W a t e r A c c o r d . I t i s remarkable, a n d distressing, that for
something so obvious, on w h i c h there i s such b r o a d consensus, a n d w h i c h raises such h u g e political
issues a n d issues o f trust, so little progress has b e e n made. IRSA o f t e n seems to f u n c t i o n m o r e as a
sounding box for the airing o f ancient complaints about the fairness o f t h e formula, a n d o f
contemporary mistrust a b o u t actual abstractions. W h i l e r e f o r m a n d restructuring o f IRSA (so t h a t it
can serve as a basin agency - a n issue w e r e t u r n to later in t h i s r e p o r t -- along t h e lines o f best-practice
cases l i k e the M u r r a y D a r l i n g B a s i n C o m m i s s i o n in Australia), i s v e r y important, this is going to take
time. G i v e n t h i s level o f mis-trust, the Federal G o v e r n m e n t might consider a p p o i n t i n g a n
independent water auditor with the p o w e r to install the necessary measurement devices, a n d the
obligation to m a k e the entitlements a n d f l o w s into a n d out o f t h e system totally transparent (on the
web, at least, a n d p r o b a b l y p u b l i s h e d at least weekly in most m a j o r newspapers) a n d in a w a y that i s
easily understandable to t h e public. In the initial years, w h e n mistrust i s so high, the G o v e r n m e n t
might follow a p a t h similar to t h a t described earlier for the M u r r a y D a r l i n g B a s i n in Australia, w h e r e
n o n e o f the four i n v o l v e d states were willing to t r u s t anyone from another state, a n d so they have a
water auditor who comes from W e s t e r n Australia 3000 miles away to do t h e job periodically (and t h e n
go back home, presumably so as not to b e c o r r u p t e d by nefarious local interests)!

At the p r o v i n c i a l level, too, canal water entitlements are w e l l d e f i n e d (as discussed earlier). Again the
issue is t h e same - m a k i n g these public, m a k i n g p u b l i c w h a t i s actually b e i n g delivered in a transparent
a n d credible way. T h e G o v e r n m e n t o f P u n j a b i s considering doing this, initially a t t h e canal level a n d
eventually all the w a y down - in appropriate forms for each l e v e l - to t h e outlet. In his b a c k g r o u n d
paper F a i z u l H a s a n provides a clear description o f w h a t i s necessary a n d a p r o p o s e d p r i o r i t i z e d a n d
sequenced p a t h (Figure 78) for putting such a management system into place: T h e register of water
rights i s required to b e established at both t h e canal a n d distributary levels. I t will register t h e
withdrawals at the head o f each canal a n d distributary. T h e outlets are t h e most i m p o r t a n t p o i n t s in a
distributary, where withdrawals o f t h e o u t l e t a n d entitlements o f the farmers will b e d o c u m e n t e d in
t h i s register.

77
 Well-defined water Existing water rights of
rights of individuals individuals, reasonably
converted into volumes, defined by area and time,
with systematic registry without reasonable
system.

Clearly defined water

rights, of individuals,

/-
discharge measurement ZOO8
from time based into
volume, by installing the
modern volumetric
discharge measurement
devices

Figure 78: Indicative sequenced and prioritized timetable f o r

implementation of a formal water entitlement system
Source: Hasan, 2005

T h e important thulg now is to start. T h i s should also b e done with immediate effect in Sindh, especially in the
areas where FOs and W A Sare operating effectively, and where there are major questions about the Irrigation
D e p a m n e n t delivenng entitlements and about direct outlets. And it should also b e done immediately at the canal
command level in Punjab, and then d d e d down to the outlets, starting in the areas, such as LCC East, where
FOs are already formed.

Sardar T a r i q a n d Shams ul Mulk149 have summarized w e l l w h a t needs to b e d o n e -- a partial l i s t o f their

r e c o m m e n d a t i o n s includes:
In w a t e r distribution, t h e water entitlements are crucial a n d n e e d to b e streamlined for f u t u r e
management - clear i n d i v i d u a l entitlements n e e d to b e defined.
G r o u n d w a t e r management needs to b e vested in t h e state a n d must address t h e issue of
g r o u n d w a t e r entitlements.
F r e e trade o f w a t e r a n d creation o f w a t e r markets would h e l p resolve m a n y issues.
At m a c r o level, I n t e r - P r o v i n c i a l W a t e r A c c o r d needs to b e reviewed in t h e light o f ensuring
minimum flow for Biodiversity.

Practical steps required o v e r t h e n e x t f i v e (5) years:

D r a f t W a t e r P o l i c y should b e reviewed to address w a t e r e n t i t l e m e n t issues along with o t h e r

issues in m u c h detail.
G r o u n d w a t e r management should b e vested in t h e state.
Guarantee individual entitlements.
0 I n t r o d u c e i n f o r m a t i o n management system as a critical a n d essential activity.
Capacity o f grassroots organizations needs to b e built.

78
 0 Measurement tools need to b e introduced.

Transparency

Central to the three instruments already discussed - competition, regulation and entitlements -- i s the
issue o f transparency. Indeed, one could argue that i f there were a n unequivocal c o m m i t m e n t to
transparency, t h e n all o f the other priority actions a n d instruments would flow from t h i s .

And, indeed, a central feature o f m o d e r n water management in a liberalized economy a n d democratic

environment i s that o f openness a n d transparency. In most countries now all relevant i n f o r m a t i o n -
hydrological, performance, planning - i s available publicly, on the w e b and in real time.
Representative websites show this clearly: TVA in the US (www.tva.gov), the M u r r a y D a r l i n g Basin
C o m m i s s i o n in Australia (www.mdbc.gov.au), the M i n i s t r y o f Water a n d Forestry in South A f r i c a
(www.dwaf.gov.za), the N a t i o n a l Water Agency in Brazil (www.ana.gov.br) to cite just a f e w examples.

Pakistan has b e e n slow and uneven in adapting to this changed i n f o r m a t i o n environment. I t remains
very difficult for a user to even find out w h a t data might b e available. W h e n one reports that there are
concerns about the transparency with w h i c h the A c c o r d i s b e i n g implemented, this i s dismissed as
.
totally false . . someone playing politics.. . w e have the data w h i c h show that this i s not the case.
And i f the (privileged, in this case) interlocutor asks to see the data, a bell i s rung and, indeed, t e n
minutes later a log i s brought w h i c h shows entries in h a n d which, it i s explained, shows exactly w h a t i s
b e i n g taken out o f each canal a n d each distributary. Coming to a judgment o f whether this i s w h a t the
log actually says i s beyond the capacity o f anyone who has not been in the I r r i g a t i o n D e p a r t m e n t for
m a n y years. p h e summary sheet, s h o w n in Figure 40 earlier, k e p t by the Punjab I r r i g a t i o n
D e p a r t m e n t for its 24 canal commands i s a n exception, a n d i s exactly the simple a n d understandable
i n f o r m a t i o n that needs to b e publicly available in real time at all levels). And even i f the eventual
conclusion o f the inquiry would b e yes, i t is, t h e n the very opaqueness o f the process a n d the lack o f
public availability of the data make i t obvious why mis-trust i s so rampant. Discussions with officials -
o f high professional and m o r a l standing - reveal a dssonance about w h a t takes place as a result o f t h i s
opacity. The allocations are made absolutely faithfully, according to the entitlements o f each canal
.
But then.. This i s a very good Minister, not once has h e asked u s to use discretion in his favor.. ...
Or making t h i s public will make the job o f officials o f the I r r i g a t i o n D e p a r t m e n t v e r y difficult
because they will lose the discretion they need to operate the system.

In many instances there i s also a circuitous argument with hydrologists, and irrigation engmeers, who argue that
such systems cannot be put inplace untilthere i s a very good information base available. I t i s obvious that the
pre-existence of such information would be ideal, but in the real world there i s a powerful feedback loop between
data availability, quahty and support for data collection activities. Global experience shows that hydrological,
geohydrological and hydraulic data systems will b e maintained only w h e n the data have meaning for users (for
example, int e h g them whether they are gemng their entitlements), w h e n users can get easy access to the
information, can find the data they need ina user-friendly way, and who can become pressure groups on
government to commit the necessary fundrug to the data collection activities. Indeed, experience in
developed countries (with the US Geological Survey) for example, shows that any attempt by the
executive b r a n c h to c u t funding for the data collection a n d dissemination activities produces a fire-
storm by state a n d local governments, utility managers, farmers, scientists a n d NGOs who depend on
these data. In Pakistan, with such a large, complex, integrated system, quality i n f o r m a t i o n i s o f
tremendous importance, a n d it i s such a healthy, open, demand-driven transparent i n f o r m a t i o n system
that Pakistans water sector should aspire for.

Agau~,in their background paper Sardar Tariq and Shams ul Mulk have s u m m h e d succinctly and well what i s
needed:

79
IRSAs technical a n d management capacities need immediate attention so that t r u s t between the
provinces c a n b e developed in the long run:
Telemetry System to give real time data to Provinces
0 Independent audit of IRSA would create great t r u s t a n d transparency
Transparency in allocation and distribution needed at all levels
Users participation - G o v e r n m e n t m u s t support user participation
0 Capacity building at both c o m m u n i t y a n d agency level

And practical steps required over the n e x t five years:

Prepare register o f entitlement

Readily available i n f o r m a t i o n
0 Installation o f measurement devices and data dissemination
0 Formal G o v e r n m e n t policy for participation and supporting resources.

Knowledge

T h e sustainable management of a huge, inter-linked and very complex natural resource base i s the
single m o s t challenging l o n g - t e r m task for water managers in Pakistan and requires the development o f
world-class capacity in three related areas.

First are the natural sciences. Adaptive management o f the I n d u s Basin system requires high levels of
knowledge a n d understandmg o f a series o f l i n k e d basic natural processes, t h e m o r e i m p o r t a n t o f
w h i c h include: the behavior of the glaciers as climate change proceeds; the fate o f the large amounts
of salt b e i n g mobilized; t h e qualitative a n d quantitative dimensions o f the aquifer systems in the Indus
Basin a n d in the other parts o f the country; the evolution a n d behavior o f the ecosystems o f the delta;
a n d the i m p a c t o f changed s e d m e n t loads on river morphology.

Second are the engineering sciences. T h e plumbing f o r the worlds largest contiguous irrigation system
has underpinned m u c h o f Pakistans development. Pakistan has long been a world leader in hydraulic
engineering a n d in water resources planning. H o w e v e r the c o u n t r y has not invested in maintaining the
-
capacity i t has the once-renowned I n d u s Basin Planning M o d e l s are no longer operative, a n d there i s
no m o d e l o f the basin a n d i t s hydrology a n d hydraulics w h i c h c a n p r o v i d e high-quality i n f o r m a t i o n on
critical planning issues (such as what are the consequences o f different storage options for the
quantity a n d reliability o f water deliveries) or on critical operational issues (with m u c h o f the
distribution o f water through the vast canal system o f Punjab, for example, d o n e entirely by one -
fortunately very competent a n d honest -- p e r s o n relying entirely o n his own judgment). A properly
developed, calibrated a n d maintained suite o f simulation models o f the Indus R i v e r System (see Figure
79), w h i c h can produce quality assured a n d repeatable assessments i s v i t a l for IRSA a n d a host o f
activities related to the development a n d management o f Pakistans water resources.

T h e third leg o f the intellectual stool are the social sciences. Because at the e n d o f the day government
i s going to have to design institutions a n d instruments w h i c h will ensure that the actions o f the
millions o f people who l i v e in a n d o f f o f the natural a n d engineered water systems are in consonance
with the requirements of those systems. And, as described above, the n e w institutional arrangements
are going to b e one in w h i c h interactions with citizens a n d users are going to b e at the core o f such
water management and such interactions are areas in w h i c h engineers - marvelous people otherwise! -
are famously incompetent at!

80
 Backbone

Monthly sunulatrvn

Flood formaring-
daily model
component for key

other models and

processes can use

I
Figure 79: Systems models for planning and management
Source: Don Blackmore, personal communication

T h e bottom line i s that Pakistan needs to build a strong natural, engineering a n d social scientific cadre
capable of working with all users in defining the problem, developing solutions, monitoring, assessing
and adjusting. This i s a capacity w h i c h requires a w i d e range o f disciplines - those necessary for
understanding climate, river geomorphology, hydraulic structures, surface and groundwater hydrology,
limnology, water chemistry, sediment management, hydraulics, soil sciences, terrestrial and coastal
ecosystems, agronomy, plant physiology, industrial organization, conflict management, politics,
economics a n d financing. I t will require a n expansive and long-term h u m a n resource strategy w h i c h
will update the s k i l l s o f the formidable capacity w h i c h exists in Pakistan, but will also strengthen the
capacity o f universities and other scientific and training institutions to produce high-quality applied
research and to train the n e x t generation o f water p o l i c y makers and managers.

Financing

In Section I1 some o f the tremendous financial holes in the Pakistan water sector were described - the
gaping gap between w h a t i s available and what i s required for maintenance o f the existing stock o f
infrastructure (the so-called build-neglect-build m o d e l o f infrastructure financing150); the large
n u m b e r o f people who have no water or sanitation services; and the huge requirements for
environmental management; and the large requirements for building much-needed n e w infrastructure.
Where i s t h i s m o n e y going to c o m e from, and how are priorities to b e set? In considering these
fundamental questions, several factors need to b e considered.

T h e first and most fundamental reality i s that there are only three ways of paying for the costs - they
must be paid either by general taxpayers, or b y users or by g i f t s from abroad (which are very small
relative to the f o r m e r two, and should generally b e thought o f as quasi tax money, a n d subject to the
same tests.) There are two ways o f looking at the water sector in Pakistan today - the f o r m a l sector,

81
b e supporting on a large scale.

A particular challenge in moving towards greater user charges in Pakistan i s that m a n y have m a d e such
large personal investments in coping with poor public services. This has not w o r k e d b a d l y - a
middle-class family in any o f the m a j o r cities actually gets water twenty-four hours a day, even though
the water from the utility comes for just a n hour or two. M i d d l e class families have d o n e this by
m a k i n g large investments to cope. But t h e existence o f these sunk costs poses a particular challenge,
because these users would actually b e n e f i t little, in the short run from m o r e reliable supplies. This
means that, again in the short run, they would oppose higher user charges, even if service quality
i m p r o v e d . T h e y would only b e c o m e supporters in the m e d i u m run w h e n they u n d e r s t o o d t h a t they
did not n e e d to replace their assets (their pump a n d overhead tanks a n d water fdters) because they
c o u l d now rely on the p i p e d distribution system. At the v e r y least this requires t h a t i n f o r m a t i o n on
improvements, a n d t h e savings this brings in the short run (lower electricity costs) a n d m e d i u m run
(no replacement o f equipment for coping) needs to b e m a d e clear a n d c o m m u n i c a t e d effectively. I t
also means t h a t the t i m e span for bringing tariffs in line with costs needs to b e tailored to this reality.

An additional factor that needs to b e factored into the design o f t a r i f f r e f o r m i s t h e fact t h a t the status
quo i s quite satisfactory to m a n y in t h e p u b l i c agencies who profit from t h e discretion w h i c h they
exercise. As D a v i d M o s s e notes in his book on water management51: Only the rare engineer
supports Participatory I r r i g a t i o n Management. Most consider it a f a d t h a t should wear i t s e l f out in
time.. , with fear for the loss of gratuitous incomes should farmers b e g i n to f u n c t i o n independent of
the i r r i g a t i o n department

C o m p l i c a t i n g the situation i s the fact t h a t the anti-reform rhetoric o f increased tariffs will hurt the
poor a n d this will cost jobs has b e e n h o n e d to a fine art, a n d has the strong support o f some
political parties. T h e r e i s no easy answer to t h i s issue, but it i s clear w h a t some of the elements that
n e e d to b e addressed are. On the carrot side, there are creative ways o f providing n e w opportunities
for those in the p u b l i c sector agencies to participate in a n e w service arrangement. As was d o n e in a
successful process in M e x i c o City, p u b l i c workers were g i v e n training, capital a n d preferential access in
setting up firms who c o u l d compete for contracts w h i c h w e r e handed o v e r to the private sector. On
t h e stick side, the g o v e r n m e n t i t s e l f i s c o m p l i c i t in, a n d e v e n the architect o f the present
arrangement a n d i s unlikely to b e a n effective change agent. W h a t i s needed is, as described earlier, to
bring as m u c h as possible into the light o f day - Who has entitlements to t h e water? W h a t i s t h e
contract between the p r o v i d e r a n d t h e user? W h a t are the penalties for non-performance? W h a t i s t h e
performance o f the different providers?

What this means for Federal and Provincial Governments

T h e agrarian e c o n o m y o f Pakistan accounts for a b o u t 25% o f GDP a n d employs a b o u t half o f t h e
l a b o r force. W h i l e t h e transition to a n u r b a n a n d industrial e c o n o m y c a n a n d must continue,
agriculture will r e m a i n central for the well-being o f large n u m b e r s o f people. And i t i s i m p o r t a n t to
recall t h e arithmetic o f water - a p e r s o n requires about 100 liters for h o u s e h o l d purposes each day, but
requires between 3,000 a n d 5,000 liters to p r o d u c e his/her food. M u c h o f the discussion o f a t least t h e
quantitative aspect o f water management is, therefore, p r i m a r i l y about water use for agriculture.

W a t e r i s a k e y constraint to improving agricultural p r o d u c t i v i t y a n d generating jobs. O v e r t h e past

several decades farmers h a v e largely t a k e n the p r o b l e m into their own hands, a n d solved it by
sinking hundreds o f thousands o f tubewells w h i c h p r o v i d e just-in-time water for their crops. To a
substantial degree, t h e m a i n f u n c t i o n o f the canal systems has b e e n to recharge t h e groundwater -
a b o u t 80% o f groundwater abstractions in P u n j a b c o m e from recharge from canals. T h e survival of
the water economy o v e r t h e last several decades has largely b e e n despite rather t h a n because o f the

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state - it has b e e n the tapping o f the unmanaged groundwater by millions o f farmers, by towns and
villages a n d industries that have pulled the economy through. I t i s clear that this era o f productive
anarchy i s now c o m i n g to a n end, since groundwater i s now being over tapped in m a n y areas
(including both the Indus Basin and Balochistan and other non-Indus areas). This poses two very
m a j o r challenges to the state. First, surface water supply systems are going to resume their previous
high importance, and need to b e managed m u c h m o r e accountably and effectively. Second,
groundwater will have to b e managed - for related reasons o f quantity and quality - m u c h m o r e
aggressively t h a n has been the case in the past.

I t i s also obvious that the needs for water are changing substantially, as a result o f agricultural
diversification, urbanization, industrialization, recognition o f environmental needs, climate change and
the evolution o f the natural resource base. Since there will be, i f anything, less rather than m o r e water,
it means that the n e w water economy i s going to have to b e one w h i c h i s m u c h m o r e flexible, in w h i c h
a key will b e the voluntary reallocation o f water from those who need it less to those who need i t
more.

Itis going to require a very different type o f state machinery at both Federal a n d Provincial levels to
meet these challenges. In constructing this new water state, the focus must b e primarily on
instruments w h i c h govern the relationships o f different users with the water, a n d with each other. T h e
logical organizational architecture t h e n i s that w h i c h i s required to manage t h e instruments and order
the relationships between the parties. Some of the key elements o f the new water state will be:
I n t r o d u c i n g accountability, efficiency, transparency and competition into the surface water
supply business. This will mean unbundlingthe business into bulk, transmission a n d
distribution enterprises, with relations a m o n g the parts governed by contracts w h i c h specify
the rights and responsibilities of both parties. This will m e a n encouraging competition b e l o w
the distributaries (with Farmers Associations competing for the market with the irrigation
department) and into the canal commands (where private companies can, again, compete
under a clear regulatory framework with the irrigation department). I n m a n y cases
professionals from the I r r i g a t i o n Departments would b e encouraged to form private
businesses for the provision o f such services, thus ensuring that their s k i l l s are not lost, and
that they do not see the changes as purely a loss o f security. T h e bulk business (operation of
dams and barrages) would probably remain in state hands, but with m a n y m a j o r functions
(such as operation o f p o w e r plants) concessioned out to private operators. A similar
institutional architecture would pertain for the drainage infrastructure.
In such a system (which would take place in a sequenced and prioritized process over m a n y
years), the government would, gradually, play a very different role. I t would corporatize the
state-owned operating u n i t s and develop n e w capacities to do the economic regulation. T h e
government would also b e far m o r e active in groundwater management, where i t has been
largely absent. This would mean developing a n e w legal and regulatory framework for co-
managing groundwater with user associations. I t would mean developing the sophisticated
natural resource management capacity required for management o f the water and l a n d
systems.
A center-piece o f these systems, both surface and ground water, would b e improving the
administration o f a n unusually well-established system o f water entitlements. W h a t i s now
needed i s finalization o f the agreement on environmental flows into the D e l t a (a process that
i s underway) and t h e n implementation o f the A c c o r d in a transparent manner, audited by a n
auditor who is, and i s perceived to be, neutral. T h e same system t h e n needs to b e drilled
down to the canal commands within the provinces (where entitlements are mostly w e l l
established but not transparently administered). And so on down all the w a y to the users
associations and eventually to the farmers. There i s b r o a d agreement a m o n g most water
professionals in Pakistan that this i m p r o v e d administration i s quite feasible a n d that i t would

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increase efficiency, allow flexibility in adapting to scarcity a n d reduce conflict a n d install trust
in t h e system.
A similar, a n d even m o r e difficult, process i s essential for groundwater, since groundwater
reservoirs are already b e i n g m i n e d in the sweet water areas. Again, t h i s will take a w e l l
thought-out, pragmatic, patient a n d persistent strategy. T h e central elements will b e heavy
i n v o l v e m e n t o f users, substantial investments in m o d e r n water a n d agricultural technology,
a n d the state playing a v i t a l r o l e as developing the enabling legislation, as regulator a n d
p r o v i d e r o f knowledge a n d decision support systems.

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This R e p o r t (and m a n y o t h e r documents) makes it clear t h a t Pakistan is going to h a v e to m a k e m a j o r
changes in the w a y in w h i c h it develops a n d manages i t s water resources, a n d that this process has to
start soon. T h e experience o f all countries shows that it i s easy to articulate principles, but t h a t
translating principles into practice i s essentially a n d necessarily a p o l i t i c a l task, w h i c h i s v e r y different in
different historic, cultural a n d political environments. In his b a c k g r o u n d paper, I m r a n Ali152 states the
challenge v e r y well: We have seen above that in t h e institutionally c o m p l e x e n v i r o n m e n t o f Pakistan,
r e f o r m proposals are accompanied by variable, contradictory a n d e v e n c o n f l i c t i n g viewpoints. T h e r e i s
consequently m u c h d i f f i c u l t y in i m p l e m e n t i n g a r e f o r m agenda, since political realities a n d
considerations c o n t i n u e to i m p i n g e on economic efficiency criteria. T h e decision-making environment
has to c o n t e n d with c o m p e t i n g interests, d i f f e r i n g perceptions, unequal p o w e r relationships, a n d
i m p e r f e c t i n f o r m a t i o n . T h e r e f o r e t h e o u t c o m e o f r e f o r m policies usually depends o n the interaction
between supporters a n d opponents. This scenario i s quite different from the assumptions o f
economists who feel t h a t society should m o v e towards m a r k e t oriented models, through institutional
r e f o r m policies based on a rational process o f objectives identification, options evaluation, a n d
strategic choice. Such a n approach c a n b e too simplistic, or lead to strategic errors, i f it f a i l s to
incorporate real world issues, a n d m o r e specifically the role of interest groups, in devising a m o r e
pragmatic set o f r e f o r m sequences.

Reviews o f water r e f o r m e f f o r t s throughout the world suggest that the guiding m a n t r a must b e
principled p r a g m a t i ~ m ~ 5 3 .Principled, because principles m a t t e r a lot. And pragmatic, because
principles c a n only b e translated into practice by following a step-by-step, persistent process, w h i c h
fits with t h e l o c a l culture, people a n d environment. T h i s section reflects on some o f the lessons o f
principled pragmatism in water r e f o r m processes elsewhere154, a n d from r e f o r m processes in o t h e r
sectors in Pakistan. T h e y are presented in the form o f rules (really suggestions) w h i c h a r e f o r m i n g
g o v e r n m e n t might k e e p in mind.

Rule # 1: Water i s different

T h e r e i s m u c h that aspiring water reformers can learn from r e f o r m s in o t h e r sectors - such as p o w e r

a n d telecommunications a n d transport. But i t i s also true t h a t water is, a n d i s perceived to be, different
from these o t h e r created sectors in m a n y fundamental ways. T h e resource economist K e n n e t h
Buildings o d e to water155 captures m a n y o f these distinctions v e r y well.

W a t e r i s far from a simple c o m m o d i t y

Waters a sociological oddity
Waters a pasture for science to forage in
Waters a m a r k o f our dubious origin
Waters a link with a distant futurity
Waters a symbol o f r i t u a l purity
W a t e r i s politics, waters r e l i g i o n
W a t e r i s j u s t about anyones p i g e o n
W a t e r if frightening, waters endearing
Waters a lot m o r e t h a n m e r e engineering
W a t e r i s tragical, water i s c o m i c a l
W a t e r i s far from the P u r e E c o n o m i c a l .

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Rule # 2: Initiate reform where there i s a powerful need and demonstrated demand
far change

H a b i t s o f water management and use, a n d t h e organizations a n d practices involved, have evolved over
t i m e a n d have, at some time, fitted the particular prevalent economic, social a n d environmental
circumstances. Change i s not easy or welcomed, unless there i s a v e r y strong need for change.
Abstract a n d idealized statements (such as river basin management or integrated water resources
management, the m a n t r a o f the international c o m m u n i t y in recent years) have some resonance with
professionals, but do not constitute a reason for organizations a n d people to change the way water i s
managed.

Because changes are d i f f i c u l t and o f t e n wrenching, they will b e undertaken only w h e n there i s a
p o w e r f u l need a n d a demonstrated demand for change. G l o b a l experience156 shows that the impetus
for change i s usually either a serious breakdown in services, or a n environmental failure w h i c h affects
large numbers of people, or a fiscal crisis w h i c h makes t h e status quo untenable.

I n Pakistan today, there are a n u m b e r o f settings where there i s a p o w e r f u l need and demonstrated
d e m a n d for change a n d w h i c h are, accordingly, the areas where reformers should put their initial
efforts. These include:
- T h e r e i s a strong demand from all quarters for clarity o n entitlements a n d for transparent and
impartial delivery o f those entitlements. Predictably, this d e m a n d i s strongest from tail-enders, b e
they provinces or farmers.
- Cities where i n d i v i d u a l households are facing greater a n d greater difficulties in m a k i n g their
coping strategies work, because the groundwater option i s b e c o m i n g a less a n d less tenable
option, and because the breakdowns in regulation (such as in the tragic current case o f
Hyderabad) give rise to strong demands for change.
- For farmers, too, t h e exit option o f self-providing groundwater i s b e c o m i n g m o r e a n d m o r e
costly, increasing t h e pressure on the irrigation departments to i m p r o v e the quahty o f service.
- Agrarian Pakistan i s undergoing a quiet but r a p i d r e v o l u t i o n - contract farming i s increasing,
high-value crops are displacing food grains, aquaculture i s increasing. I n each case the importance
o f a predictable supply o f water becomes vital. T h e r e has b e e n a r a p i d uptake o f drip irrigation
a n d other n e w technologies, but these exit options will not b e sufficient, a n d there will b e
pressures to a l l o w water to m o v e m o r e flexibly a n d voluntarily from low-value to high-value uses.
M u c h o f this now takes place in i n f o r m a l water markets but as agricultural p r o d u c t i o n moves to
scale there will b e pressures to formalize such relationships. Again, this i s a n i m p o r t a n t area
where there will b e demand for changes in water management practices. I t i s striking how lager-
scale progressive farmers are b e c o m i n g a n increasingly articulate voice for change in the
delivery o f i r r i g a t i o n services in Punjab, for example.
- T h e security risks o f deferred maintenance are b e c o m i n g apparent to planning a n d finance
officials in the Federal a n d Provincial governments. In several instances, Secretaries and other
officials in these departments are b e c o m i n g strident voices demanding that p u b l i c resources are
used better, a n d that t h e irrigation departments b e r e f o r m e d to ensure this.

T h e k e y message i s that there are m a n y windows o f opportunity o p e n i n g up for water r e f o r m s w h i c h

will constitute specific, practical solutions to local problems. I t i s these w h i c h will show w h a t can b e
done, a n d will, by p r o d u c i n g tangible results, constitute a pressure on, a n d example for, others to
follow.

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Rule #3: Involve those affected, and address their concerns with understandable
information

People are, for good a n d not-so-good reasons, always apprehensive about changes w h i c h will b e t h r u s t
upon them. And w h e n it involves something as sensitive as water, communication, discussion a n d
i n f o r m a t i o n become central elements for any r e f o r m process. W h a t would this m e a n in Pakistan?

T h e case o f construction o f a n e w d a m on the Indus is a case study in m a n y o f t h e dos a n d donts of

communication157. First, several times in the past the government has believed t h a t a decision c o u l d
simply b e i m p o s e d as b e i n g in the best interest o f the people, without the extensive public
discussion that such a massive a n d sensitive investment merited. M o r e recently, t h e c o m m u n i c a t i o n
e f f o r t a n d political process has b e e n m u c h m o r e appropriate a n d professional. I t has included heavy
i n v o l v e m e n t of Parliament, technicians a n d the media. And it has included some excellent material
(partially summarized in Box 5 earlier a n d available in full o n www.infopak.gov.pk/public/
Kalabagh-Dam) w h i c h acknowledges that different provinces a n d groups have different views a n d
concerns, and w h i c h disaggregates these a n d addresses m a n y o f t h e m in simple a n d clear language.

In developing a political/communications process for reforms, it i s i m p o r t a n t to understand that t h e

present situation (of unclear entitlements, discretion a n d lack o f transparency) s u i t i m p o r t a n t groups in
society. T h e essence o f the r e f o r m s outlined in t h i s paper would b e to reduce monopoly power, a n d
introduce transparency, thus greatly reducing the space for discretion a n d corruption. I m r a n Ali has
described why some groups would t e n d to oppose such changes, a n d outline strategies for neutralizing
such opposition: Larger landowners c o u l d b e t h e most opposed to change, since they have b e e n
g a m i n g t h e system for decades. Clearly, they do exercise political influence, a n d benefit most from the
deinstitutionalized politics that are currently in vogue. However, the attraction o f contracted,
formahzed water rights, with capacity to purchase additional demand through efficient water markets,
c o u l d p r o v e a n adequate trade-off for the pressures o f constant manipulative activity a n d threat o f
water conflict. Also, there i s now, hopefully, a sufficient element o f m o d e r n i z i n g larger farmers who
are m a k i n g a transition to high value agriculture; a n d who approach agricultural p r o d u c t i o n through
capitalistic rather t h a n feudalistic values. T h e engineers and staff o f the PIDs c o u l d b e against these
reforms, fearing they would entail dissolution o f their service, a n d a b r e a k d o w n in existing r e n t
relationships. A n o t h e r disincentive c o u l d b e leaving the relative security o f service with the provincial
government, for m o r e n o v e l contractual work with m o r e transparent and accountable institutions.
W h a t i s critical i s that these fears are real a n d constitute m a j o r barriers to reform, a n d that they cannot
b e wished away. R e f o r m strategies must devise mechanisms for addressing such fears. As described
earlier, I r r i g a t i o n Departments might d r a w on t h e m o d e l followed in M e x i c o Cityl58, where workers in
the water utility were g i v e n privileged a n d in some cases sole access to contracts, p r o v i d e d they set up
- with h e l p - private companies to p r o v i d e t h e h i t h e r t o publicly-provided services. T h e same c o u l d
easily b e done in irrigation departments, for example starting with some o f t h e equipment a n d repair
shops.

W h i l e there i s widespread p u b l i c dissatisfaction with the w a y in w h i c h water i s managed, t h i s does not

m e a n that the p u b l i c at large, or influential groups in particular, will necessarily w e l c o m e r e f o r m efforts
(as i s illustrated by the vehement opposition by some NGOs a n d political parties to private sector
i n v o l v e m e n t in water supply in Karachi). Again I m r a n Ali 159:Fears a n d misgivings o v e r t h e issue o f
water as a n economic good should b e removed, whether these are h e l d by the p u b l i c at large, or
articulated by institutional players, advocacy groups or political elements. T h o s e areas should b e
identified where continued p e r c e p t i o n o f water as a p u b l i c good might b e actually h a r m f u l to t h e
community, carrying various disguised costs such as high i n f o r m a l charges or health hazards. T h e
distinction should b e made with certain programs where water resources can continue to b e regarded
as a p u b l i c good, such as in t h e management o f t h e larger drainage a n d flood c o n t r o l systems.

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Finally, such discussion i s necessarily political a n d must necessarily take into account the political
realities o f each country. Again I m r a n Ah: The fact t h a t roughly h a l f o f Pakistans existence has b e e n
u n d e r m i l i t a r y r u l e gives little clue as to w h i c h direction p o p u l a r choice would take t h e country. T h e
civilian regimes o f the 1990s did m a i n t a i n a steadfast c o m m i t m e n t to m a r k e t forces, a n d this c o u l d
continue in the future with a m o r e complete r e t u r n to civilian politics, except if religious-oriented
parties c a n succeed in stigmatizing W e s t e r n influences. Therefore, a prerequisite for t h e success o f the
r e f o r m process will b e c o n t i n u i t y in the states strategic directions. T h e certainty o f such continuity
would have b e e n m o r e plausible h a d these issues been discussed m o r e comprehensively in the nations
parliament, or o t h e r representative forums. . . ..The World B a n k s h o u l d endeavor t h a t such a
discussion a n d debate does take place, so that the o u t c o m e i s seen as the p r o d u c t of popular support,
rather t h a n a n arbitrary imposition. Perfectly, rational a n d b a d l y needed r e f o r m s c a n suffer i f the
process of a d o p t i o n a n d decision-making i s not transparent.

Rule #4: Reform i s dialectic not mechanical

Ideas l i k e river basin planning a n d integrated water resources management have sound conceptual
roots, a n d appeal to technicians, m a n y o f whom perceive i m p l e m e n t a t i o n of these ideas as the p a t h
towards better water management. U s e f u l as they are, in the words of t h e Operations Evaluations
D e p a r t m e n t o f the World B a n k progress takes place m o r e through unbalanced development t h a n
comprehensive p l a n n i n g approaches160. As K a r l M a r x (had h e addressed t h e subject!) might have said
it as follows: water r e f o r m i s a dialectic, not mechanical process.

I m p r o v e m e n t s in water management occur w h e n there are tensions (between users, between users a n d
the environment, b e t w e e n the water agencies a n d t h e finance ministries) w h i c h c a n no longer b e
accommodated within the existing institutional arrangements. But r e f o r m s do not lead t o nirvana -
they simply m e a n t h a t lower-order tensions are replaced by higher-order tensions. T h a t i s the
yardstick by w h i c h r e f o r m s should b e judged.

Rule # 5: Its implementation, stupid

Lawrence Summers has observed161 t h a t the great distinction b e t w e e n developing countries w h i c h have
progressed o v e r the last 30 years a n d those that have stagnated i s not t h e ability to formulate perfect
policies, but t h e ability to translate reasonable policies into actions on t h e ground. Paraphrasing Bill
Clintons famous election mantra, its implementation, stupid.

And so i t i s with water in Pakistan a n d elsewhere - policies a n d recommendations abound, some v e r y

good. W h a t matters i s i d e n t i f y i n g i m p r o v e m e n t s that c a n actually b e implemented.

Rule #G: Develop a sequenced, prioritized l i s t of reforms

Any journey requires a knowledge o f the destination a n d a r o a d m a p for getting there. H o w e v e r , the
journey itself i s taken step by step. And so it i s with water r e f o r m s - there must b e a l o n g - t e r m vision,
but i m m e d i a t e a t t e n t i o n must b e on putting f i r s t things first - to sequencing a n d prioritization. T h e
practice o f (aborted) water r e f o r m by g o v e r n m e n t agencies in Pakistan (reinforced by some o f i t s
external supporters) has o f t e n b e e n to m a k e everything (and therefore nothing) a priority, a criticism
w h i c h has o f t e n b e e n leveled at t h e over-ambitious N a t i o n a l Drainage Project.

A relevant example o f a p r i n c i p l e d but pragmatic approach to sequencing relates to t h a t o f cost

recovery for i r r i g a t i o n services. Cost recovery is, of course, a n appropriate aspiration, but i t i s almost
never t h e place to start. Farmers will not a n d should not, p a y for t h e costs o f poor services w h i c h are
delivered by i n e f f i c i e n t a n d c o r r u p t agencies. T h e first step must b e to address t h e issues o f

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accountability a n d efficiency (as described earlier in this report). O n c e services are i m p r o v e d and there
i s t r u s t in the service provider, t h e n t a r i f f increases to bring revenues in line with costs becomes
possible. As described in the u r b a n water supply example in Guinea, A f r i c a (Figure 80), public fundmg
will generally b e necessary, on a declining basis, to finance the transition.

Rule #7: Be patient and persistent

Water r e f o r m processes are never short, decisive affairs. A review o f t h e experience o f r i c h countries
by t h e OECD162 shows that progress in water r e f o r m s takes place o v e r decades, not years, and that
even the most advanced o f countries i s only about half w a y towards the ideal f o r m s of water
management described in declarations o f i n t e n t by t h e countries themselves a n d by the international
community163. Moving from, say, 30% okay to 40% okay over the course o f a decade i s a
reasonable aspiration.

Rule #8: Pick the low-hanging fruit first - nothing succeeds like success
T h e world over, citizens are either concerned or skeptical about announcements o f reform, with
some advocating abolition o f the word from the p u b l i c p o l i c y lexicon. By casting their agendas as
reforms, political advocates dont aim to stimulate debate a n d discussion. T h e y aim to suppress it.
T h e y a i m to stigmatize adversaries as nasty, wrong-headed, selfish or misinformed. T h e trouble i s that
as a society, w e need debates over principles a n d practicality. All r e f o r m s are not desirable, at least not
to everyone.164

T h e corollary i s that p u b l i c support will only build i f there are visible, tangible results from the changes
w h i c h are advocated. T h e k e y i s show me.

I t certainly can h e l p to show opinion leaders that these changes have been affected in other countries.
T h e f o r m a t i o n of t h e famous F r e n c h River Basin management system in the 1960s was strongly
influenced b y t h e successful experience o f the Ruhrverband, established in neighboring G e r m a n y in
1916. And the political leaders o f the water r e f o r m process in B r a z i l ascribe high importance to a
study tour o f M e x i c o a n d Colorado at a critical time. But there i s nothing like demonstration on h o m e
territory. And since changes are always difficult, it i s imperative to start changes where conditions are
propitious - w h e r e there is a real demand for change, where there are champions, a n d where i t i s
possible to show results.

Rule #9: Keep your eye on the ball - dont allow the best to became the enemy of the
good

Almost any progress i s progress worth making, w h e t h e r or not i t measures up to some abstract global
notion o f excellent. T h e idea that practice can go from terrible to perfect in one fell swoop i s one
that i s attractive to outsiders and i s sometimes adopted by financial agencies (so-called Volvo instead
o f Volkswagen standards165). But it f i t s poorly with t h e one-step-at-a-time gradualism w h i c h
characterizes water reforms, everywhere.

A good example o f t h e the best i s the enemy o f t h e good r u l e a t work i s the justly-famous I n d u s
Treaty, w h i c h has, since i t s inception, h a d i t s detractors in both Pakistan and I n d i a as not fair166.
Confronting the Pakistani detractors o f the Treaty Ayub K h a n gave advice w h i c h i s relevant for all
would-be water reformers: very o f t e n t h e best i s t h e enemy o f t h e good a n d in t h i s case w e have
accepted the good after careful a n d realistic appreciation o f our entire overall situation.. ,.. the basis o f
this agreement i s realism a n d pragmatism. . .,I67

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Rule #lo: There are no silver bullets

T h e challenges w h i c h Pakistan faces in water management are environmentally, socially, and technically
complex. There i s a justifiable, h u m a n fantasy that there i s a single silver bullet w h i c h will solve the
problem. I n some parts of the Pakistan water establishment today there i s s t i l l faith that the old
remedy - m o r e dams, a n d variants o f this - will solve all water problems a n d should b e given near-
exclusive priority.

W h a t i s clear i s that the most effective responses to the water challenges in Pakistan are going to vary
very widely and are going to require a host o f interventions, o f all different scales. As suggested by the
Stages o f water development in Figure 19, the m a j o r instrument i s not going to b e infrastructure
alone, but management supported by both old a n d n e w types of infrastructure, large and small.
Management i s going to m e a n systemic sets o f legislation, capacity building, organizational change
a n d the use o f entitlement, p r i c i n g a n d regulatory instruments. And it is not going to b e the task of
government alone, but concerted a n d reinforcing actions by a h o s t o f stakeholders. But that there
were a silver bullet!

Rule #11: Dont throw the baby out with the bathwater

A corollary o f the previous rule i s that there i s a tendency w h e n the silver bullet does not work (mixing
metaphors badly) to throw the b a b y out with the bathwater. D a m s (or the N G O - p r e f e r r e d supply-side
alternative, rainwater harvesting) are propagated with missionary zeal, a n d w h e n they do not deliver
communities to the promised land, they are stigmatized a n d it i s argued that they should no longer b e
p a r t o f the toolkit.

Take the example o f dams. T h e r e i s a n energetic a n d resourceful anti-dam lobby in Pakistan. Spurred
by legitimate issues such as the lack o f t r u s t in administration o f the Water Accord, a n d the effects o f
ever-greater water abstractions o n the people o f the Indus Delta, a n d pulling in a host o f historic un-
related grievances, these groups (working together with international anti-dam groups) have
identified a n e w d a m on the Indus as the greatest curse that could befall the people o f Pakistan in
general and Sindh in particular.

Take another example, that o f Water Users Associations. T h e idea o f WUAs transforming irrigation
services has been, and is, a p o w e r f u l a n d persistent one, despite mountinga n d long-standing evidence
that reality i s a bit m o r e complicated. Similar evidence from around the world notwithstanding, the
idea has h a d remarkable staying p o w e r in the global water community, again, because o f their p o w e r
as narrative, these accounts are rather invulnerable to empirical evidenceG9.

For some the case i s clear: the idea o f WUAs i s partly a cruel trick played so that the m o r e difficult
issues - o f real r e f o r m o f the irrigation agencies a n d the ceding o f enforceable water entitlements - can
b e avoided. But the fact i s that organized farmers & play a role in all successful irrigation schemes
throughout the world, but only as a p a r t o f a set o f reinforcing instruments, w h i c h always include water
entitlements and accountable service delivery agencies. T h e WUAs should not b e thrown out with the
bathwater but propagated as p a r t o f a n overall r e f o r m package. T h e distinction between necessary and
sufficient conditions for progress i s a vital one.

Rule #12: Reforms must provide returns for the politicians who are willing to make
changes

Politicians m a y not b e the most revered figures in Pakistan (or elsewhere), but i t i s they who are in the
game, who are elected to m a k e crucial tradeoffs, a n d who have the critical role as judges a n d

91
champions o f reform. A discussion with politicians who have l e d water-related reforms throughout
the world170 found general agreement in a rule that: If it i s to work, water r e f o r m must b e good
politics.1

T h e bottom line i s that a n essential element o f any r e f o r m p r o g r a m i s that must b e viewed as a good
thing by sufficient numbers o f people that they will consider voting for the politician who
championed the reform.

T h e r e are two i m p o r t a n t riders to this rule. First, i t i s o f t e n quite difficult to judge how actions
relating to water are being received by citizens. For example, consider the conclusions o f a recent
book on how environmental reporting i s done in the English-language a n d vernacular press in India.
A n y o n e reading the English language newspapers o f I n d i a would perceive that the Sardar Sarovar
Project on the N a r m a d a River i s almost universally opposed. However, a detailed analysis o f press
coverage by Sussex Universityl72 showed that the picture was considerably m o r e nuanced.
Environmental debate in I n d i a i s governed by the language in w h i c h it is presented a n d understood.
T h e message c o m i n g out o f India, most likely to b e heard by the developed world, comes out o f i t s
English language media, representing just 2% of the population. T h i s elite group has adapted a pro-
environment stance a n d i s m o r e likely to protest against n e w dams. ... But inside India, t h e far bigger
local language media representing the vast majority a n d poorer sections o f society are expressing the
heart-felt c r y for development

Second, a n d related, i s the fact that on any r e f o r m proposal there will b e a cacophony o f voices.
Sometimes Ifeel as if theres a completely false assumption that i f only you talk to everybody you will
get a n agreement. Only on a very boring issue or in a very boring country would you find that. To my
mind the debate . ... .
D o e s not eliminate the need for political risk.. At the e n d the government has to
take the risk . . ..
13 In short, w h i l e all voices must be heard, m u c h greater weight must b e given to
the voices o f those who have responsibility a n d face the voters a n d l e s s weight to those who are self-
appointed or who represent small special interests.

92
 LE OF TH

What the Bank has done in the past

Water Resources and Irrigati~n~

The World Bank has played a central role in the development o f Pakistans Indus Basin Irrigation
System, t h e largest integrated irrigation network in the world. The Banks partnership with Pakistan in
the water sector dates back to 1952 when the f i r s t loan was approved for a water project in the then
East Pakistan. I n the 1950s, t h e Banks good offices were instrumental in the successful negotiations
of the Indus Waters Treaty (1960) between Pakistan and India, which settled the division o f t h e waters
o f Indus Basin between the two countries following Partition in 1947. After the signing of the Indus
Waters Treaty, the Bank helped to mobilize funds and administered the Indus Basin Development
Fund (IBDF) during 1960-1967, which financed the physical works to implement t h e Treaty
provisions, also known as the Indus Basin Development Project (IBDP). Subsequently, from 1968
onward the Bank administered the Tarbela Development Fund (TDF),which was extended to the
post-Tarbela construction period during which extensive remedial works were implemented after the
first impounding o f the Tarbela reservoir. Thereafter, the Bank played a catalytic role in periodic
major reviews of the irrigation and power strategy and funded parts o f the resulting investment
programs.

Altogether, the Bank has, so far, supported 40 operations in the irrigation, drainage and water
resources development with thirty six 175 IDA Credits (US$ 13,455 million in 2005 prices) and four
IBRD loans (US$ 5,807 million). During t h i s period, these operations constituted 16.5% o f the total
Bank lending to Pakistan. The background paper by Usman Qamai-176 includes a complete l i s t o f Bank
operations in the water sector and the sub-sectoral composition o f i t s water sector portfolio since
1952. As shown in Figure 81, annual lending for water-related projects has varied between $620
million a year in t h e period 1960-1970, to a low of $20 million a year in the most recent period (2001-
2004).

0 Major InfraStNcture 0 Irrigation and Drainage 0 Floods oUrban WS&S

0 Rural WS&S m m Hydra +% all Bank lending

600

500
ki
e
*
v)
400
3
uz
8 300
0
N

2
c
200

-.-
C
-
5 100

0
1952.1960 1961-1970 1971-1980 1981-1990 1991-2000 2000-2004

Figure 81: World Bank Lending t o Pakistan f o r Water-related

Sectors -- 1952 t o 2004
Source: World Bank 2004
In addition to financing specific investments, t he Bank also supported Economic and Sector Work
(ESW) and provided Analytical and Advisory Assistance (AAA) that culminated in several major sector
reports, includmg: Water and Power Resources o f West Pakistan: A Study in Sector Planning:
(popularly know as t h e Lieftinck Report 1967); Revised Action Program (RAP) for Irrigated
Agriculture (1979); the Water Sector Investment Planning Study (1991); Pakistan -- Irrigation and
Drainage: Issues and Options (1994); and Accelerated Development of Water Resources and Irrigated
Agriculture, prepared as part o f the Public Expenditure Review carried out in 2003. I n addition,
several sector policy and planning studies, includinga draft National Water Policy, 2002 and a
framework for a Drainage Master Plan for the country were prepared through the technical assistance
components o f Bank-assisted projects as well as various Trust Funds managed by the Bank, including
the Bank-Netherlands Water Partnership Program.

The evolution o f the water sector in Pakistan, and the Banks lending and non-lending assistance can
broadly be divided into the following somewhat overlapping times periods.
1960 - 1975 -- the Post-Indus Waters TreatyPeriod
Prior to 1960, Banks involvement in t h e sector was limited to seven projects in the then East Pakistan
for irrigation, flood rehabilitation and water supply for a total amount o f US$3,832 million equivalent
(current prices). Following the Indus Waters Treaty, the focus of investments and the emphasis o f
Bank assistance was o n meeting the water requirements o f areas that were earlier served b y the eastern
tributaries o f the Indus River (Ravi, Beas, and Sutlej) whose waters were allocated to I n d i a as part o f
the Indus Waters Treaty. This was imperative to avoid a food grain crisis that could seriously harm the
new nation. The 1960s saw the construction o f major IBDP works, including the Mangla dam and a
network o f barrages and inter-river link canals and subsequently the Tarbela dam. I t i s worth noting
that the Bank did not do a n economic analysis o f Mangla, because construction of the dam was
deemed to be essential for t h e survival o f the country. Besides i t s role as the Administrator o f
IBDF177, the Bank supported the IBDP through two IBRD loans and one IDA credit (see Table-1).
The twin menaces o f salinity and water logging and the need to provide drainage in many parts o f
t h e Indus plain were also recognized at this time. I n response to these strategic threats, a public
program using tube wells and surface drains was launched to lower the water table and reclaim saline
soils. The 1960s witnessed the beginningof the Sahnity Control and Reclamation Program (SCARP).
The Bank supported this program through two IDA credits.
Table-2: Bunk Assistunce During 1960-1970

Amount
Amount Approval
Sr. # Financing Description us $ us $ Date
(Current) (2004/05)
1 IBRD The Indus Basin Project 90,000,000 4,617,000,000 13-Sep-60
2 IDA Khairpur Irrigation 21,154,434 1,085,222,464 29-Jun-62
3 IDA Indus Basin Project 70,619,397 3,530,969,850 16-Jul-64
4 IBRD Tarbela Dam Project 25,000,000 977,500,000 2-Jul-68
5 IDA Khairpur Irrigation & 14,000,000 519,400,000 23-Jun-70
Drainage
Total 220,773,831 10,730,092,314

94
T h e 1960s might b e t e r m e d t h e heyday o f the water sector in Pakistan w h e n massive investments in
the sector c o u p l e d with the i n t r o d u c t i o n o f high yielding varieties (HYV) o f w h e a t heralded the green
revolution. A g r i c u l t u r a l growth, w h i c h was sluggish in the 1950s (about 1.4%) a n d less t h a n h a l f t h e
p o p u l a t i o n growth rate, became the k e y engine o f overall e c o n o m i c growth, a n d there was no m a j o r
food grain crisis. This enormous achievement was fruit o f t h e following two m a j o r initiatives:
From t h e late 1960s through 1975 river diversion capacity was expanded from 67 Million A c r e
Feet (MAF) at independence to a n annual average o f nearly 104 MAF today; t h e Indus
Replacement Works, foreseen in the Indus Treaty signed with I n d i a in 1960, i n c l u d i n g the
M a n g l a D a m w e r e completed a n d the Tarbela D a m was also constructed. This investment
p r o g r a m expanded the Indus basin i r r i g a t i o n system, increased h y d r o p o w e r generation
capacity, a n d increased c r o p p i n g intensity on t h e I n d u s plain; and.

D e s p i t e under-investment in research a n d development, p r i c i n g a n d subsidy policies set the

stage for t h e i n t r o d u c t i o n o f i m p r o v e d a n d high yielding varieties o f seed from the late 1960s
as both fertilizer a n d i r r i g a t i o n water avadability expanded (the green revolution) - From
1970 to 1994/95 t h e value o f wheat production, the staple crop, nearly d o u b l e d from 6.476
Mt in 1970-71 to 17.002 Mt in 1994-95.
T h e timely c o m p l e t i o n o f t h e mega IBDP i s acknowledged as a m a j o r feat o f efficient p r o j e c t
management by Pakistan, international cooperation a n d best practices. T h e Indus B a s i n Project
C o m p l e t i o n N o t e (May 1993) stated that:

The I n d u s B a s i n Works have fulfilled their basic replacement objective

(arising from t h e diversion o f water to India) a n d p r o v i d e d a small i n c r e m e n t
o f water; t h a t t h e growth in water supply, especially through tube wells, h a d a
significant i m p a c t o n agricultural production; a n d t h a t t h e increase in p o w e r
supply h a d b e e n v e r y cost effective.
Similarly, the Tarbela D a m Project C o m p l e t i o n R e p o r t (1984) concluded that:

the entire Indus B a s i n Project stands as a m o n u m e n t to international

cooperative effort, in a large p a r t guided by the Bank. T h e i m m e n s e system
o f replacement works consisting o f Tarbela dam, six barrages a n d eight link
canals was constructed during the p e r i o d 1961-68 - two years ahead o f t h e
Treaty deadline.. . N o o t h e r project o f such size a n d c o m p l e x i t y h a d b e e n
constructed in such r e c o r d time.

W h i l e the IBDP was a success on most accounts, the Tarbela PCR a n d OEDs Project Performance
Audit R e p o r t (PPAR) highlight some aspects that s h o u l d have received m o r e a t t e n t i o n during the
p l a n n i n g stages:

Tarbela dam, t h e last o f the IBDP works, was m o r e t h a n a Replacement Work, as additional
water supplies w e r e expected to b e c o m e available. H o w e v e r , during the p l a n n i n g stage it was
unclear as to how this additional water would b e integrated in t h e n a t i o n a l i r r i g a t i o n system
for best use. Revised water allocation (water rights) a m o n g provinces a n d canal c o m m a n d s
were not in place78.

C o m p l e m e n t a r y investments in agricultural development179 did not receive adequate attention;

T h e d e v e l o p m e n t o f institutional capacity to c o n d u c t research a n d t r a i n i n g in Pakistan on

water resources engineering a n d management was not a n i m p o r t a n t area o f B a n k concern; a n d

T h e i m m e n s e e f f o r t represented by the IBDP a n d Tarbela programs inevitably absorbed t h e

m a j o r proportion o f external a i d as w e l l as significant amounts o f domestic resources. I t also
tended to d i v e r t a t t e n t i o n away from d o w n s t r e a m p r o b l e m s associated with t h e operation o f
Pakistans e n o r m o u s n e t w o r k o f i r r i g a t i o n facilities a n d l a c k o f adequate drainage

95
 infrastructure. As a consequence, over time, the water table underlying t h e Indus p l a i n rose,
leading to serious problems o f water logging a n d soil salinity in certain areas.

The Post-IBDP Period (1975-1993)

T h i s p e r i o d c a n b e sub-divided into two overlapping t i m e frames:

1975-1985: Emphasis on addressing water logging a n d salinity problems through a Salinity

Control a n d Reclamation P r o g r a m (SCARP) a n d integrated irrigation a n d drainage
interventions (the concern o f sustainability o f irrigated agriculture was t h e main driver), a n d

1979-1993: I m p l e m e n t a t i o n o f the o f the Revised A c t i o n P r o g r a m (RAP) for Irrigated

Agriculture -- emphasis on system rehabilitation, water conservation, i m p r o v e d management,
farmer participation, and sustainability (improved 0&M and cost recovery through
privatization o f public tube wells: the SCARP Transition program)

With t h e expected c o m p l e t i o n o f IBDP and Tarbela d a m in t h e mid-l970s, GoP shifted emphasis to

resolving water logging a n d salinity problems, a n d in 1973, launched a n accelerated program o f
water logging a n d s a h n i t y c o n t r o l (SCARP Program), building upon t h e success of t h e p r o g r a m o f
vertical drainage (through tubewells) a n d surface drains, started in t h e 1960 (e.g. SCARP I). Planning
studies undertaken in t h e 1960s reinforced this approach, identified additional areas suitable for
SCARP projects, p r o p o s e d a m a j o r system o f surface drains to dispose off saline effluent, a n d
emphasized i r r i g a t i o n benefits that c o u l d b e obtained from canal remodelling a n d from SCARP tube
wells in fresh groundwater areas. SCARPSattempted to l o w e r groundwater levels through tubewell
pumping and, to a l i m i t e d extent, through tile drainage. Pumping from fresh water aquifers p r o v i d e d
a n additional source o f irrigation water a n d enabled leaching o f salts from saline soils. O v e r 12,000
p u b l i c tube wells were installed a n d the p r o g r a m was generally successful in c o n t r o l l i n g water logging
w h i l e supplementing irrigation supplies.

T h e S C A R P Program, however, h a d it own problems. I t s comprehensive approach to area

development a n d emphasis on construction through WAPDA, tended unintentionally to divert
attention away from water management, o n - f a r m development, a n d related issues. Financial a n d other
constraints slowed implementation, a n d establishment o f large p u b l i c sector tubewell fields placed a n
on-going financial b u r d e n on operating agencies (provincial I r r i g a t i o n Departments) that seriously
restricted funds avadable for n o r m a l maintenance o f t h e surface distribution a n d drainage system. In
addition, this p r o g r a m h a d technical a n d operational problems. T u b e w e l l life was less t h a n planned
(10-15 years instead o f the assumed 30-40 years) a n d because o f plugging o f screens a n d gravel packs,
t h e capacity o f most tubewells decreased about 5 percent annually. Water tables were l o w e r e d a n d
i r r i g a t i o n supplies supplemented, but efficient management o f p u b l i c tube wells p r o v e d elusive.

Furthermore, the addition o f Tarbela water, while significantly increasing dry season cropping, tended
to aggravate waterlogging problems in certain areas a n d brought into focus concerns about overall
efficiencies in t h e use o f irrigation supplies. These concerns were heightened further by the
demonstration u n d e r a U S A I D - f u n d e d research p r o j e c t that water losses in the system, especially at
the watercourse level, were s i p f i c a n t l y higher t h a n h a d b e e n previously assumed.

The RAP for Irrigated Agriculture (1979)

Increasingly during t h e 1970s, i t was recognized that a m o r e direct approach to t h e problems o f
management, maintenance, a n d efficiency in t h e operation o f Pakistans irrigation system was required,
a n d further, that such a n approach would need to b e m o r e closely attuned to the immediate constraints
on agricultural p r o d u c t i o n t h a n in the past. Low abiunu recoveries180, rising SCARP O&M costs,
i n f l a t i o n a n d pay c o m m i s s i o n awards resulted in m a j o r neglect o f t h e surface irrigation system.
D e f e r r e d maintenance began to accumulate a n d institutional weaknesses, manifested by poor quality o f
service delivery, also began to become apparent. By early 1980s, accumulated deferred maintenance o f
t h e irrigation system h a d reached unsustainable levels. To help evolve appropriate policies a n d

96
programs to implement such a new strategy to address emerging issues, a UNDP-financed and World
Bank-executed study was mounted to prepare a RAP for irrigated agriculture.

While recognizing that programs to increase availability of water and other inputs will continue to be
important, t h e RAP recommended in 1979 that greater priority be given to complementary measures
designed to ensure efficient water use, in particular through farm-level programs and mobilization o f
private initiative and capital. The RAP also recommendedbetter coordination between agriculture and
water policies, improvedwater management at the farm and command area levels, discontinuation o f
new public investments in fresh ground water areas and privatization of public tube wells, and system
rehabilitation. Recognition was given to the capacity of the farmer to respond to appropriate
incentives as well as to t h e need to generate additional resources in both the public and private sectors
to relieve acute resource constraints facing Pakistan.

Specifically, the RAP recommended: (a) investment policies that emphasized quick returns and that
complemented existing facilities rather than expansion o f irrigated area (rehabilitation, on-farm and
watercourse improvements, essential drainage, and agricultural support services); (b) management
policies that transferred relevant activities to the private sector (e.g., tubewell development in fresh
groundwater areas) and that strengthened GoP operating agencies; and (c) pricing policies that
recognized continuing resource constraints and t h e need to provide appropriate efficiency signals to
the private sector. The RAP recommendations in large measure were accepted by GoP and made part
o f the National Agricultural Policy in 1980.
BankAssistance: During the 197Os, Bank assistance was devoted to completing the Tarbela dam
including the remedial works that required special attention. In addition, t h e Bank approved three
drainage projects and a flood damage restoration project.
Table-3: Bank Assistance During 1971-1980

Amount Amount
Approval
Sr. # Financier Description us $ us $ Date
(Current) (2004/05)
1 IDA Flood Rehabilitation 35,000,000 787,500,000 12-Mar-74
project
2 IDA Khairpur-I1Irrigation & 14,000,000 182,000,000 24-Jun-76
Drainage Project
3 IDA Flood Damage 40,000,000 460,000,000 22-Feb-77
Restoration
4 IDA SCARP-VI 70,000,000 763,000,000 6-Dec-77
5 IDA Tarbela Dam 35,000,000 381,500,000 28-Feb-78
Supplement I1
6 IDA S C A R P Mardan 60,000,000 624,000,000 23-Jan-79
Total 254,000,000 3,198,000,000

During the 1980s, Bank assistance focused on implementing the recommendations o f the RAP. There
was a sharp increase in Bank assistance both in terms o f number o f operations and amounts
committed for the sector, involving twelve operations with a total commitment o f US$3.7 billion.
Besides one operation for improved maintenance facilities for Tarbela, Mangla and Chashma
Reservoirs, one flood damage restoration project, and one project for small irrigation schemes in
Balochistan, the Bank supported drainage, o n farm water management, system rehabilitation and
privatization o f SCARPSin fresh groundwater areas.

97
 Table-4: Bank Assistance Durina 1981-1990
I I
Amount
Amount Approval
Description us $ us $ Date
(Current) (2004/05)
1 IDA On-Farm Water Management 41,000,000 323,900,000 16-Jun-81
2 IDA Irrigation System Rehabilitation 40,000,000 316,000,000 4-May-82
3 IDA Balochistan Minor Irrigation & 14,000,000 110,600,000 11-May-82
Development.
4 IBRD Reservoir Maintenance Facilities 10,200,000 74,460,000 15-Mar-83
5 IDA Fourth Drainage Project 65,000,000 474,500,000 31-May-83
6 IDA Command Water Management 46,500,000 320,850,000 29-May-84
7 IDA L e f t Bank Outfall Drain - Stage I 150,000,000 1,005,000,000 13-Dec-84
8 IDA On Farm Water Management I1 34,500,000 231,150,000 6-Jun-85
9 IDA SCARP Transition Pilot 10,000,000 63,000,000 8-May-86
10 IDA Irrigation System Rehabilitation I1 79,500,000 405,450,000 29-Mar-88
11 IDA Private Tube well Development 34,400,000 184,000,000 11-Apr-89
12 IDA Flood Damage Restoration 40,000,000 158,240,000 11-Apr-89
Total 565,100,000 3,667,150,000

I n the drainage stlb-sector, three Bank assisted SCARPs (Mardan, Khairpur 11, Panjnad Abasia) started in
the early 1980s were completed. Further Bank assistance in drainage was focused on SGW areas and
included one project in Punjab (Fourth Drainage) and one in Sindh (the L e f t Bank Outfall Drain,
LBOD Stage-I). W h i l e the focus of all these projects was on providing drainage relief, they were
designed as integrated irrigation and drainage investments that sought productivity improvements in
reclaimed areas.
I n water management, t h e Bank supported two OFWM Projects and a Command Water Management
Project. These projects recognized the need for giving greater voice to farmers in decision making at
the watercourse level. Supportinglegislation in the form o f Water U s e r Association Acts was
promulgated in all provinces.
I n gstem rehabilitation, the Bank supported two successive nationwide projects to rehabilitate the
irrigation and drainage system. At the same time, O&M funding was substantially increased with the
help o f grants from GoP and periodic increases in abiana charges were covenanted with the provinces.
However, institutional and policy changes required to sustain O&M levels and improve 0&M planning
and effectiveness remained lacking.
The Bank also supported a program for SCARP Transition (disinvesting public tube wells in fresh
groundwater areas) on a pilot basis in Punjab to reduce the public sector O&M burden181. A project to
support private tubewell development in fresh groundwater areas, with shallow water tables, was
supported to avoid the need for further SCARPs in FGW areas.
In the 1980s, feasibility and detailed design studies for Kalabagh Dam, the storage project that was
envisaged to follow the construction of Tarbela Dam, were also started.

98
Assessment o f Bank assistance in the Post-RAP Period
W h i l e B a n k assistance during this p e r i o d closely f o l l o w e d the RAP recommendations focusing on
sustainability o f irrigated agriculture a n d improvingwater delivery efficiency in S G W areas, the
achievements w e r e mixed, as explained below.

T h e OFWM investments were the most successful in terms o f i n t e n d e d outcomes, i n c l u d i n g

substantial water savings, increases in c r o p p i n g intensities a n d f a r m incomes (see excerpts from
OED precis below). H o w e v e r , from a n institutional development v i e w point the achievements w e r e
modest. W U A s were generally non-sustainable m a i n l y because they did not have a c o n t i n u i n g
responsibility for O&M o f the system above the Mogha. T h e 3rd On F a r m W a t e r Management
( O F W p r o j e c t I m p l e m e n t a t i o n C o m p l e t i o n R e p o r t (ICR) observed that For long t e r m
sustainability o f the i r r i g a t i o n system, participation o f farmers in i r r i g a t i o n management i s necessary.
T h e i r p a r t i c i p a t i o n c o u l d b e enhanced i f the farmers organizations have a continuous crucial role in
O&M o f t h e system. T h e y should b e responsible for distribution o f water a n d collection o f revenue
resulting from water charges. I n Pakistans i r r i g a t i o n system, this c o u l d b e achieved by forming FOs at
t h e secondary canal level i.e. distributaries/minors.

The drainage investments i n SGW areas w h i l e solving local water logging problems, faced sustainability a n d
e n v i r o n m e n t a l issues:

Firstly, besides offfarm drainage these investments also supported investments for on-farm
drainage -primarily a private good-- without r e q u i r i n g beneficiary c o n t r i b u t i o n to capital
cost. T h i s gave the wrong signals to farmers t h a t such investments would continue to
b e supported by the p u b l i c sector. Furthermore, i t down played t h e i m p o r t a n c e o f
i m p r o v e d water management to reduce the drainable surplus caused largely by over-
irrigation.

Secondly, except for l i m i t e d investments in tile drainage, most subsurface drainage was
based on large capacity tube wells. This choice o f technology w h i l e reducing the i n i t i a l
capital cost, resulted in several problems: (i) farmers c o u l d not m a i n t a i n the large
capacity tubewells; (ii) deeper groundwater b e i n g invariably m o r e saline t h a n shallower
groundwater, environmentally safe disposal o f drainage effluent became a p r o b l e m ; (iii)
l o c a l drainage disposal solutions received inadequate attention182; (iv) t h e focus on
vertical drainage, discouraged the development o f l o c a l private industry for tile drainage
(PVC resin a n d pipes, a n d contractors specializing in laying h o r i z o n t a l p i p e drainage)
that has b e e n successfully developed on a large scale in other countries, e.g. Egypt.

Thirdly, t h e projects involving surface drainage (e.g. LBOD Stage-1 Project) w e r e not
designed to handle storm water flooding nor was a system o f flood management (flood
w a r n i n g or alarm system) m a d e a p a r t o f the design. This deficiency has emerged as a
m a j o r issue, particularly in the s o u t h e r n coastal district o f Sindh (e.g. Badin) w h e r e
r e c u r r i n g severe flooding has o c c u r r e d on several occasions.

Fourthly, most provinces defaulted on covenants r e q u i r i n g increases in water charges.

T h e resulting low recoveries were highly inadequate for O&M, a n d drainage
infrastructure remained the most poorly maintained p a r t o f the i r r i g a t i o n a n d drainage
system.

Privatixation 0fSCARPs i n Pzqab by replacing g o v e r n m e n t o w n e d a n d operated large tube wells with

c o m m u n i t y o w n e d a n d operated small capacity shallow t u b e wells was perhaps t h e most successful a n d
p a t h breaking i n v e s t m e n t s u p p o r t e d by t h e B a n k . Firstly, it greatly reduced t h e O&M b u r d e n o f t h e
g o v e r n m e n t thus substantially r e d u c i n g t h e O&M cost a n d recovery gap. Secondly, i t b r o k e the myth
t h a t water logging a n d soil salinity c a n n o t b e c o n t r o l l e d by p r i v a t e a n d c o m m u n i t y tubewells without

99
c o m p r o m i s i n g small farmers access to groundwater. Thirdly, it demonstrated that farmers c a n better
m e e t their i r r i g a t i o n needs if t h e y c o n t r o l the operation o f tubewells.

The investments in gutem rehabilitation no doubt h a d short t e r m benefits o f reducing incidence of canal
breaches a n d s o l v i n g siltation a n d erosion in "problem" channels. However, due to t h e lack o f
essential institutional changes a n d adequate O&M, the situation reverted to the pre-rehabilitation
situation within 3 to 5 years. T h e rehabilitation investments p r i m a r i l y aimed at restoring the system to
i t s original design without any element o f modernization to convert the system from a largely supply
d r i v e n run-of-the r i v e r system to a m o r e d e m a n d d r i v e n system183 i n t e n d e d for m o r e m o d e r n
agriculture. Additional c o n t r o l a n d flow measurement structures a n d a n O&M regime commensurate
with i t s requirements were not s u p p o r t e d as p a r t o f these investments. T h e latter would have
essentially required a m o r e fundamental institutional change with greater farmer participation a n d
incentives as i t s center piece.

OED Observations: In 1992, OED carried out a n ex-post evaluation o f two OFWM a n d two ISRP
projects. Excerpts from these evaluations are g i v e n below:

A s approved, the four projects supported some o f the most i m p o r t a n t priorities

established in the RAP. But as implemented, they strayed from t h e program's
agreed strategy:
-- T h e y failed to give highest priority to i m p r o v e m e n t s in saline groundwater
areas. In these areas-which have no supplementary w e l l water-the returns to
c o n t r o l l i n g water tables a n d supplying m o r e surface water are t h e highest.
-- T h e y came to b e d o m i n a t e d by quantitative targets for watercourse
improvement, regardless o f the l i k e l y effects on water supply, w a t e r logging, a n d
salinity.
T h e water ''saving"184 i m p a c t o f the 9,860 watercourses i m p r o v e d u n d e r three o f
the four projects, p l u s t h a t from canal lining u n d e r CWMP, totals a b o u t 2.0
.
d o n acre feet (MAF), or 2.3 bitlion cubic meters., Although this i s only a
little m o r e t h a n h a l f the savings anticipated u n d e r RAP, it i s nevertheless, m o r e
t h a n a n e w surface storage d a m a t Kalabagh would p r o v i d e (though t h a t would
have p o w e r benefits as well). This n e x t p r o p o s e d m a i n storage site would
p r o v i d e a n estimated 3.5 million acre feet at the mogha at a cost of US83.5 billion
(in a 1985 estimate).
Canal rehabilitation a n d lining work in practice i n c l u d e d s i p f i c a n t capacity expansion
contrary to the agreed program. This apparently occurred to allow t h e provinces to
absorb additional water b e c o m i n g available from Tarbela d a m a n d to establish rights to
that water before a f o r m a l allocation agreement took effect in 1991. I n areas t h a t c o u l d
not safely absorb m o r e water, t h e resulting increases in water loggmg a n d salinity have
caused serious h u m a n a n d e n v i r o n m e n t a l problems.
P r o g r a m designers h a d envisaged a f a r m credit approach, a r p n g t h a t farmers would find
i m p r o v e m e n t s in their watercourses profitable enough to repay loans. But, because o f
performance p r o b l e m s in the credit system, the i m p r o v e m e n t s relied heavily on
construction subsidies.
Vested interests a n d the perquisites o f p r o j e c t activities distorted t h e incentives to
participants, just as t h e efficient management o f the system as a w h o l e was u n d e r m i n e d by
political influence a n d r e n t seeking.
T h e bundling o f assistance for t h e four provinces together in these four projects m a y have
been administratively convenient, a n d clearly facilitates the Bank's wholesaling o f
development assistance, but i s l i k e l y to have reduced t h e overall i m p a c t o f t h e assistance.

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 R e c e n t projects have h a d some w o r t h w h i l e a n d widespread p o v e r t y alleviation impact, but
h a v e also p r o v i d e d at the same time, without any justification, large transfers o f p u b l i c
funds to m a n y o f the r u r a l elite. D i f f e r e n t i a t i o n would permit, a m o n g o t h e r things, a
m o r e efficient allocation o f scarce resources, taking relative needs into account.

The Post-Inter-Prowncial WaterAccord Period (1991-2005)

T h e b e g i n n i n g o f t h e 1990s was m a r k e d by the conclusion of a long overdue W a t e r A c c o r d for sharing
t h e Indus waters amongst t h e four provinces in 1991. A W a t e r Sector I n v e s t m e n t P l a n n i n g Study
(WSIPS) was also c o m p l e t e d in 1990 to update the RAP recommendations a n d prioritize investments.
T h e WSIPS emphasized the need for establishing a comprehensive a n d reliable D a t a B a n k N e t w o r k
for water resources, agriculture, soils, etc. to guide investment planning; revitalizing institutional
capacity in t h e provinces for investment planning; establishing a sector MIS; improving p r o j e c t
approval a n d r e v i e w processes; m o d e r n i z i n g p r o c u r e m e n t processes; strengthening the l o c a l
construction a n d consulting industries; a n d a training p r o g r a m for institutionalizing integrated
comprehensive management o f water resources.

H o w e v e r , by 1992 it h a d b e c o m e clear that the RAP approach was not resolving the overridtng
p r o b l e m s o f t h e i r r i g a t i o n system w h i c h remained in dire straits with p r o b l e m s similar to m a n y o t h e r
i r r i g a t i o n systems, i n c l u d i n g waterlogging a n d salinity, over-exploitation o f fresh groundwater, low
efficiency in delivery a n d use, inequitable distribution, unreliable delivery, a n d insufficient cost recovery
system. I t was realized that the RAP approach was not addressing the real u n d e r l y i n g causes o f the
p r o b l e m s Pakistan's i r r i g a t i o n system was facing but rather trying to deal with t h e symptoms. With
t h i s realization, t h e B a n k stopped n e w l e n d i n g in the sector185 till a far reaching n e w strategy to address
the real causes was agreed with t h e G o v e r n m e n t . I n 1994, t h e B a n k c o m p l e t e d a m a j o r sector study
that resulted in the r e p o r t entitled Pakistan-Irrigation and Drainage: h i e s and Options. T h e k e y findings
a n d recommendations o f t h i s r e p o r t were:

In Pakistan, as in m a n y o t h e r countries, g o v e r n m e n t treats i r r i g a t i o n water as a p u b l i c

good, whereas it i s a private tradable good, for w h i c h markets c a n operate. L a c k o f w e l l
d e f i n e d i n d i v i d u a l p r o p e r t y rights a n d t h e illegality o f sales o f surface water severely
constrain informali r r i g a t i o n water markets. I n s t e a d o f rooting out t h e barriers to water
markets, G o v e r n m e n t p u b l i c l y administers i r r i g a t i o n water. I n e f f i c i e n t p r i c i n g o f water,
resource misallocation, r e n t seeking behavior, a n d "illegal" trading i s t h e result.

T h e G o v e r n m e n t h a d not even adequately m e t t h e requirements o f a n administered

system. I t h a d failed to m a k e budgetary provisions for operations. Moreover, the p u b l i c
body responsible for i r r i g a t i o n maintenance was separate from (and h a d poor
c o o r d i n a t i o n with) t h e agency responsible for revenue collection. In the past,
administrative discipline was adequate but it h a d gradually b r o k e n down a n d the cost o f
i r r i g a t i o n maintenance h a d vastly increased. Nor were there any measures available to
restore discipline.

E c o n o m i c efficiency in i r r i g a t i o n delivery a n d use c a n n o t b e achieved, because o f lack o f

the right incentives.

U n l i k e o n - f a r m drainage, o f f - f a r m drainage is a p u b l i c good. Thus, o f f - f a r m drainage will

have to b e supplied by the G o v e r n m e n t . H o w e v e r , t h e u n d e r l y i n g p r o b l e m o f
inappropriate institutional f r a m e w o r k will require r e f o r m s t h a t will ensure autonomy,
transparency, a n d accountability o f present i n s t i t u t i o n a l set-up for drainage.

Any water service t h a t i s not a p u b l i c good should b e commercialized a n d later privatized.

Only with market-determined incentives for i r r i g a t i o n a n d o n - f a r m drainage i s a sustained
i m p r o v e m e n t in p e r f o r m a n c e possible. T h e g o v e r n m e n t needs to r e m o v e barriers to a
free m a r k e t in water. Most important, t h e g o v e r n m e n t will have to d r a w up enforceable

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 property rights to water, without w h i c h any attempt to legalize and commercialize water
markets would b e futile. Property rights and legalized markets will make the opportunity
cost o f water transparent, leading to greater efficiency in use.

T h e long-term option for the government will b e to define individualwater property

rights, w h i c h are necessary to ensure equity in distribution. This would address the
problems o f tail-enders (that is, those at the td e n d o f the system who receive little or no
water), w h i l e relieving pressure on ground water resources.

As a first step toward individualwater rights, Pakistan m a y like to aim for c o m m u n a l

rights, w h i c h are legally and administratively easier to establish. User organizations c a n
t h e n translate these c o m m u n a l rights into enforceable individual rights o f their members.

T h e N a t i o n a l Drainage Program (NDP) Experience

W h i l e endorsing, in principle, the main elements o f the above strategy, in 1995/96 GoP proposed its
own m o d e l for implementing the reforms that envisaged replacing the provincial irrigation
departments (PIDs) with a three-tier institutional setup comprising autonomous I r r i g a t i o n and
Drainage Authorities at the provincial levels, A r e a Water Boards (AWB) at the m a i n canal level a n d
Farmer Organizations (FOs) at the distributary canal levels. PIDAs were to b e established in all
provinces w h i l e o n e pilot A W B s was to b e established in each province with FOs at the distributary
canal level. Supporting legislations in the form of PIDA Ordinances were passed a n d later endorsed
by the Provincial governments as PIDA Acts. T h e emphasis was on organizations, not incentives a n d
instruments, however. Water rights a n d entitlements that were advocated in the Banks strategy paper
were not on the immediate agenda. T h e B a n k accepted the proposed m o d e l as a starting point for
i m p l e m e n t i n g the reforms as the center piece o f the, misleadingly-named, NDP project assuming that a
detailed strategy for implementing the r e f o r m m o d e l a n d dealing with difficult political and economic
issues would b e developed during the course o f project implementation.

W h i l e a d e t d e d evaluation o f the NDP implementation experience i s beyond the scope o f this paper,
suffice i t to say that relative to i t s stated objectives a n d p r o g r a m targets, the implementation
performance of NDP remained m o r e or less unsatisfactory throughout a n d its outcomes have b e e n
modest. T h e m a i n reasons for this unsatisfactory performance included, inter alia:

O v e r l y complex a n d ambitious project design that failed to address the realities o f

political economy embedded in the profound changes the reforms sought186;
L a c k o f ownership, particularly by the PIDs who saw the reforms as a threat to their
existence a n d monopoly on water distribution, a n d offered immense resistance a n d
inertia to the changes the reforms sought to bring*;
L a c k o f champions both at the working level a n d at the political levels (except in Sindh,
a n d very recently in Punjab following changes in leadership);
Focus on organizations not on instruments a n d incentives;
L a c k o f attention to sequencing, prioritization a n d the rules for reformers.
L a c k o f a detailed strategy for i m p l e m e n t i n g the key elements o f the reforms; the PIDA
A c t s envisaged a stroke o f the pen conversion of PIDs into PIDAs but lacked
i m p o r t a n t details188 for i m p l e m e n t i n g the r e f o r m strategy. Furthermore, the A c t s did
not address the fundamental issues o f legalizing water markets, or clarifying c o m m u n a l
a n d individual water rights.
T h e Banks underlying assumption that transition plans, severance packages a n d change
management arrangements would b e defined a n d developed during implementation did
not materialize due to constant distraction by o t h e r implementation issues a n d battles o f
turf a n d jurisdiction a m o n g the various participating agencies. Similarly, the
expectations that m o r e transparent volumetric measurements, bulk water sales a n d
water charges based on v o l u m e would b e introduced during implementation also did

102
 not materialize as they received far lower priority than the easier to implement
rehabilitation works.
From 1999 onwards, the prevailing drought and resulting water shortages dominated
the water sector debate in Pakistan and the issues surrounding n e w storage proposals
distracted Government's attention away from drainage and institutional r e f o r m issues.
I n retrospect, a drainage project covering all the provinces and envisaging a major civil works
component was not the right vehicle for implementing reforms that sought to focus on improving
irrigation service delivery through participatory management, a system o f property rights a n d
incentives. A m o r e focused irrigation project would probably have been a m o r e appropriate vehicle.
N o t w i t h s t a n d m g this overall unsatisfactory rating, the NDP did yield several positive outcomes. First,
it helped to clear the backlog o f deferred maintenance o f the existing system (some parts o f the
irrigation and drainage system h a d virtually no maintenance for several years). Second, although the
institutional reforms component h a d a m i x e d performance, the need for the reforms has been
endorsed at the highest levels o f the GoP and Provinces, and Sindh made commendable progress.
Third, it was instrumental in the completion o f key policy and sector studies that have paved the way
for introduction o f a N a t i o n a l Water Policy and a drainage sector strategy for the country. Fourth, the
project i m p r o v e d the knowledge base by providing funding for institutions a n d individual researchers
and contributing international experience through study tours and use o f international panels of
experts. Fifth, the project p r o m o t e d farmer participation in the operation and maintenance o f the
irrigation system. Finally, the project provided a forum for the discussion o f long t e r m options for the
sustainable development of the Indus River Basin, and as a consequence, has raised awareness o f the
importance o f sound environmental planning and management.
Other Bank Assistance during the 1990s
Besides supporting the NDP project, B a n k assistance included the projects listed below. Besides
supporting a third OFWM project, o f particular significance was the support for the Second S C A R P
Transition and the Punjab Private Sector Groundwater Development Projects189 that completed the
privatization o f the remaining 6,000 SCARP tube wells in FGW areas o f Punjab, providing substantial
relief to its 0&M burden. O t h e r projects were: the F o r d w a h Eastern Sadiqia Irrigation and Drainage
Project that successfully established the f i r s t pilot FOs in Punjab, who were handed over irrigation
0&M and revenue collection responsibility in the Bahawalnagar area o f Punjab; a Flood Damage
Restoration Project; and a Community Irrigation Project in Balochistan. Although the preparation o f
feasibility and detailed design (including bid documents) for the Kalabagh D a m were substantially
completed, implementation was not started because o f environmental and political controversies.
Table-5: Bank Assistance During 1991-2000
I I
Amount
Amount Approval
Sr. # Financier Description us $ us $ Date
(Current) (2004/05)
1 IBRD O n - F a r m Water Management I11 36,300,000 137,940,000 21-May-
91
2 IDA O n - F a r m Water Management I11 47,300,000 179,740,000 21-May-
91
..
3 IDA S C A R P Transition I1 20,000,000 76,000,000 4-Jun-91
4 IDA F o r d w a h Eastern Sadiqia Irrigation & 54,200,000 162,600,000 2-Ju1-92
Drainage
5 IDA 1992 Flood Damage Restoration 100,000,000 300,000,000 4-Mar-93
6 IDA Balochistan Community Irrigation 26,700,000 61,410,000 26-Sep-95

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I 7 IDA Punjab Private Sector Groundwater 56,000,000 112,000,000 11-Jul-96 I

Bank Assistance After 2000 and Post-NDP

Following the m i x e d experience a n d outcomes o f NDP, the B a n k adopted a n i n t e r i m strategy till a
n e w CWRAS i s agreed with the government. This i n t e r i m strategy has identified areas for partnership
a n d mutually agreed with GoP a n d Provinces on the need to complement the r e f o r m agenda with
investments in infrastructure. I t distinguishes two possible scenarios: the f i r s t o n e f o r m e d by
interventions that c o u l d stand on their own merits a n d that c o u l d reap significant benefits for
p r o d u c t i v i t y enhancement, i n c o m e generation, capacity building at t h e f a r m level, a n d to guarantee t h e
safety o f existing infrastructure (barrages); the second o n e (high case scenario) would seek progress
in t h e articulation o f the r e f o r m instruments (enforceable water entitlements a n d water rights,
participation o f stakeholders, transfer o f responsibility over asset management, accountable
institutions, water p r i c i n g a n d cost recovery policies, a n d environmental flows) so as to justify m a j o r
interventions in storage, i r r i g a t i o n infrastructure, and long t e r m solutions to inter-provincial drainage
problems. With respect to irrigation, the overall strategy will b e to un-bundle at t h e provincial level the
support initially p r o v i d e d u n d e r NDP, a n d support the provinces t h a t have demonstrated initial results
and commitment.

In l i n e with this i n t e r i m strategy, the B a n k approved O n - F a r m W a t e r Management Projects for NWFP

a n d Sindh that p r o v i d e support for physical improvements at the on-farm90, watercourse, distributary
a n d b r a n c h canal levels as w e l l as for the reforms initiated u n d e r t h e NDP project. In addition, t h e
B a n k reallocated funds from t h e NDP Credit for Drought Emergency Rehabilitation a n d m o r e
recently approved a project for t h e rehabilitation o f the Taunsa Barrage on a n emergency basis.

Recent Sector Work

In 2003, as p a r t o f t h e Public Expenditure Review (PER), t h e B a n k carried out a systematic review o f
public spending in t h e water sector a n d highlighted a series o f strategic issues to b e addressed by the
G o v e r n m e n t a n d the Pakistan society. T h e review culminated in t h e Public E x p e n d i t u r e Management
Vol 11, entitled Pakistan: Accelerated Development of Water Resoztrces and Imgated Agnmltztre, September 2003.
T h e main findings a n d recommendations o f this review were:

Pakistan has b e e n living off the great expansion in irrigated agriculture since the late
1970s w h e n t h e last m a j o r storage reservoir was completed. With t h e exception o f two
m a j o r drains to serve irrigated areas on t h e l e f t a n d right banks o f the l o w e r Indus
River, investment has been l i m i t e d since that t i m e m a i n l y to ad hoc rehabilitation o f
canals a n d drains a n d salinity c o n t r o l tubewells.

T h e r e i s little doubt that water sector investment m u s t increase substantially to meet

urgent needs for modernization o f t h e distribution system, groundwater management,
c o n t r o l l i n g soil a n d water salinity, as w e l l as improving governance a n d the
accountability o f the institutions responsible for i r r i g a t i o n water service. However,
investment in infrastructure alone will not m e e t t h e challenges - k e y p o l i c y changes and
institutional a n d governance r e f o r m s are at least as i m p o r t a n t .

T h e m a j o r strategic issues facing Pakistan in t h e I n d u s Basin, i n c l u d e soil a n d water

salinity; environmental degradation o f t h e l o w e r r i v e r a n d estuary; inter-provincial
c o n f l i c t over water allocation a n d management; vulnerability to drought and supply
reliability; a n d pervasive inequity, inefficiency a n d low productivity.

104
 A supply side approach has long b e e n the staple water policy in Pakistan, a n d as one
might expect, n e w water supply (dams) a n d n e w canals dominate t h e current proposals
for investment in the sector. But looking to t h e future, the c o m b i n a t i o n of high
p o p u l a t i o n growth, persistent poverty, lagging growth in rural areas, a n d t h e looming
constraints on water resources sugests that water resources development and management in the next
40years will be and must be Ly design substantia& diferent than the past 40years. A genuine
paradigm shift i s needed in the water sector in w h i c h water i s managed from the
mountain tops to the root zone o f the Indus Basin.

T h e strategy going f o r w a r d must:

- M o d e r n i z e both t h e water infrastructure a n d t h e institutional a n d governance
arrangements for water management, a n d i m p r o v e strategic p l a n n i n g a n d t h e
knowledge base that supports planning, p o l i c y analysis a n d investment (R&D,
i n f o r m a t i o n systems)
- Balance short-term a n d long-terms benefits, by m a k i n g investments in both water
infrastructure a n d water management, a n d in both supply a n d demand
management
- Better integrate irrigation, h y d r o p o w e r a n d agricultural development investment
programs a n d policy;
- Reflect a m o r e rigorous economic, social a n d environmental analysis to ensure
that project priorities a n d plans make t h e best use o f the l i m i t e d resource a n d
fiscal space;
- B e supported by a n e w consensus on water management a n d development t h a t
avoids t h e costly political conflicts of the past;
- Choose judiciously a m o n g investments in supply expansion, system expansion,
management, environmental sustainability, productivity a n d governance, a n d t h e n
sequencing these over t i m e to achieve a timely a n d sustainable development
p r o g r a m with real a n d substantial economic a n d social benefits.

Hydropower

As shown in Figure 82, the B a n k has h a d a n episodlc engagement with h y d r o p o w e r in Pakistan.

H y d r o p o w e r was a m a j o r element o f t h e Bank-funded Tarbela D a m (discussed in the earlier section),
with 60% of all benefits from Tarbela b e i n g due to hydropower, a n d with the value o f h y d r o p o w e r
benefits ex post substantially higher t h a n expected at appraisal.

M o r e recently, the B a n k made a

l o a n of $350 in 1996 for the
successful $2,000 million G h a z i --t Before: Mean income = 45,000 rupees
B a r o t h a h y d r o p o w e r project191.
T h e project was completed on
t i m e a n d on budget. I t produces
electricity o f high value (since .E 40
peaking p o w e r i s particularly 5
5 20
short) at a very low cost o f 1.7
US cents p e r kwh (compared to
<5 5-10 1 0 - 1 5 15-20 20-25 25-50 >50
a n average generation cost in
Thousand rupees per year
Pakistan o f 6.0 cents p e r kwh).
T h e rate o f r e t u r n o f t h e project
was very high at appraisal a n d Figure 82: Household income of families a t Ghazi Barotha
Hydropower Project before and after resettlement
SOYICC: World Bonk ZW4

105
even higher e x post -- the e c o n o m i c rate of r e t u r n was 22.5% (versus 20% at appraisal) a n d t h e
financial rate o f r e t u r n o f 15.1% (versus 13.8% at appraisal).92 In a d d i t i o n to i t s large direct
c o n t r i b u t i o n to the Pakistani economy, G h a z i m e a n t that the B a n k was i n v o l v e d in a p o w e r sector
r e f o r m p r o g r a m in w h i c h WAPDA was to b e u n b u n d l e d into independent generation, transmission
a n d d i s t r i b u t i o n companies (a process not yet complete). Finally, G h a z i dealt v e r y successfully with
c o m p l e x resettlement issues, w h i c h i n c l u d e d legacies from Tarbela. Figure 82 shows that those who
were resettled were m u c h better o f after t h a n before the project, with average h o u s e h o l d i n c o m e
increased by a b o u t 20%.

Water Supply and Sanitationlg3

W a t e r supply a n d sanitation (WSS) has b e e n a n integral p a r t o f the social sector investment portfolio
o f the World Bank. Starting modestly in 196Os, the Banks overall WSS portfolio g r e w to 9% o f t o t a l
c o m m i t m e n t s in 1979. Subsequently, dedicated l e n d i n g decreased to about 3% excluding WSS
components o f non-dedicated l e n d i n g categories. Currently the bank, world-wide, has 100 dedicated
WSS projects a n d another 150 non-dedicated projects with significant WSS components. Lately,
interest in t h e sector has grown because three targets u n d e r MDGs depend on improving the coverage
a n d quality o f WSS service delivery.

World Banks involvement, as w e l l as i t s experience, in the WSS in Pakistan, has b e e n m o d e s t even

c o m p a r e d with i t s overall w o r l d - w i d e engagement in t h e sector. Starting in late 1960s, the B a n k has
financed just five dedicated WSS projects until 1999, five years ago focusing p r i m a r i l y on water supply
rather t h a n sanitation. T h e B a n k has not financed any m a j o r sanitation p r o j e c t a l t h o u g h there are n e w
projects like the Punjab M u n i c i p a l Service I m p r o v e m e n t Project b e i n g appraised with possible B a n k
i n v o l v e m e n t in future.

Of t h e five B a n k supported projects, just o n e p r o j e c t covered r u r a l WSS. Four projects were in the
two largest cities o f K a r a c h i a n d Lahore. T h e results have b e e n m i x e d at best, because, according to
OED reports:
Legal frameworks a n d regulatory mechanisms were absent a n d h i n d e r e d achievement o f
ambitious p r o j e c t objectives.
T h e functions o f service provision a n d regulation w e r e not separated.
Strategies were needed to m i n i m i z e political interference in operational a n d p o l i c y
matters (especially employment).
Capital cost contributions a n d cost recovery needed to b e i m p r o v e d w h i l e p r o t e c t i n g
the interest o f the p o o r e s t o f the poor. T h e r e were opportunities for m a r k e t
segmentation a n d differential p r i c i n g that c o u l d b e exploited.
T h e sanitation aspect in most o f the projects was not addressed.

T h e following i s a summary o f t h e B a n k supported WSS projects based on various B a n k documents.

Lahore Water Supply Sewerage and Drainage Project (1967-72)

T h e m a i n objectives o f this relatively small U r b a n W a t e r Supply Project w e r e to rehabilitate a n d
expand water supply, sewerage a n d drainage facilities at L a h o r e a n d to h e l p establish a n institutional
capability to efficiently operate existing facilities a n d to develop capacity for long range p r o g r a m
expansion. A c c o r d i n g to a n OED report, r e v i s i o n o f t h e scope a n d design m a d e evaluation a n d
comparison with original appraisal difficult. D e s p i t e difficulties t h e long-run development objectives
o f water, sewerage a n d drainage w e r e achieved.
Second Lahore Water Supply Sewerage and Drainage Project (1976)

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P r o j e c t objectives w e r e to (a) continue with the i m p r o v e m e n t a n d extension o f Lahores water supply,
sewerage a n d drainage system; (b) develop a n efficient public utility organization w h i c h would b e
c o m p e t e n t to c o n t i n u e the i m p l e m e n t a t i o n o f a p r o p o s e d t e n year investment plan; a n d (c) develop a n
u r b a n p r o j e c t w h i c h I A subsequently helped to finance. A c c o r d i n g to OED, the p r o j e c t was
successful: t h e m a i n p r o j e c t objectives were m e t a n d the physical components implemented. T a r i f f
adjustments h e l p e d WASA to m a k e good progress t o w a r d m e e t i n g revised financial covenants.
Project illustrated t h e n e e d to allow for sufficient t i m e in p r o j e c t i m p l e m e n t a t i o n schedules for
institution buildng a n d h u m a n resource development. Great emphasis on dealing with physical
i m p l e m e n t a t i o n p r o b l e m s was at the expense o f operational aspects. OED n o t e d t h a t L a h o r e i s
fortunate to h a v e a 24 hour water supply a n d a comprehensive sewerage system. T h e service needs
c o n t i n u e to grow as t h e c i t y expands w h i l e requests for increase in t a r i f f level are m e t reluctantly. T h e
situation o f Lahore, located on a sweet water aquifer a n d in close proximity to r i v e r R a v i with potential
recharge, i s u n i q u e a n d duplicating this m o d e l m a y b e a challenge else w h e r e in the country.

Karachi Water Supply and Sanitation Projects (1983-1991)

Objectives w e r e to (a) increase Karachis water supply by 60 MGD (b) i n t r o d u c e system a n d
h o u s e h o l d metering; a n d (c) strengthen the K a r a c h i W a t e r a n d Sewerage B r o a d (KWSB) through TA
a n d Training. T h e p r o j e c t helped increase supply between 60-70 MGD. However, success in
c o n t r o l l i n g leakages was limited. Through installation o f meters a n d repairs there was a n i m p r o v e m e n t
in revenue recoveries from bulk users but i t h a d less effect on revenue from domestic consumers.
Project increased long t e r m quality a n d reliability of bulk supply to Karachi. H o w e v e r , KWSB s t i l l did
not achieve financial sustainability a n d required subsidy. T h e p r o j e c t h e l p e d strengthen KWSB
capacities to manage a n d execute large projects. T h e June 2000 OED observations on the p r o j e c t
stressed the n e e d for a n adequate regulatory f r a m e w o r k t h a t p r o v i d e d sufficient management
a u t o n o m y a n d a p a t h for r e f o r m that guarantees sustainability, limitations o f financial covenants a n d
conditionality, a n d t h e n e e d to incorporate in project design valuable local experiences, particularly
w h e n they specifically address p o v e r t y alleviation. Overall, OED evaluated t h e p r o j e c t outcomes to b e
unsatisfactory with unlikely sustainability.

Second Karachi Water and Sanitation Project

T h e m a i n objectives of this follow up p r o j e c t were to (1) increase potable water supply a n d reduce
water losses (2) i m p r o v e t h e financial viability o f the K a r a c h i w a t e r a n d Sewerage B o a r d (KWSB)
through increased revenues, cost r e d u c t i o n a n d increased operational efficiency; (3) i m p r o v e the
organization a n d management o f KWSB; (4) i m p r o v e sanitation in the City o f Karachi, i n c l u d i n g i t s
l o w - i n c o m e a n d coastal area by increasing sewerage coverage a n d sewage treatment capacity.

An OED evaluation states t h a t n o n e o f t h e four objectives w e r e fully achieved (1) t h e water supply
was increased but no r e d u c t i o n in losses is d o c u m e n t e d (2) T h e financial viability o f the KWSB hardly
i m p r o v e d ; i t survived due to g o v e r n m e n t subsidies throughout t h e 1990s. T h e operational efficiency
a n d the i n t e n d e d r e d u c t i o n in water losses o f K W S B were impossible to gauge since i t chose not to
meter domestic c o n s u m p t i o n . K W S B s organization a n d management did not i m p r o v e even after
reducing staff from 14,000 to 8,500 a n d some l i m i t e d administrative i m p r o v e m e n t s . T h e water supply
quantity a n d quality are p r o b a b l y w o r s e after c o m p l e t i o n o f t h e p r o j e c t because o f a r a p i d p o p u l a t i o n
growth in K a r a c h i a n d especially a m o n g t h e l o w - i n c o m e population. A significant s h o r t c o m i n g was
the legal a n d regulatory framework. An e f f o r t was belatedly m a d e at the behest o f t h e B a n k to i n v o l v e
a private operator but in t h e e n d these efforts came to nothing.

A c c o r d i n g to OED, t h e m a i n lessons learned were t h a t without a fundamental legislative a n d

regulatory reform, i n c l u d i n g changed incentives a n d c o n t r a c t i n g o f a private operator, the p r o j e c t was
d o o m e d from t h e start; financial covenants were ineffective if KWSB lacked t h e authority a n d means
to c o m p l y with them; excessive politicization o f t h e t a r i f f setting a n d o f t h e management added to the
difficulties; a n d t h e p r o j e c t design should have i n c o r p o r a t e d m o r e o f c o m m u n i t y participation

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especially u n d e r the sanitation component where Karachi h a d gained valuable experience from the
w e l l - k n o w n O r a n g i Pilot Project.

Rural Water Supply and Sanitation (1992-95)

This project covered all four provinces as w e l l as AJK. As p e r OED, it i s difficult to measure the
achievement o f general project objective o f improving rural productivity and health particularly of
w o m e n a n d children and reduce poverty and deprivation in rural A z a d J a m m u and K a s h m i r (AJK),
Balochistan a n d Sindh, since the project failed to develop monitoring and impact indicators. T h e r e
was success in implementing the hardware components, while the software components were scaled
back considerably. In the three provinces, only between half and two thirds o f the institutional
development assistance funds were actually spent.

T h e project was first I D A financed rural water supply project in Pakistan with a demand-driven
approach incorporating significant c o m m u n i t y involvement-and with contributions from
beneficiaries t o w a r d the capital investments. T h e n e w methodology required a change o f mind-set o f
public schemes that h a d p r o v e d unsustainable. Indications are that roughly 95% o f the water schemes
built under the project are s t i l l operating three years after completion. In terms o f shortcomings --- the
p r o g r a m to expand sanitary excreta disposal programs did not meet the expected acceptance and fell
far short of planned achievements.

OED in i t s review o f the project n o t e d the following lessons learned from t h i s experience:
0 A demand-driven rural water supply and sanitation strategy based on strong c o m m u n i t y
participation requires a longer time to take root t h a n w h a t i s usually offered by one single
project. T h e AJK component p e r f o r m e d better t h a n the Balochistan and Sindh components
precisely because i t enjoyed a centurys old tradition o f c o m m u n i t y participation whereas the
other two did not.
Changing the habits o f excreta disposal implies a m u c h greater e f f o r t t h a n providing water
supply. Symptomatically, the water supply investments p e r f o r m e d m u c h better than the
latrine components.
Project objectives should b e stated in terms that would allow quantitative monitoring o f
progress towards reaching them.

The Banks new Water Strategy

I n parallel with these reviews o f World B a n k engagement in water in Pakistan, and influenced by them,
the World B a n k developed a n e w Water Strategy, w h i c h was approved by the B o a r d o f the B a n k in
2003, and set a n e w direction for B a n k engagement in water throughout the world. T h e m a i n
messages o f the 2003 Water Strategy are:
Water resources management and development i s central to sustainable growth and poverty
reduction and therefore o f central importance to the mission o f the World Bank.
Most developing countries need to b e active both in management and development o f water
resources infrastructure.
T h e main management challenge i s not a vision o f integrated water resources management but a
pragmatic but principled approach that respects principles o f efficiency, equity and sustainability,
but recognizes that water resources management i s intensely political, and that r e f o r m requires the
articulation o f prioritized, sequenced, practical a n d patient interventions.
T h e World B a n k needs to assist countries in developing a n d maintaining appropriate stocks o f
well-performing hydraulic infrastructure a n d in m o b i l i z i n g p u b l i c and private financing, w h i l e
meeting environmental and social standards.

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 T h e World B a n k will re-engage with high-reward/high-risk hydraulic infrastructure, using a m o r e
effective business model.
T h e Banks water assistance must b e tailored to country circumstances a n d b e consistent with the
overarching Country Assistance Strategies.

Subsequently the B o a r d d r e w on the m a i n messages - o f m o r e aggressive B a n k engagement in

infrastructure - in setting the parameters for a n Infrastructure A c t i o n Plan. And recently, the m a j o r
OED annual review, the Annual Review o f Project Effectiveness, carries the same message, saying that
The World B a n k should focus on promoting economic growth rather than social policies as the route
.
to reducing poverty.. and calling o n the B a n k to refocus i t s efforts on infrastructure projects and
u r b a n and rural development194.

An indicative World Bank er investment program for 2006-2010:

The four pillars:

An i m p o r t a n t objective o f t h i s R e p o r t i s to b e an input into defining the water elements o f the

framework (known as the Country Assistance Strategy) w h i c h will govern the relationships between
the World B a n k and Pakistan for the p e r i o d 2006-2010. T h e program described here i s almost but
not quite final. Almost: because there have been extensive discussions between the B a n k and the
Federal and Provincial governments of Pakistan over water-related priorities over the past eighteen
months, T h e indicative p r o g r a m described here i s a p r o d u c t o f those discussions a n d thus one on
w h i c h there i s close agreement between the government and the Bank. Second, not quite: the details
of the Government of Pakistan-World B a n k contract on water for the next four years will only b e
finalized, necessarily and appropriately, over the next several months as B a n k management a n d the
M i n i s t r y o f Finance finalize t h e overall CAS.

Since 1980, investments in the

irrigated agriculture sector
(water and agriculture) have
been declining, both as a
percentage o f the total public
spending and as a percentage
o f GDP. In 2003, the total
allocation for agriculture a n d
water represented only about

0
0.5% o f GDP. T h e Federal
Social
and Provincial governments
and the management o f the
World B a n k all agree that water
management i s one o f the 0

central development challenges

facing Pakistan and that
investments in the sector must
b e increased substantially. T h e
Federal G o v e r n m e n t i s already
demonstrating i t s c o m m i t m e n t
Priority that should be given by the Bank
Figure 83: The global poll results f o r South Asia
Source: World Bank 2003

in this regard.
T h e allocation
for water in the Public Sector D e v e l o p m e n t P r o g r a m (Federal D e v e l o p m e n t Budget) j u m p e d from Rs

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20 billion in FY05 to over Rs 35 billion in FY06 representing a 75 percent increase. This i s in b r o a d
agreement with t h e findings o f a m a j o r poll o f a w i d e variety o f South A s i a n stakeholders (Figure 83),
w h i c h concluded that infrastructure, education a n d governance were the three areas w h i c h were both
o f high national importance a n d where the B a n k was perceived to have a comparative advantage.

T h e r e i s also a general agreement that water sector i s a n area where the B a n k has a long history a n d a
strong comparative advantage. T h e r e is, therefore, a general agreement t h a t there will b e a m a j o r
increase in B a n k l e n d i n g for water-related activities, with the indicative overall figures shown in Figure
84. This would m e a n that water-related lending for Pakistan would increase about 10 fold from t h e
2000-2004 period, a n d account for over $1 billion in the c o m i n g four years.

0 Major Infrastructure 0 lrngabonand Drainage 0 Floods

0 Uban WS&S 0 Rural W S I S Hydro
700 +%all Banklending

Figure 84: World Bank Lending t o Pakistan for Water-related

Sectors - Past and Prospective

Source: World Bank data

G i v e n the diverse set o f challenges facing the sector a n d t h e large need for resources, B a n k support
would need to b e selective, keeping in v i e w the Banks comparative advantage, o t h e r donors
traditional areas o f support, a n d t h e priorities identified in t h i s Report. World B a n k support would
focus on instruments a n d incentives for r e f o r m s rather t h a n simply on organizations, programs and
projects, I t would b e based on principled pragmatism recognizing that r e f o r m s a n d investments
must proceed in parallel a n d the best should not b e allowed to b e c o m e t h e enemy o f t h e good.
Broadly speaking, B a n k assistance would support four pillars o f t h e water sector, as described below:

Pillar 1: Asset Development and Management:

Pakistan has a large e n d o w m e n t (with a n estimated replacement value o f USJ60 to 70 billion) o f water
resources infrastructure, most o w n e d a n d managed by the provinces, a n d m u c h now quite old. As
described in this Report, t h e c o n d i t i o n o f this stock o f infrastructure i s a m a j o r cause o f concern. In
some instances - such as Taunsa a n d Sukkur barrages - t h e precarious state o f m a j o r structures puts
the well-being o f tens o f m i l l i o n s o f people at risk. I n o t h e r instances, t h e effect i s m o r e insidious,

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with the poor c o n d i t i o n o f canals and pipes a n d treatment plants meaning that infrastructure does not
p r o d u c e the services it should, and people have to adapt to unreliable and sub-standard services.

For these reasons a m a j o r focus of B a n k engagement over the n e x t four years will b e to simultaneously
finance m u c h needed investments in rehabilitation o f some critical assets (including barrages) a n d to
work with Federal a n d Provincial authorities to develop a m o r e appropriate culture a n d practice o f
asset rehabilitation a n d management. This will included a n emphasis on development o f Asset
Management Plans, w h i c h will include a n inventory o f existing assets, a n evaluation o f their c o n d i t i o n
a n d the requirements for one-time a n d regular rehabilitation, and for maintenance. Out o f this
assessment will emerge a set o f short- a n d medium-term priorities for asset rehabilitation a n d
maintenance. T h e Asset Management Plans will make explicit the requirements (and trade-offs) for
p u b l i c a n d user financing, a n d the importance for developing efficient institutional arrangements for
rehabilitating a n d maintaining h s infrastructure,

As i s evident throughout this Report, most o f the water in Pakistan i s already allocated. T h e i m p l i c i t
v i e w o f the Bank, accordingly, i s that attention should b e focused on sustaining the infrastructure that
has been b d t , a n d i m p r o v i n g the productivity o f water. A vital part o f B a n k activity in the past has
been on drainage. T h e B a n k will continue to invest, as part o f provincial investment programs, in
drainage a n d salt management investments, a n d will continue to contribute to the evolution o f national
a n d provincial drainage a n d salt management strategies.

O n e m a j o r issue that i s likely to emerge in the next CAS p e r i o d i s possible B a n k engagement in

developing a n d co-financing m a j o r n e w Indus Basin storage a n d hydropower, if a n d w h e n the
G o v e r n m e n t makes such a decision. As is discussed in detail in this Report, this i s a highly-
controversial issue in Pakistan, in p a r t because o f reasonable concerns about the cost and i m p a c t o f a
n e w d a m a n d the distribution o f costs a n d benefits, in part because o f dissatisfactions with the lack o f
transparency with implementation of the Water Accord, a n d in p a r t because this acts as a surrogate for
a series o f weakly-related historic a n d contemporary political grievances. O v e r the past decade, the
B a n k has tended to shy away from engagement with such controversial issues because o f reputational
risks to the B a n k (with B a n k investments in hydropower, for example, falling by about 90% over the
course o f the last decade). M o r e recently, the B o a r d of the B a n k has debated these questions at length
(includmg in course of discussions on both the Water Strategy a n d the Infrastructure A c t i o n Plan).
T h e Banks borrowers have all said that the Bank i s needed precisely where issues are complex a n d
difficult. T h e b r o a d conclusion i s that the B a n k m u s t re-engage with such high-risk/high-reward
investments w h e n there is a sound case for doing t h i s a n d w h e n the B a n k has a strong comparative
advantage. I n the case o f possible storage on the Indus, then, the B a n k understands fully a n d exactly
how controversial this issue i s . But the B a n k also believes that n e w storage is o f overwhelming
national importance to Pakistan, a n d that delay makes things m o r e dlfficult not easier. Accordingly, in
discussions with the G o v e r n m e n t it has been agreed that B a n k c o u l d b e i n v o l v e d in financing a n e w
d a m on the I n d u s ifthe economic, technical, social a n d environmental, institutional, financial a n d
commercial feasibility i s established. As G o v e r n m e n t understands, a n d as this R e p o r t has repeatedly
stressed, building a d a m i s just o n e p a r t of a set of necessary activities, w h i c h include improving the
transparency and efficiency o f administration o f the Water Accord, a n d m a k i n g a set o f institutional
reforms a n d investments at provincial, canal c o m m a n d a n d f a r m levels to ensure better use o f water.

This R e p o r t has concentrated heavily on the challenges in the Indus Basin, because they loom so large
in Pakistan a n d because they are so complex. This focus notwithstanding, the Banks investment
p r o g r a m includes investments in infrastructure (mostly in NWFP a n d Balochistan) in small dams a n d
minor irrigation schemes a n d in groundwater management in the barani areas outside the Indus Basin,

In the u r b a n water and sanitation sector, the B a n k i s likely to finance a project in Punjab, w h i c h would
implement the recommendations o f the ongoing studies, as w e l l as rehabilitation a n d extension o f the

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delivery systems. I f it i s not possible to design a long-term concession contract for Lahore, t h e n t h i s
l o a n might also fund investments w h i c h would b e included in a lease contract.

Pillar 2: Water Resources Management

A s stressed throughout this Report, the development a n d management o f the water resources o f
Pakistan in general a n d the Indus Basin is a huge challenge, requiring very high levels o f administrative,
engineering a n d scientific capability. T h e r e i s b r o a d agreement that over recent decades the capacity
for m o d e r n water resources management at both the Federal a n d Provincial levels has not evolved
rapidly enough to meet the emerging challenges.

Accordingly, over the n e x t CAS p e r i o d the B a n k will give high priority to supporting the development
o f capacity at the provincial a n d federal levels. For surface water supplies a m a j o r emphasis will b e
building on Pakistans p l a t f o r m of defined water entitlements, m a k i n g the administration o f these m o r e
transparent a n d accountable, from t h e inter-provincial to t h e user levels. For groundwater, the Bank
will support the development of a government capacity for knowledge generation a n d management,
a n d for policy a n d implementation of groundwater management. In both cases, there will b e a n
emphasis on incorporating environmental issues (including water quality, wetlands and environmental
flows). An i m p o r t a n t element o f B a n k support will b e training o f a n e w generation o f multi-
disciplinary water resources specialists; a n d will include stimulation o f centers of excellence for water
resources sciences.

Pillar 3: Service Delivery

Infrastructure is, o f course, not a n e n d in itself, but a means to the e n d o f providmg users with better,
m o r e sustainable services. I n m a n y ways, State water institutions in Pakistan (at both the Federal and
Provincial levels) have not m a d e the transition from the era o f development a n d construction to the
era where management o f resources a n d services i s the primary challenge. T h e formal service delivery
structures for both irrigation a n d water a n d sanitation services are exclusively large public enterprises,
w h i c h operate with little accountability to their users, a n d with little transparency. H e l p i n g start the
transition away from this old m o d e l to a m o d e r n service delivery architecture was the m a j o r objective
of the (misnamed) N a t i o n a l Drainage P r o g r a m (which emphasized issues o f water user associations
a n d autonomous provincial irrigation agencies). W h i l e achievements under the NDP were (as
described earlier) modest, m a n y lessons were learned (about keeping projects focused on a f e w key
objectives, and about the need for encouraging experimentation with different forms o f sound
institutional reform), the centrality o f the objectives o f the NDP remain valid.

Accordingly, the B a n k will r e m a i n heavily engaged in provincial efforts to i m p r o v e the quality,

efficiency and accountability with w h i c h services are delivered. Specifically, for reasons described n
this Report, the B a n k will emphasize instruments as m u c h as organizational forms. This will m e a n a n
emphasis on the development of frameworks w h i c h encourage the entry o f n e w players (including
c o m m u n i t y organizations, a n d the small- a n d large-scale private sector), the use o f contracts w h i c h
specify the rights a n d obligations o f providers a n d users a n d benchmarking for all water services. T h e
B a n k will put a m a j o r emphasis on the nexus o f entitlements, measurements a n d transparency. This
will mean emphasizing measurement a n d reporting throughout, a n d the associated investments in
measurement devices, i n f o r m a t i o n technology a n d real-time reporting o f w h a t i s actually delivered to
whom.

Pillar 4: On-farm Productivity

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An i m p o r t a n t distinction between water supply services and irrigation services i s that the former are an
end in themselves, whereas the latter are simply one input into a multi-faceted e f f o r t to i m p r o v e
agricultural production. M a n y o f the elements o f this challenge (such as c r e d t , marketing and
agricultural research and extension services) are addressed as p a r t o f the Bank's overall rural and
agricultural program, and addressed in companion work on those sectors. T h e Bank's water portfolio,
however, has a n d will continue to go beyond delivery o f water services, a n d involve investments in on-
f a r m services (land leveling, watercourse lining, i n t r o d u c t i o n o f n e w technologies) w h i c h are essential
for agricultural diversification and for improving the amount o f crop, i n c o m e a n d jobs produced per
drop o f water.

Priorities and Sequencing

Pakistan needs to m o v e forward on all the four pillars simultaneously. Priorities and sequencing o f
investments (short-, m e d u m - , and long-term) should seek to maximize benefits (measured in terms or
public welfare) from policy reforms and investments, subject to various constraints (budget, water and
other resources).

I n the short t e r m (next 1 to 2 years), the focus would need to b e on the low hanging fruit under each
pillar, w h i c h can b e harvested at relatively low cost and e f f o r t with high returns. These include
improving asset management planning; establishing O&M cost sharing principles; investing in critical
rehabilitation; high p a y - o f f investments that would i m p r o v e water use efficiencies; reducing costs;
decentralizing irrigation management; ensuring greater transparency in water entitlements and
allocations; putting systems and instruments in place; a n d starting activities that have longer gestation
periods, such as planning for m a j o r infrastructure h u m a n resource development and capacity building.

I n the m e d i u m t e r m (next 3 to 5 years), the focus would need to b e on items that require further
preparatory work and analysis of trade-offs (investments in n e w reservoirs, system expansion,
groundwater management, research and capacity building).

Finally, in the long t e r m (6 to 10 years), Pakistan would need to focus on h u m a n resource

development; reviving excellence in research and development; attaining financial sustainability for the
sector and meeting the M i l l e n n i u m Goals for drinking water supply and sanitation.

T h e investment projects:

O v e r the course o f the past year, the G o v e r n m e n t and the B a n k have identified an indicative set o f
projects and programs w h i c h Pakistan i s likely to ask the B a n k to finance. I t i s agreed that the B a n k
would p r o v i d e support through i t s various lending instruments, i n c l u d i n g budgetary support for
policies and prior actions that address key issues (Development Policy Lending) as well as through
specific investment l e n d i n g for infrastructure and institutional reforms. There i s agreement that there
will b e a m a j o r increase in B a n k lending for water-related activities, with t h e indicative overall figures
shown in Figure 84. This would m e a n that water-related l e n d n g for Pakistan would increase about 10-
fold from the 2000-2004 period, and account for about $1billion in the c o m i n g four years. T h e
tentative lending p r o g r a m for the n e x t four years would b e as follows:

Punjab Irrigation Policy Loan (US$400 million): This 3 to 4 year p r o g r a m would support the
r e f o r m p r o g r a m in Punjab's irrigation sector, built on four pillars: asset development and management;
water resource management (including investments in capacity building, knowledge generation a n d
management, and pilot projects for groundwater management); r e f o r m o f irrigation service delivery;
and enhanced o n - f a r m services to increase water productivity. T h e policy framework c o u l d include a
medium-term (ten year) vision o f how Punjab wishes to change i t s management o f water resources and

113
irrigation services, including b r o a d outcomes and targets and short-term targets o f w h a t can b e
achieved immediately in terms o f the policy and institutional reforms.

Punjab Municipal Services Improvement Loan (US$G5 million): This l o a n i s designed to

i m p r o v e efficiency, coverage and quality o f basic infrastructure/services through: developing a n
efficient mechanism for allocating public resources for infrastructure; building capacity o f government
to manage local government performance i m p r o v e m e n t and o f city districts/TMAs for i m p r o v e d
u r b a n management, governance and delivery of u r b a n services and; providing performance-related
matching grants for infrastructure repair/renewal. I t i s likely that water and sewerage services would
b e p a r t of this.

Sindh Water/Irrigation Sector Improvement Program (US$140 Million): T h e project would

i m p r o v e water productivity through a r e f o r m agenda/investments leading to better management
system that links canal c o m m a n d areas, the distributary and the watercourse level. Components
include; capacity budding; civil works; agriculture and irrigation technology; and management and
administration.

NWFP - Irrigation Sector Improvement Program ( U S $ 7 0 million): T h e project would i m p r o v e

water productivity through a r e f o r m agenda/investments leading to better management system that
links canal c o m m a n d areas, the distributary and the watercourse level. Components include; capacity
building; c i v i l works; agriculture and irrigation technology; a n d management a n d administration.

Private Power (Bank Group) Investment (Total $200 million): In v i e w o f the projected shortfall
in generating capacity (from about 2007-08), there i s a n urgent need to elicit private sector resources
for new/greenfield generation projects. T h e Bank, jointly with I F C and/or MIGA, would support
G o v e r n m e n t efforts to attract private investments for such projects, including, potentially, both run-
of-the-river and multipurpose hydropower projects.

Punjab Water Infrastructure Investment (US$150 million): Several barrages in Punjab require
rehabilitation and modernization to address problems arising from deficiencies w h i c h c o u l d lead to
progressive structural failure a n d serious economic consequences. Besides physical rehabilitation,
improvements and modernization, the project will also support institutional a n d organizational
restructuring a n d capacity buildmg, and i m p r o v e d O&M regimes.

Balochistan Small-scale Irrigation ( U S $ 4 0 million): T h e project would develop water resources

through restoring and increasing water storage; increasing productivity of water through m o r e efficient
use, and developing capacity to formulate a water resources development plan using surface,
groundwater and watershed management. Components include: water management (with a special
emphasis on groundwater); infrastructure for restoring the hydrological balance of B a n d Khushdd
Khan; construction o f delay action dams a n d selected small-scale irrigation projects; o n - f a r m water
management; modernization o f irrigation systems and subsidies for efficient o n - f a r m irrigation systems
and m o d e r n irrigation technologies; and institutional development - a m o n g farmers, water users and
different levels o f government.

Punjab Water Sector Irrigation Investment (US$lOO million): T h e project would support
institutional reforms in water resource management a n d delivery o f irrigation services in specific canal
commands o f Punjab through a n "incentive-based approach". Farmers and farmer organizations will
play a m a j o r role and would compete for a set o f "rewards" for meeting specified "entry conditions"
T h e "entry conditions" would relate to items like f o r m a t i o n o f farmer organization, c o m m i t m e n t to
implementing water entitlements, provider/user contracts, water measurement a n d monitoring. T h e
"rewards" would b e investments in capacity building, canal modernization, measurement devices, and

114
o n - f a r m services a n d possibly a n option in w h i c h t h e farmers c o u l d choose professional
management.

A Federal Water Resources Capacity Building Loan (US $ 4 0 million): This p r o j e c t would
develop the capacity o f the Federal G o v e r n m e n t (including the p r o p o s e d N a t i o n a l W a t e r C o u n c i l a n d
i t s Secretariat, IRSA, P l a n n i n g Commissions W a t e r Resources Section, a n d W A P D A - w a t e r wing) to
b e c o m e a m o r e effective custodian o f the nations water resources. I t will include m a j o r investments
in knowledge management (including m o d e r n i z a t i o n of measuring equipment, decision support
systems, a n d priority applied research); i t will include training o f a n e w generation o f multi-disciplinary
water resources specialists; a n d will include stimulation o f centers of excellence for water resources
sciences.

O n e m a j o r issue that i s likely to emerge in t h e n e x t CAS p e r i o d - but i s not i n c l u d e d in the current

indicative l i s t o f projects -- i s possible B a n k engagement in developing a n d co-financing m a j o r n e w
Indus B a s i n storage a n d hydro, i f a n d w h e n the G o v e r n m e n t makes such a decision. In discussions
with the G o v e r n m e n t i t has b e e n agreed t h a t B a n k c o u l d b e i n v o l v e d if the economic, technical, social
a n d environmental, institutional, financial a n d commercial feasibility i s established a n d these
investments are accompanied by institutional r e f o r m s a n d investments at provincial, canal c o m m a n d
a n d f a r m levels to ensure better use of water.

Analytic and Advisory Services:

A s described throughout this report, Pakistan i s going to have to invest heavily in t h e generation a n d
management of knowledge. Pakistan looks to the B a n k as a m a j o r partner for providmg g l o b a l
knowledge on m o d e r n water development a n d management. In the past the B a n k has p r o v i d e d such
services out o f i t s own resources a n d by m a k i n g use o f a variety o f global t r u s t funds. G i v e n t h e n e e d
to intensify such analyuc a n d advisory services, t h e B a n k i s developing, with partial support from the
G o v e r n m e n t o f the Netherlands, a multi-year p r o g r a m w h i c h would enable t h e provision o f a greatly-
increased set o f advisory, knowledge a n d capacity building services to both Federal a n d P r o v i n c i a l
governments.

In t h e i m p o r t a n t u r b a n water a n d sanitation sector, t h e B a n k Group has recently b e c o m e i n v o l v e d in

a n advisory capacity in Punjab. T h e IFC i s providing advisory services for Lahore, w h i l e t h e B a n k i s
h e l p i n g to investigate contractual incentives, financing mechanisms, pricing, regulatory mechanisms
a n d budding capacity to i m p r o v e u r b a n water a n d sanitation services in o t h e r towns.

T h e B a n k has not b e e n i n v o l v e d in r u r a l water supply a n d sanitation for some time, a n d thus has
l i m i t e d knowledge of t h e sector. G i v e n the i m p o r t a n c e o f this sector for welfare o f m a n y poor people,
the B a n k needs to re-engage. A f i r s t step would b e a review o f the status o f t h e sector a n d k e y
policies, with a particular focus on t h e p r o j e c t i n i t i a t i o n a n d design mechanisms, t h e supply chain, cost
recovery a n d operations a n d maintenance arrangements. A m a j o r challenge i s l i k e l y to b e the
e v o l u t i o n o f infrastructure-driven P u b l i c H e a l t h E n g i n e e r i n g Departments.

Evolving priorities and the indicative Bank water investment program

T h e Country Assistance Strategy i s not a d o c u m e n t w h i c h i s set in stone, but r a t h e r a living d o c u m e n t

(with a n associated set o f l e n d i n g a n d n o n - l e n d i n g activities) w h i c h evolves as c o n d i t i o n s a n d
knowledge change. T h e intensive work a n d discussions w h i c h were p a r t o f p r o d u c i n g this d o c u m e n t
have, predictably a n d appropriately, changed perceptions both in Pakistan a n d t h e B a n k a n d brought
to t h e fore several h i t h e r t o relatively-neglected priorities. In particular there are two areas that are
likely to gain greater p r o m i n e n c e t h a n they have in the current indicative CAS plan.

115
T h e first o f these i s u r b a n water supply a n d sanitation. Pakistan i s urbanizing a n d industrializing
rapidly. W h i l e irrigation will remain by far the largest user o f water, in the future water development
a n d management in Pakistan will no longer b e synonymous with irrigation a n d drainage. There are
several dimensions to this shift: m o r e and m o r e water will need to b e reallocated from agricultural to
u r b a n uses; m u c h greater investments will need to b e made in collecting a n d treating u r b a n a n d
industrial wastes; a n d m a j o r changes will need to b e made in the w a y in w h i c h u r b a n services are
financed a n d delivered so that coverage a n d service quality are improved. To a substantial degree the
long history of B a n k engagement with water through the irrigation sector in Pakistan has meant that
the Banks view, a n d the Banks water-related investments (as s h o w n in Figure 84), have not adequately
reflected the need for similarly-intense attention to municipal a n d industrial water a n d wastewater.
T h e discussions stimulated by this Report concluded that this i s indeed a n area where Pakistans needs
are large and growing, a n d where the B a n k needs to become m o r e engaged. T h e B a n k will do this by
initiating detailed analytic work on municipal and industrial water a n d wastewater. I t is likely that a
p r o d u c t o f this work will b e a p r o g r a m o f B a n k investments in m u n i c i p a l a n d industrial water and
wastewater w h i c h i s m o r e substantial t h a n that reflected in this Report.

T h e second area of relative B a n k neglect that emerged during discussions of this R e p o r t i s that o f
hydropower. Again, in p a r t stimulated by the discussions a r o u n d t h i s Report, the B a n k will start a
process of m o r e specific assessment o f the role o f hydropower (micro a n d mini a n d large, both
through run-of-the-river a n d storage projects) and the potential for greater B a n k involvement.

116
 ENDNOTES

1 Akhter Hameed K h a n , A History of the Food Problem, The Agricultural Development Council, 1973.
2 Akhter Hameed Khan. A History of the Food Problem. Agricultural Development Council, N Y 1973.
3 Deepak Lal, Cultural Stabilitv and Economic Stacnation: India 1500 BC - 1980 A D
4 In the evocative phrase of Arthur Maass and -Raymond L. Anderson And the Desert Shall Rejoice : Conflict,
Growth. and Justice in Arid Environments, M I T Press, 1978
5 Imran Ali. The Puniab under Imuerialism. 1885-1947, Princeton University Press, Princeton NJ 1988.
6 Paper 10
7 Paper 10
8 Paper 16
9 Paper 16
10 Paper 16
11 Imran Ali book
12 ND Gulhati. Indus Waters Treatv: An Exercise in International Mediation, Allied Publishers, Bombay 1973.
and Ramaswamy Iyer
13 Gulhati and Undula
14 Gulhati and Undula
15 Shapland in Undula Alam
16 Gulhati
l7 Ayub K h a n in Gulhati page 340.
18 Paper 2
19 Peter Hazell. and C. Ramasamy. 1991. The Green Revolution Reconsidered: The Impact of High Yielding
Varieties in South India, Baltimore, Md. : The John Hopkins University Press.
20 Paper 11
21 Ramesh Bhatia. Economic Benefits and Synergy Effects of the Bhakra Multipurpose Dam, India: A case
study, World Bank 2005 (draft).
22 Ramesh Bhatia. Water and Growth, Background Paper Report, 2005
23 Peter Hazell. and C. Ramasamy. 1991. The Green Revolution Reconsidered: The Imuact of High Yieldiw
Varieties in South India, Baltimore, Md. : The John Hopkins University Press.
24 Ramesh Bhatia. Economic Benefits and Synergy Effects of the Bhakra Multipurpose Dam, India: A case
study, World Bank 2005 (draft).
25 Pelliquen, Shripad
26 Paper 16
27 Paper 16
28 Paper 16
29 I a n Calder in the Economist and elsewhere
30 Paper 16
31 Assuming an area of roughly 200 km x 300 km, a change of depth o f 15 meters and a storage coefficient of 0.3
32 Tushaar Shah Accountable institutions, Background Paper Report, 2005.
33 Reference to whoever has Johnson 1989 as a reference.. . Ithink smedema or maybe pervaiz.
34 Reference i s whoever has Johnson 1989 as a reference!
35 Paper 12
36 Same reference
37 Paper 12
38 Imran Ali
39 Imran Ali
40 Clifford Geertz Agricultural Involution
41 Paper 10
42 Paper 10
43 Douglass North
44 Faizul Hasan Paper 6

117
45 Paper 5
46 E d L u c e FT piece on India
47 For example Brazil, as documented in World Bank Water Resources Sector Strategy 2003.
48 Arif Hasan, in John Briscoe, TWOdecades of change in a Bangladeshi village, EPW, Vol XXXVI, N o 40,
October 26,2001.
49 Paper 2
50 World Bank. Indias Water Economy: Facing a Turbulent Future, draft 2005
jl Barbara A. Miller, A. Whitlock and R.C. Hughes. Flood Management - the TVA experience, TVA, Oak
Ridge, 1998.
52 Ainun Nishat poweipoint presentation on Flood Management in Bangladesh, World Bank Water Week 2005
53 Paper 5
54 Paper 5
j j Minding the wheat market, Editorial, Dawn April 14,2005.

56 ??Ahmad,-- check
j7Paper 2

j8IWMI Research report 65

59 Shahid Ahmad
Shahid Ahmad
61 Shahid Ahmad
62 Gulhati 1973
03 Shahid Ahmad

64 Pervaiz Amir
65 Directly from Imran Ali
66 Shahid - double check
67 Imran Ali
68 Described in many o f the background papers report
69 Indus River System Authority. Apportionment o f Waters of Indus River System between the Provinces o f
Pakistan: Agreement 1991 (A chronological expose), undated.
7o Indus River System Authority. Apportionment of Waters of Indus River System between the Provinces of
Pakistan: Agreement 1991 (A chronological expose), undated.
71 Paper 1
72 Pavan Varma, Being Indian
73 Paper 12
74 Ahmad
75 Paper 12
76 Van Steenbergen
77 Paper 12
78 Kansas case - see India paper
79 Gohar, personal communication in review o f initial draft of this report.
Paper 12
Kemper and Briscoe Mexico paper
82 I n d i a Water CAS
83 Kemper Mexico
84 Paper 12
85 Paper 12
86 Paper 12
This section draws heavily, and often directly, on the background paper by Bhutta and Smedema Paper 17
88 Paper 17
89 Paper 12
90 Paper 12
91 This section draws heavily, and often directly, on the background paper by Vakar Zachariah
92 Paper 3
93 ND Gulhati. Indus Waters Treatv: An Exercise in InternationalMediation, Allied Publishers, Bombay 1973.
94 Indus River System Authority. Apportionment o f Waters of Indus River System between the Provinces of
Pakistan: Agreement 1991 (A chronological expose), undated.
95 Paper 9

118
96 Paper 3
9 Shahida Jamil, personal communication as part o f a review o f an earlier draft o f this Report.
98 Paper 5
99 Paper 2
100 Paper 3
101 Paper 12
102 Van Steenbergen, personal communication as part of a review of an earlier draft of this Report.
Paper 15
Paper 15
Paper 15
Paper 15
lf17 Paper 15
lo* Paper 15
IO9 Estimates prepared by Punjab IPD September 2005.
OAustralian experience shows that the average renewals annuity, which includes the cost of both replacement
and operations and maintenance, is about 3% to 4% for older, and 2% to 3% for newer assets. Personal
communication, Golbourn Murray Water and the Murray Darling Basin Commission, 2005.
Paper 1 5
112 Paper 1
113 Van Steenbergen, personal communication in a review of an earlier draft o f t h i s Report
114 An asset value of US360 billion over 20 million hectares implies an asset per hectare served o f US$3,000.
Nirmal Mohanty. Moving to scale, Report, 2005.
116 Pervaiz paper 11
117 Paper 2
11* WCD study
119 Paper 4
Supplementing data of Ledec 2003.
121 Khaled Ahmed: Sindh: The feel-bad factor, The Fridav Times, Lahore, May 2005
122 Sardar Tariq paper 14
123 Pervaiz Amir paper 11
124 Paper 2
12) WDR 1992
126 Paper 3
127 Paper 9
12* For example, i f rainfall i s higher, streamflow may extend over several months in addition to the relatively
short duration flood flows, in which case proportionatelymore water can be stored for a longer period if the
site has sufficient reservoir capacity. However, since the prevailingconditions over most of the year are arid
to semi-arid, there must always b e a concern for the higher evapotranspiration losses that stem from storage
of water in an open reservoir.

There appears to be l i t t l e systematic study and analytical results on which to base estimates of the amount of
recharge possible or the extent of i t s influence at a particular site

130 David Mosse The Rule of Water: Statecraft. Ecolow and Collective Action in South India, Oxford University
Press, 2003.
Tariq and Shams
132 Kyu Sik Lee. Costs of infrastructure deficiencies in manufacturine in Indonesia. N i g e r i a and Thailand. Policy
Research Working Paper WS1604, The World Bank, 1996
133 Omkar Goswami. The urgent need for infrastructure, T h e Economic Times, Delhi, April 25,2005.
134 National Research Council. Privatization o f Water Services in the United States: An Assessment of Issues and
Experience, Washington DC 2002.
135 World Bank. The Environment and Develobment. The World Development Report, 1992. Washington DC.
13G ICID and others benchmarking
13 Asian Development Bank, U t i l i t i e s D a t a Book, Manila 2003.
13* Public Affairs Centre. Towards user report cards on irrigation services: Learning from a pilot project in
India. Bangalore, December 2002.

119
139 Manuel Contijoch, personal communication
140 IUlurram Shahid, paper 9
141 Paper 9
142 Saleth paper
143 Stephen E. White and David E. ICromm. Local groundwater management effectiveness in the Colorado and
Kansas Ogallala Region, N a t u r a l Resources lournal, Vol35, 1995.
144 ICarin ICemper and John Briscoe. Mexico: Policv ODtions for Aauifer Stabilization, World Bank 1999.
145 Stephen E. W h i t e and David E. ICromm. Local groundwater management effectiveness in the Colorado and
I<ansas Ogallala Region, N a t u r a l Resources lournal, Vol35, 1995.
146 Paper 6
Paper 5
148 Paper 5
149 Paper 7
ljoMohanty

151 David Mosse The Rule o f Water: Statecraft. Ecolow and Collective Action in South India, Oxford University
Press, 2003.
152 Paper 10
153 World Bank, Water Resources Sector Strategy, Washington DC 2003
154 John Briscoe, John Briscoe. Managing water as an economic good: Rules for reformers, Water Supplv 15
(4), 1997, supplemented by the observations o f many people and politicians who have led reform processes
around the world. Reference Hague session.
155 Kenneth Bodding. The Economist and t h e Engineer. Pp 82-92, in Economics and Public Policv in Water
Resources Development, ed SC Smith and EN Castle, Iowa State University Press, 1964.
156 John Briscoe. Managing water as an economic good: Rules for reformers, Water SUDD~V15 (4), 1997.
157 Pervaiz Amir, background paper on dams
158 Manuel Contijoch, personal communication
159 Imran Ali
160 Operations Evaluations Department, Bridgnc Troubled Waters, World Bank, Washington D C 2002
161 Lawrence Summers in Practitioners o f Development series at the World Bank. www.worldbank.org
162 OECD. Water management: Performance and challenges in OECD countries, Paris 1998.
163 The International Conference on Water and the Environment, Dublin, www.wmo.organd the World Bank
Water Resources Manasement Policy Paper, Washington D C 1993.
164 Robert Samuehn. Reform aint what i t used i t be, The Washington Post, June 5, 2004
165 Sebastian Mallaby. The Worlds Banker. Penguin, 2004.
166 N.D.Gulhati. Indus Waters Treaty: An Exercise in International Mediation, Allied Publishers, New Delhi
1973
167 Undula Alam. Water Rationalitv: Mediatingthe Indus Waters Treaty. Ph. D. dissertation, Durham
University, 1998. p 340
168 Iaaled Ahmed: Sindh: The feel-bad factor, The Friday Times, Lahore, May 2005, and Pervaiz Amir
background paper
169 Judith Tendler
170 World Water Forum, the Hague, 2000.
171 Articulated at the Hague World Water Forum in 2000 by Digvijay Singh, then-Chief Minister o f Madhya
Pradesh in India:
172 Graham Chapman, ICeval Kumar, Caroline Fraser and Ivor Gaber. Environmentalism and the Mass Media:
The North-South Divide. Routledge, 1997.
173 Montek Ahluwalliah, Practitioners in Development, World Bank, 2004.
174 This section i s based directly on the background paper by Usman Qamar, which draws on the following
documents: Agadtuie Operations Division, South Asia Regional Office, T h e World Bank, Project Completion Note :
Indus Basin Project 1964 SupplementalCredit, May 1993, ImgationIDavison, South Asia Project Department, T h e World
Bank, Project Completion Report:Tarbela Dam Project, April 1984
Operations EvaluationDepartment,The World Bank, Project Completion Report: Tarbela Dam Project,
September 1986, Operations Evaluation Department, The World Bank, Pakistan - On Farm and Command
Water Management and Irrigation Systems RehabilitationProjects, Environment and Social Development Sector
Unit, Rural Development Unit, South Asia Region, The World Bank, Pakistan Public Expenditure Management :
Accelerated Development of Water Resources and Irrigated Agriculture, Vol-11, January 2004.

120
175 I n c l u d i n g seven IDA Credits for the f o r m e r E a s t Pakistan for a total a m o u n t o f U S D 3,832 million

equivalent
176 U s m a n Qamar background paper
17 Subsequently the B a n k also administered the Tarbela D e v e l o p m e n t Fund.
178 T h e OED PPAR for Tarbela d a m also n o t e d that ..agricultural benefits o f Tarbela c o u l d b e increased

considerably i f water supplies that are surplus to historical water rights c o u l d b e allocated according to regional
m a r k e t d e m a n d (given enabling drainage investments in saline groundwater areas), rather t h a n according to
statute., ., T h e inter-Provincial Water A c c o r d was ultimately signed in 1991.
179 W h i l e the L i e f t i n c k R e p o r t (1967) h a d advocated Tarbela d a m as the center piece of the IBDP, i t h a d also

p o i n t e d to the n e e d for coupling water development with agricultural development i f the full benefits o f water
development were to b e realized. Complimentary programs were to include rehabilitating, m o d e r n i z i n g a n d
expanding the existing irrigation systems a n d m o d e r n i z i n g agriculture by w i d e r use of technical inputs, improving
water regulation practices a n d o n - f a r m water management, reducing subsidies, increasing water charges,
providingdrainage a n d water quality management, a n d strengthening infrastructural support for agriculture.
18 Until the early 1970s abiana proceeds were sufficient to cover the full operation a n d maintenance (O&MJ
cost a n d a small percentage o f capital cost. However, the t h e n g o v e r n m e n t did not increase abiana rates even in
n o m i n a l terms a n d recoveries fell far b e l o w O&M expenditures.
181 E x p e n d i t u r e on O&M o f S C A R P tube wells accounted for nearly 50% o f the Punjab I r r i g a t i o n

Departments annual O&M budget.

lB2 For example, the option of using evaporation ponds for saline effluent disposal was rejected based on the
results o f poorly sited evaporations ponds in S A C R P VI. E v a p o r a t i o n ponds have been successfully used in
countries such as Australia for disposing saline drainage effluent.
183 Generally, original design criteria o f the canal system h a d evolved to fit availability o f water supplies in the
rivers, to m e e t the objective o f bringing to m a t u r i t y the largest possible area of crops with the minimum
c o n s u m p t i o n o f water, a n d to operate at a low cost a n d with a l i m i t e d n u m b e r of technical staff. These resulted
in low c r o p p i n g intensities a n d low yields. W h i l e these irrigation schemes were historically v e r y successful in
generating agricultural surpluses at a t i m e o f low p o p u l a t i o n densities a n d f e w technological demands, they have
b e e n less w e l l adapted to the requirements o f m o d e r n agriculture.
lB4 I t i s i m p o r t a n t to clarify here that water losses in areas underlain with fresh ground water are not real losses
as these losses simply recharge the aquifer for later usage. T h e only real savings in losses are those obtained in
S G W areas.
1 8 j O t h e r t h a n emergency assistance for flood damage a n d operations already appraised by then.

For example, not i n c l u d i n g the PIDs as participating agencies in the project w h i l e seeking to replace t h e m
with alternative bureaucracies
lE7 O p p o n e n t s of r e f o r m s w a n t e d to create the impression that the r e f o r m s h a d failed; however, the
opposing v i e w i s t h a t actually the agencies failed to reform.
lB8 With the exception o f S i n d h where t h e B a n k h a d earlier a p p r o v e d a n IDF grant for preparing a n
institutional development pilot project for the N a r a Canal AWB.
lB9 As p a r t o f this project, a d r a f t f r a m e w o r k for groundwater regulation in Punjab was also prepared.
190 I n c l u d i n g i n t r o d u c t i o n o f micro-irrigation technologies a n d piloting o f volumetric water delivery and
abiana on the basis o f volumetric deliveries
191 World B a n k . ICR for G h a z i B a r o t h a H y d r o p o w e r Project, June 2004.
192 World B a n k . ICR for G h a z i B a r o t h a H y d r o p o w e r Project, June 2004.
193 This section draws directly on a b a c k g r o u n d paper by Pervaiz Amir a n d N a d i r Abbas
194 A n d r e w Balls, World B a n k u n d e r fire on spending priorities, Financial Times, 20 M a y 2005.

121