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Public Disclosure Authorized

in of

The WorldBank

Report No. 6398

Public Disclosure Authorized

Public Disclosure Authorized




September15, 1986
Public Disclosure Authorized


This documenthasa restricteddistibution and may be used by recipientsonlyin the performance

of their officialduties.Its contentsmaynot otherwie be disclsed withoutWorldBankauthorization.

DOM - Duloy/O'Mara Study

ERR - Economic Rate of Return
FGW - Fresh Groundwater
GOP - Government of Pakistan
IBDF - Indus Basin Develooment Fund
IDA - InternationalDevelopment Association
O&M - Operation and Maintenance
OED - OperationsEvaluation Department
PCR - Project Completion Report
PPAM - Project Performance Audit Memorandum
PPAR - Project Performance Audit Report
SAR - Staff Appraisal Report
SGW - Saline Groundwater
TDF - Tarbela Development Fund
TW - Public Tubewell
UNDP - United Nations Development Programme
WAPDA - Water and Power Development Authority


kv - kilovolt: 1,000 volts

kw - kilowatt: 1,000 watts
kwh - kilowatt hour: urnitof work or energy equal to
that expended by one kilowatt in one hour
MAF - million acre feet
Mw - megawatt: 1,000,000watts
uF%ffA 0 JI

of D,wto.GaswaI
opsratwme EvaiuatiaA

September 15, 1986


SUBJECT: Project Performance Audit Report on Pakistan Tarbela Dam

Project (Loan 548-PAK and Credits 581- and 771-PAK)

Attached,for information,is a copy of a reportentitled

PerformanceAudit Report on PakistanTarbelaDam Project
(Loan548-PAKand Credits581- and 771-PAK)"preparedby the


This document has a restricted distribution and may be used by recipients only in the performance
of their officialduties Its contents may not otherwise be disclosedwithout World Dank authorization.





Preface .......................................**..*******..**....* i
Basic Data Sheet ................. . ........................... iii
Evaluation Summary .... ......................................
....... iv

1. SUMMARY .. oo........... ,,............. 1

and Design .... 1
Implementation................ *.*.*S...***************** 3
Impact *.000000000000000000000000000000000000000000000000.. 5

II. MAIN ISSUES ................. 7

A. Economic
Evaluation *0e0@0**0e*.........*......... 7
B. IrrigationWater Allocation ...........................12
C. Water ResourcePlanning ...............................13
D. CofinancingThroughDevelopmentFunds .... 15
E. Prioritiesin ProjectEmergencies ..................... 16

Appendix: BorrowetComments *4 ..............................

0000 000 17

I* Introduction ......... , ..................................23
II. Background0000. ..........................
* 26
III. Project Formulation .................................30
IV. PrincipalProject Features ................................32
V. ProjectAdministrationand Management 33
VI. Project Implementation ....................................38
VII. Remedial/RepairProgram ........................... 42
VIII. Future Work ................. 45
IX. OperatingPerformance ........................... 48
X. Financial Performance *.................................. 50
XI. InstitutionalPerformanceand Development................. 51
XII. EconomicRe-evaluation..... o...... ....................... 53
XIII.Bank Performance ............. ............
* 57
X'V. Conclusions ..........................................59

Annexes , ....
, . ..............................
, 63
Map IBRDNo. 3891(PCR)

This documenthasa restricteddistributionand maybe used by recipientsonlyin the performance

of theirofficialduties.Its contentsmaynot otherwisebe disclosedwithoutWorldBankauthorization.




This is a performance audit of the Tarbela Dam Project in Pakistan,

for which one Bank loan and two IDA creditswere approvedas follows: Loan
548-PAKin 1968 for US$25.0million equivalentas an initialcontribution to
the TarbelaDevelopmentFund (TDF);Credit581-PAKin 1975for US$8.0million
equivalentas a contributionto the TDF Supplemental Agreement;and Credit
771-PAKin 1978 for US$35.0million equivalentas a contributionto the TDF
SecondSupplemental Agreement. The audit coversnot only the foregoingloan
and creditsbuz also the EEC SpecialAction Credit51-PAKin 1980 for US$9.0
million equivalentin support cf the general purposesof the TDF, and all
other projectfinancing. The Bank loan and creditswere fully disbursedby
September1981, at which time other monies from bilateralcontributorsand
Pakistanstill remainedin the TDF.

The audit has a number of specialfeatures. First, it covers a

series of lendingoperations,beginning18 years ago, for an extremelylarge
civil engineeringprojectwhose completionwas substantially delayedby major
mishaps. Second,OED decidedat an early stage in its reviewnot to comment
on, or evaluate,the technicalengineeringaspectsof thesemishaps. It had
long been felt that OED could not add materiallyto the lessonslearntfrom
those problems,and this was an importantconsidaration when the time came
for audit. Instead,it was decided to focus attentionon other aspectsof
the investments,particularlytheir economic rationale. Third, the audit
reviewsthe eventsduringthe 30 years of Bank involvementin the Indus Basin
and TarbelaDam projects. During the last 15 years of the period the spot-
light has been on Tarbela,and althoughthese years are coveredin greater
detail,much is necessarilypresentedbriefly. There are no staff appraisal
reportsto which one can refer for earlieranalysesand views,nor are there
previous completionreports covering the Bank's loan and credits; conse-
quently, the format and content of this report are somewhatdifferentfrom
the standardPPAR.

The audit report comprises: an audit memorandum(PPAM),prepared

by the OperationsEvaluationDepartment,and a Project CompletionReport
(PCR) preparedby the South Asia ProjectsDepartment. The latter'sdiscus-
sions with Pakistan'sWater and Power DevelopmentAuthority (WAPDA) on
- ii -

preparationof a draft PCR were initiatedduring a mission in May 1982. In

December 1982, WAPDA furnisheda partialdraft of the PCR. Remainingpor-
tions were furnishedat the end of June 1983. Using the WAPDA materialand
other materialin Bank files, a Bank draft was completedin mid-August1983
and furnishedto WAPDA staff and to the Bank consultantson the Tarbela Dam
Project,and their technicalreviewwas requested. WAPDA'sand the consult-
ants' commentswere consideredin the preparationof the PCR which was com-
pleted in April 1984. In additionto these sources,the PPAR is based on a
review of the relevant President'sReports and Loan and Project Agree-
mentsl/, the Administrator's Reports and related documents,and correspon-
dence with the Borrowerand internalBank memorandaon projectissuesas con-
tained in relevantBank files. Bank staff associatedwith the projecthave
also been interviewed.

An OED missionvisitedPakistanin November/December 1984. It held

discussionswith WAPDA, the Ministry of Water and Power, the Ministry of
Planning and Development,and the Bank's consultantfor the project (Sir
AlexanderGibb and Partners). It also visitedthe projectsite on the Indus
River. The informationobtainedduring the mission was used to test the
non-engineering conclusionsof the PCK and to elaborateon a numberof issues
in the audit memorandum. The technical,engineeringfeaturesof the Tarbela
Dam and its remedial/repair program have been reported in many documents,
particularlyin the half-yearlyAdministrator's Reports,the SpecialReports
of the Administrator(seeAnnex 7 to the PC,(,items 8, 14, 15, and 21) and in
the Bank consultants'report of June 1980 (see PCR, Annex 7, item 23). A
list of principalreferencesand publicationsis given in PCR Annex 7. In
addition,the technicalproblems of the project are reviewed in the PCR
(paras.7.03-7.04and 14.13-14.14).

Ignoringthe technicalissues,on which it takes no position,the

audit finds the PCR comprehensive
and generallyaccuratewith respectto the
project'sprincipalachievements. Part II of the audit memorandumcomments
on the PCR's evaluationof power and agriculturalbenefits,but the audit's
suggestedchangesoffsetone another. The main issuesdiscussedin the audit
memorandumhave been selectedbecause of their relevanceto the evaluation
and financingof large civil works and to the handlingof emergencysitua-
tionsthat threatenthe integrityof such works.

The draft report was sent to the Borroweron April 9, 1986 for
comments. Commentsreceivedfrom WAPDA are attachedas an appendixto tile

The valuableassistanceprovidedby Governmentstaff, and by the

other individualsinterviewedis gratefullyacknowledged.

1/ These were as follows: for Loan 548-PAK,the President'sReport No.

P-616 of June 18, 1968 and Loan Agreementof July 10, 1968; for Credit
581-PAK, the President'sReport No. P-1674-PAKof July 10, 1975 and
DevelopmentCreditAgreementof August 15, 1975;for Credit771-PAK,the
President'sReport No. P-2228-PAKof February15, 1978 and Development
CreditAgreementof March 10, 1976.
- iii -



(LOAN 548-PAlt CREDITS581- AND771-PAK)/a


Initial Actual or Actual as S of
Estimate Estimated Actual Initial Estimate

Basic Project Cost (US$ million) /b 828.0 954.0 115

Total Project Cost (US$ millior.) 7; 828.0 1,497.0 181
Date Physical Components Completed 04/76 1984 /d 200
Proportior. then comapleted (2) - 100
Portion of Time Overrun (2) - 100
Economic Performance (ERR 2) 9-13 12.5 96-139
Institutional Performance - Satisfactory
Financial Performance Satifactory
Date Board Approval Lr.. 548-PAK (US$25 million) 06/19/68 Effective 08/02/68
Date Board Approval Cr. 581-PAK (US$8 million) 07/2/75 Effective 08/15/75
Date Board Approval Cr. 771-PAK (USS35 million) 02/28/78 Effective 02/28/78
Date Board Approval EEC SA Cr. 51-PAK (US$9 million)02/23/RO) /e Effective 06/02/80

FY69 FY70 FY71 FY72 FY73 FY74 FY75 FY76 FY77 FY78 FY79 FY80 FY81 FY82
Initial estimate (USS in)
Actual (USS million)
Actual as X of Appraisal estimate
Dates of Final Disbursement: Ln. 548-PAK 11/16/76; Cr. 581-PAR 01/13/76; Cr. 771-PAK 09/09/81.


FY68-72 FY73 FY74 FY75 FY76 FY77 FY78 FY79 FY80 FY81 FY82 FY83 FY84 FY85

Negotiations n.a. 7.2

Preparation n.a. 0.2
Supervision n.a. 3.4 35.6 20.2 36.1 37.3 54.0 88.7 14.2 31.6 40.1 25.2 33.1


Month/ No. of Staffdays Specializarions Performance Types of

Mission Year Persons in Field Represented /a Rsting /h Trend /i Problems /

Supervision 1 08/80 1 10 e 2 1 T,F

Supervision It 12/80 1 25 e 2 1 T,F
Supervision III 03/81 1 17 e 2 1 T,F
Supervisior. IV 07/81 2 16 e.n 2 1 T,F
Supervision V 09/81 1 16 e 2 1 T,F
Supervision VI 06/82 1 20 e
Supervision VIl 09/82 1 12 2 1 T,F
Supervision VIII 01/83 1 21 e 2 1 T,F
Supervision IX 06/83 2 27 e,n 2 1 T,F
Supervision X 09/83 1 21 2 1 T,F
Supervision XI 01/84 1 14 e 2 I T,F
Supervision XII 09/84 1 9 e 2 1 TJF
Supervision XIII 12/84 1 16 e 2 1 T,F
Supervision XIV 05/85 1 10 e
Supervision XV 10/85 1 12 e 2 1 T,F


Borrower Islamic Republic of Pakistan

Executing Agency WAPDA
Fiscal Year July I to June 30

Name of Currency (abbreviation) Rupee (Rs)

Currency Exchange Rates:
Appraisal Year Average US$1.00 - Rs 4.76
Completicn Year Average US$1.00 - Rs 12.00

/a Bank acts as Administrator of Tarbela Development Fund which includes not only these loans and credits,
but also contributions from several bilateral contributors 'Tarbela Development Fund Agreement
(1968) and from Pakistan.
/b Does not include costs of remedial/repair program.
7; Includes costs of remedial/repair program.
7; Final completion was delayed by repair of a series of damaging events (see Chapter VII, PCR)
7T US$7.06 million equivalent disbursed. Difference due to fluctuations in values of the several
/f Source, Planning and Budgetting Department - in staff weeks
e - engineer, n - loan officer.
7i 1 - Problem-free or Minor Problems; 2 - Moderate Problems and 3 - Major Problema.
7W I - Improving; 2 - Stationary; 3 - Deteriorating.
TI T - Technical; F - Financial.
- iv -






Tarbela Dam, the largest fill-typedam in the world, is the key

feature,and the last to be constructed,of the Indus Basin Project. The
Bank assisted in mobilizingfunds and served as Administrator of both the
Indus Basin DevelopmentFund (IBDF) (1960-67)and the Tarbela Development
Fund (TDF) (1968-present),managingthe disbursementof over US$2.3 billion
equivalent. As Administrator of the IBDF and TDF, the Bank representedthe
internationalcommunityof lendersand donors who participated. The need to
give prudentmanagementto these funds,togetherwith the largecontributions
by Pakistan,for a construction program of unprecedentedmagnitudeand com-
plicatedby the Tarbela remedial/repair program resultedin very broad and
deep involvementby the Bank, beyond fund managementinto projectmanagement,
administration,technicalanalysisand technicaldecisions.


The main objectivesof the TarbelaDam Projectwere to providereg-

ulated water supplies for irrigationuse, provide substantialsupplies of
hydroelectricpower,and give a measureof flood controlby storingsnowmelt
and monsoon flows of the Indus River. All of these were to be accomplished
by constructingthe TarbelaDam and relatedhydroelectric civil works. Power
generationequipmentwas to be procuredand irstalledusing non-TDFfinance.


Constructionof the principalelementsof the TarbelaDam Project

began in 1968 and proceededon schedule. Constructionwas under a single
civilworks contractwhich requiredthe contractorto completeall construc-
tion includingthe powerhousebuilding. Fillingof the reservoircommenced
in 1974. In August 1974, a series of problems developed,beginningwith
severedamage to Tunnels 1 and 2, which set in motion a remedial/repair
gram that extendedover the next ten years, ending in 1984. Some part of
this program fitted within the originalproject concept,which allowed for
some investmentsto be delayeduntil experiencewas gained from early opera-
tion of the project,but the major part of it was unexpected. For a period
during 1974/75,the project was threatenedwith even more seriousdamages,
the aversionof which was a major accomplishment. The total cost of the
project,includingthe remedialworks, rose from US$828 million to US$1.497


All phases of the remedial/repairprogramwere completedin 1984.

Future activitiescan be coitsideredto be routineoperationand maintenance.
Becauseo? the unprecedented size of many of the projectfacilities,the O&M
program will be very large dnd is the key to the long-termperformanceand
safetyof the project. Close attention,regularinspection,adequatefinan-
cial resourcesand national recognitionof the criticalnature of Tarbela
will clearly be required. GOP/WAPDAwere slow in developingthis program,
but it is comingtogether. The programought to be sufficientto sustainthe
physicaloutputsthat have been forecastin the PCR. Furthermore,the addi-
tionalwaters divertedfor surfaceirrigationshouldalso help to sustainor
accelerategroundwaterirrigationin the Indus Basin through recharge of
aquifers. This latter benefit, being additionalto irrigationbenefits
countedin the PCR, should offsetany decline in power benefitssignalledby
the currentdrop in energyprices.

Findingsand Lessons

Despite the long period and great demands of the remedial/repair

program,the profileof projectbenefitswas delayedby only one year and the
firstdecadeof Tarbela'shydro-poweroutputenjoyedunexpectedly high energy
prices,with the resultthat the project'seconomicrate of returnis estima-
ted in the PCR at 12.5%. This is within the limitsof the pre-projectesti-
mate (1967)that "...a reasonableconservativerange of rate of returnwould
be about 9-13 percent." This finding is indeed remarkablein view of the
many problemsof implementation, but the audit believesit is a reasonable
one. Power benefits,previouslyexpected to amount to one-quarterof the
total benefits, have risen to nearly one-half, principallythrough the
increasesncted in the value of energy,and currentlycontributeabout 30% of
the nation'selectricityoutput. The agriculturalbenefitscould have been
measuredquite differently,accordingto other analysesin the Bank, but the
likely directionof correctionsin this case would favor a higher, not a
lower return. Nevertheless,the possibilitythat these benefits could be
significantlygreater than revealed in the PCR deserves attention (PPAM,
paras.25-36),particularly for futureappraisalsof similarprojects.

Modellingstudies of the Indus Basin carried out within the Bank

re-confirm widely shared vie-s that certain changes in surface water
allocation policy in Pakistan--regarding the dispositionof incremental
irrigation water supplies--couldincrease the irrigation benefits of
Tarbela. Principally,these changes would require agreement among the
Provincialand FederalGovernmentsthat greater proportionsof such supplies
be directed towards areas overlying saline groundwater. This strategy,
coupled with necessary investments in drainage, could give rise to
considerablyhigher, Basin-widegains in productionand employment. The
benefitsto be derivedfrom breakingthe deadlockof competinginterestsin
water allocationwould rival the benefits of further major engineering
investmentsin developingwater supplies (PCR, para. 11.04 and PPAM, paras.
37-39),if these two courseswere consideredas alternatives.Naturally,the
two courseswould also be highlycomplementary.
- vi -

The originalfeasibilityanalysis for Tarbelawas part of a broad

sector planning study undertakenby Bank staff and consultantsto identify
investmentprioritiesin the water and power systems. Unfortunately,the
developmentof the institutionalcapacityto conductresearchand trainingin
Pakistanon water resourceengineeringand managementhas not been an impor-
tant area of Bank concern(PPAM,paras. 40-41).

The TDF, into which all financialresourceswere placed to form a

single fund with the Bank as Administrator,was clearly a useful device.
This fund and the earlier Indus Fund offer a successfulmodel of how to
cofinancegiant civil works, and such funds deserve to be employedagain if
similar circumstancesarise. Although the Bank carried out its various
responsibilitiesas Administratorrather well, its arrangementsinternally
for projectsupervision evolvedsomewhathaphazardly. The finalarrangement,
introducedsince 1980, of having a single responsibleproject officer who
preparedregularsupervision reportsinternally, as in any other project,was
clearly the preferableone. The responsibilities of such an officer need
careful considerationwhen outside firms are hired to do most of the
supervisionwork on behalfof the Bank as Administrator, as was the case with

The most criticalelement favoringthe project'ssuccess,however,

particularlythe successof the remedial/repair program,was the cooperation
and supportof all partiesinvolved: the international donor community,all
levelsof the Governmentof Pakistan(GOP) and the involvedagenciesof GOP,
the contractor,the project consultant,the other consultantand advisory
groups,and the Bank. The behaviorof these parties on the occasionof the
incidentsthat threatenedthe project in 1974 offers an exemplarymodel for
how to deal 'ith emergencysituationsfor large civil works. But the tone
for the joint responsewas set by GOP. Its consistentcommitmentto saving
the projectwas the key to the successachieved(PCR,paras. 11.02and 14.23,
and PPAM, para. 47).
- 1 -





Formulationand Design

1. Background. The partition of the Indian subcontinentin 1947

resulted in the border between India and Pakistan being drawn across the
Indus riversystem. Pakistanbecame the downstreamriparianon all the trib-
utaries, and the division of the waters became a major international
dispute. However,in 1952, both countriesacceptedoffers by the Bank to
assist in findinga settlement,and in 1954, the Bank put forwardproposals
for a settlementthat had the followingprincipalfeatures. The waters of
the three Western rivers, the Indus, the Jhelum and the Chenab,were to be
allocatedto Pakistan,and the waters of the three Easternrivers,the Ravi,
the Beas and the Sutlej, to India. The areas in Pakistan,hithertofed by
the Eastern rivers,would in future be fed by water to be transferredfrom
the Westernriversby means of a systemof replacement works.

2. In September 1960, India and Pakistan signed the Indus Waters

Treaty, in which it was agreed that India would have the sole use of the
waters of the Easternriversand would make a contribution
to the cost of the
replacementworks, while Pakistanwould have the use of the waters of the

3. This solutionof the dispute became feasibleas the resultof the

willingnessof a number of countriesand the Bank to provide substantial
financialassistanceto supplementIndia'spaymentdue under the terms of the
Indus Waters Treaty. Accordingly,the Indus Basin DevelopmentFund Agree-
ment, 1960, was executedsimultaneously with the signingof the IndusWaters
Treaty. This Agreementestablishedthe IBDF (or Indus Fund), wich commit-
ments from Australia,Canada, Germany, New Zealand, Pakistaa,the United
Kingdom,the United States,and the Bank to contributein grants ana loans
(including 62,060,000to be provided by India under the Indus Waters
Treaty),the equivalentat that time of US$895million. The Bank'scontribu-
tion was a loan of US$90 million,and it agreedto act as Administrator.

4. The systemof works originallyconsistedof the construction of two

large dams, one on the Jhelum River (Mangla)and another on the Indus River
(Tarbela),about400 miles of new link canals,threemajor and two minor bar-
rages,the remodellingof threeexistinglink canals,and a programof tube-
wells and drainage. At that time the total cost of the systemwas estimated
at US$848millionequivalent.
- 2 -

5. However, it soon became apparent the funds committedwould be

insufficient.Afterdiscussionsamong the Bank, the contributing governments
and Pakistan,a compromisewas reachedon a new financingplan for a reduced
system of works in which Mangla Dam, the barragesand the link canals would
be given priorityand the tubewellsand drainageworks would be omitted;any
funds remainingin the Indus Fund would be made availableto Pakistan to
financethe TarbelaDam on the Indus or anotherwater developmentproject,to
be agreed by the Bank and Pakistan after a study of the water and power
sector in the thenWest Pakistan.

6. A new financingplan involvingan additionalUS$315 million in

foreign exchange from the contributorswas arrangedto finance the entire
system of vrorksprovidedfor in the 1960Agreement. For its part, Pakistan
agreed to provide all future rupee requirementsof the Indus Fund. As
before, the financingplan providedthat any foreignexchangebalancewould
be availablefor the Tarbela Dam Project, or some other water development
project. These arrangementswere embodied in the Indus Basin Development
Fund (Supplemental)Agreement,1964.

7. The study providedfor in the Supplemental Agreement1964 was car-

ried out by several firms of consultingengineersand a group of Bank staff
directedby a then ExecutiveDirectorof the Bank, Mr. Pieter Lieftinck 1 /.
The study, issued in 1967, endorsed the high prioritygiven to the Tarbela
Dam Projectby Pakistanand confirmedthat the projectwas not only techni-
cally feasiblebut also economicallyjustifiedeither singlyor as part of a

8. TarbelaDevelopmentFund Agreement. Discussionssubsequentlytook

place to considerhow the balanceof the funds for Tarbelamight be provided
to supplementthe sum likely to be availablefor transferfrom the Indus
Fund, then estimatedat US$324million. In March 1968,agreementwas reached
in principleon the terms of the Tarbela DevelopmentFund Agreement. In
April 1968, ttheExecutiveDirectorsapproveda resolutionauthorizingthe
signatureon behalf of the Bank of the Tarbela DevelopmentFund Agreement
whereby,interalia, the Bank would becomeAdministratorof the TDF and would
make a loan of US$25million. In May 1968,this agreementhad been signedby
all the partiesand had come into force. In July 1968 the ExecutiveDirec-
tors approvedthe loan of US$25 million (Loan 548-PAK). The other parties
agreed to provideUS$149 million equivalent. Pakistanagreed to provideto
the TDF all rupeesrequiredto meet local currencycosts.

9. Tarbela Project. The Tarbela Dam was designed as an earth and

rockfilldam across the Indus River, about 40 miles northwestoi Islamabad.
The dam, 470 feet high and about 9,000 feet long at its crest, was to be
flanked by two auxiliarydams on the left bank. The dams were designedto
impound 11.1million acre feet (MAF) of water which would provide initially
9.3 MAF of live storage. Two spillwayswere providedat the left abutment,
with a capacitysufficientto handleover twice the largestflood on record.

1/ Study of the Water and Power Resourcesof West Pakistan,preparedby a

group of World Bank staff headed by P. Lieftinck,3 volumes,July 28,
- 3 -

10. Four tunnels,each 45 feet in diameterat the upstreamend, were to

be cut in the right abutmentto divertthe flow of the river during construc-
tion. Three of these tunnelswere intendedto serve as power intakes,each
to serve four generatingunits. The fourth tunnel was to serve as a per-
manent irrigationoutlet. The Tarbelapower plant was to have 12 generating
units of 175 megawatts(Mw) each, a total of 2,100 Mw. These units and
relatedequipmentwere to be financedseparatelyby Pakistan,with assistance
from Japan. Five-hundred-kvand 220-kv transmissionlines required to
transmitthe power generatedat Tarbelato the main load centerswere subse-
quently financedwith assistanceby Canada and China respectively. As a
departure from the original design, Pakistan added at its own cost two
tunnelsas au'ditional irrigationoutlets,one stub tunnel (notyet completed)
in the right bank and one tunnel with completeoutlet works in the left
bank. Considerable technicaldetailsof the designelementsare given in the

11. At the time of the establishment

of the TDF the projectwas estima-
ted to cost US$827.5millionequivalent,includingUS$492million in foreign
exchange. Its ERR was estimatedto lie in the range 9-13%.


12. After some initialdifficulties, the major civil engineeringworks

were constructedon schedule and by the middle of August 1974 the main
embankmentdam had been completed. Progress on the constructionof the
powerhouseand installation of the generatingplant,to be commissionedfrom
about the end of 1975,was also generallyon schedule. The impoundingof the
reservoirbegan in July 1974. Owing to the complexgeologicalnatureof the
foundations,it had been decided to test fill the reservoirslowly and, in
order to facilitateemergency"dumping"of the reservoir,should this prove
necessary,the inletgates to Tunnels 1 and 2, originallyintendedto operate
only as closuregates, were modifiedso that they could be both opened and
closedunder hydraulichead. Shortlyafter the fillingbegan,it was discov-
ered that the centergate of Tunnel 2 could not be fully closed. Then some
of the steel liner plates were ripped off one of the outlet passages of
Tunnel 3, whereupon,as a precautionarymeasure, all the outlet gates to
Tunnels3 and 4 were closed,and the reservoirbegan to fill at an increasing
rate. The next incidentwas a loud noise in the inlet area of Tunnel 2 fol-
lowing which water flowed at full bore through the tunnel accompaniedby
debris. The decisionwas then taken to dump the reservoirby openingall the
gates of the other tunnels. As the water level was drawn down it was
revealedthat the main damage consistedof the collapseof a sectionof Tun-
nel 2 in the inlet area and the cave-inof the abutmentabove the area of
collapse. There was considerablecavitationdamage in Tunnels 1 and 2 and,
as mentionedabove, the linerplates in Tunnel 3 outlet had been rippedoff.
A numberof sink holes were found in the upstreamblanket. Seepagethrough
the relief wells at the toe of the dam and through the right abutmentwas
more than had been expected. Damageof a less seriousnature was caused by
the turbulentflows of water in the outletarea downstreamof the dam.

13. When the accident occurred the GOP gave instructionsthat first
priorityshouldbe given to res zoringthe works in time for the next filling
of the reservoirand appointeda Cabinet Committeeon Tarbela to monitor
- 4 -

progress and resolve difficulties. The Bank arrangedfor one of its Vice
Presidentsto lead the work of the Bank, in its capacityas Administrator of
the Indus and TarbelaDevelopmentFunds, in the measuresnecessaryto restore
the situationfollowingthe mishaps during the first fillingof the reser-
voir. He visitedPakistanin October and December1974 and in February1975
to discuss the requiredprogram of remedialmeasures and to review action
required on potential problems. After each of these missions, Special
Reportsby the Administrator were sent to the partiesof the Indus Fund and
TarbelaDevelopmentFund Agreementsand oral reportswere made to the Execu-
tive Directors. As soon as the nature and extentof the damagewere known,a
programof repairworks was startedand the projectengineersalo0 prepareda
program of additionalworks designedto increasethe safety of the project
during the next filling. Good progresswas made with implementingthese pro-
grams, and all the work which had to be carried out before the reservoir
again began to fill in June 1975 was finishedin time. At that point, it
appearedthat some additionalremedialworks costingUS$62.2millionwere all
that remainedto be completed. Hitherto,it had been possibleto meet the
costs of repairand remedialworks from resourcesremainingin the TDF, pend-
ing the completionof final project works; these resourcesnow had to be
replacedto permitfinal completionof the project.

14. The 1975 revisedestimateof the total cost of the project,includ-

ing the cost of the aforementionedrepairsand additionalworks, was US$1.02
billion,of which US$568millionwas foreignexchange. The amount available
in the TDF, includingthe balance of the Indus Fund, was expectedto fall
short of this foreignexchangerequirementby aroundUS$50 million,although
therewas considerable uncertaintyas to the precisedeficitamount.

15. As soon as a reasonablyfirm cost estimatewas available,the Bank,

in its capacityas Administrator of the Indus and TarbelaDevelopmentFunds,
approachedthe countrieswhich had previouslycontributedto these funds. As
a resultof this approach,five countries,namely,Australia,Germany,Italy,
the United Kingdom and the United States,indicatedthat they were prepared
to make special (additional)contributions, and IDA contributeda credit of
US$8.0million (Credit581-PAK). The FederalRepublicof Germany and Canada
providedassistanceunder specialarrangements. In this manner,the TDF was
supplementedin 1975 with US$44.6million equivalent,and Pakistanfaced the
additionalrupeecosts and the obligationstill (underthe 1968 Agreement)to
provideany additionalfunds to completethe project.

16. Unfortunately,new difficultiescame to light shortly after the

project facilitieswere brought into operationin mid-1975,and these were
followedby furtherincidentsin 1976 and 1977. These mainly concerneddam-
ages to No. 3 stillingbasin, sink holes in the upstream face of the main
embankmentdam, erosionof the servicespillwayplungepool, and a threatto
the foundationof the servicespillwayflip bucket.

17. By 1978,the total cost of the projecthad been revisedupwardsto

US$1.274 billion, requiringfurther replenishmentof TDF. The additional
foreign exchange required was estimatedat around US$150 million and the
additionalrupee costs at over Rs 1 billion. This led to the (Second
Supplemental)Agreement, 1978, under which further contributionsto TDF
- 5 -

amountingto US$79million were receivedfrom Canada,the FederalRepublicof

Germany,Italy, the United Kingdom,and IDA (US$35 million,Credit 771-PAK).
In addition,the EEC provided US$14 million, Kuwait US$18 million, Saudi
ArabiaUS$60 tillion,and Abu DhabiUS$25 million.

18. From an operationalpoint of view the project was substantially

completedby 1978. Irrigationwater had been availablefor some time, and
power generationhad begun in May 1977. Yet the completiondate kept slip-
ping. The auxiliaryspillwayplungepool had also experienced erosion,whic'.
required work until June 1982, and remedial/repair expenditureson both
plunge pools alone are estimatedto have reachedapproximately
(PCR,para. 7.03).

19. Total project costs at completion are estimated at US$1.497

billion, or 181% of the original estimate. The cost overrun of US$669
million arose largelyfrom the need for a remedial/repairprogram following
the damagesthat began in 1974. The proximatecausesof the main damagesare
discussedin the PCR: materialfailureof the floor slab of stillingbasin
No. 3; loss of bearing rails belongingto the upstream control gates of
Tunnels 1 and 2 because fixing bolts had not been tack welded; and
unanticipated,uneven and early erosion of the plunge pools' sides and
outlets (para.7.04). The PCR's accountof the primarylessonslearnedcan
be summarizedas follows:"the problems for the most part were exceptional
and unforeseeableat the then existing level of knowledgeand experi3nce"
(para. 7.04) and "in retrospect,the full, potentiallydamaging,effect of
the large quantitiesand high velocitiesof water on structureson such
complex and adverse geology had not been fully appreciated"(para. 14.14).
As explainedin the Preface,the audit has not attemptedto examine these


20. The two primaryindicatorsof projectimpact cited in the PCR are

water releasedfrom Tarbelareservoirfor irrigationand electricpowergene-
rated. Over the period 1975/76 to 1982/83,the average quantityof water
releasedannuallyfor irrigationwas 9.01 MAF. The gross value of agricul-
tural productionestimatedto have resulted therefromwas Rs 1.732 billion
per annum at borderprices. Over the period 1976/77to 1982/83,the average
quantityof power generatedannuallywas 3.1 billionkwh; with the addition
of units 5-8 in 1982/83,output in that year reached5.2 billionkwh, valued
at Rs 6.9 billion at border prices(PCi, para. 9.02, and Annex 6, Table 4).
Ten power units had been installedby 1985, when electricityoutput reached
7.9 billionkwh. The PCK estimatesthe overallERR at 12.5%.

21. Unfortunately,the methodof relatingTarbela'simpactto the easily

identifiedwater releasesfrom,and powergeneratedat, Tarbelais not neces-
sarily as straightforward as it might appear, particularlyin the case of
agriculturalimpact,becauseof physicalexternalities and the integration
Tarbela operationswith those of other Indus Basin water storageand diver-
sion operations. This difficultyis exploredbelow in Part II in the course
of reviewingthe whole issue of economicevaluation. The same difficulty
- 6 -

affectsalso the gaugingof impactsustainability, as it is possiblethat the

above-mentionedbenefitsare not consistentwith groundwateraquiferequili-
brium. Notwithstanding this possibilityand the expectedeffects of reser-
voir siltationon reducingwater releasesover time (PCR, para. 8.08), the
questionof impactsustainability hingesprincipallyon maintenance.The PCR
gives good reasons for expecting that Tarbela maintenanceshould sustain
projectbenefitssatisfactorily (PCR,paras. 9.04-9.08).

22. One of the negativebyproductsof the huge remedial/repair

of immediateconsequencefor projectimpact,has been the diversionof funds
from other programs,particularlyfrom downstreamand basin-wideinvestments
in irrigationand drainageworksas well as from water management,extension,
and other agricultural services(PCR,para. 2.07).

23. The direct impact of Tarbelaon emergingdrainageproblemsin the

Indus Basinhas been difficultto assess . Even before Tarbelathe greatly
increasedcontinuoususe of Indus water for irrigation(from storage or
direct river diversions)for over a century (up to about 1960) had signifi-
cantly altered the hydrologicalbalance of the Basin. Seepagelosses from
irrigationcanals,distributaries, minors,and watercoursesand deep percola-
tions from the irrigatedlands had resultedin a gradualupwardmovementof
the groundwatertable,bringingwith it criticalproblemsof waterlogging and
salinityover a vast area. Waterloggingis widespreadthroughoutPunjaband
Sind provinces,where most of the country'sfood and fiber crops are pro-
duced. In the early 1900s,the watertablewas generallymore than 15 meters
(m) below the surfacethroughoutthe Indus Plain. However,by 1978 (when the
Indus Basin Salinity Survey was completed),the watertablein 22% of the
Indus Basinwas within 1.8 m of the surface,and in an additional30% within
3 m. A comprehensive surveyconductedin 1961estimatedthat about 40,000ba
of land were being lost annuallyto agriculturalproductiondue to waterlogg-
ing and/or salinity. Althoughthese estimateshave not been updated,avail-
able informationsuggeststhat land abandonmentin severelywaterloggedareas
is continuing. Operation of the Tarbela reservoiris believed to have
furtheraggravatedthese conditions.Nevertheless,certainstudiesdiscussed
below (para.28) estimatethat Tarbela'snet impacton groundwaterlevelshas
been favorablebecause it has also helped to replenishgroundwaterdepleted
by extens'veprivatetubewelldevelopment.

24. In the early 1960s,to relievePakistan'swaterloggingand salinity

problems,GOP initiateda seriesof salinitycontroland reclamation projects
(SCARP)with public tubewell(TW) installationfor drainageand supplemental
irrigationin usable fresh groundwater(FGW) areas. By 1984, about 12,000
such TWs had been installed,with approximately90% of them in Punjab, and
most of the remainderin Sind. 'TheSCARP experiencehas demonstratedthat
TWs provide significantdrainage relief when properly designed and effi-
ciently operated. However,because of managementand financingproblems
associatedwith TW operations,along with the rapid growth of private tube-
well investmentin these FGW areas, GOP and Bank policynow call for private
developmentonly in these areas. Most of these problemswere anticipatedin
the LieftinckReport,which recognizedthat many complementary investmentsin
- 7 -

drainage and other activities would be required to effectivelyutilize

Tarbela'sstoragewaters. Currently,the principalneed is to address the
drainage problem in saline groundwater(SGW) areas. The Bank is assisting
Pakistanin implementingseveraldrainageand tubewellprojectsto alleviate
the waterloggingand salinityproblem. These projectsinclude: Khairpur
(Cr. 678-PAK);SCARP VI (Cr. 754-PAK);SCARP Mardan (Cr. 877-PAK);Fourth
Drainage (Cr. 1375-PAK); and the Left Bank Outfall Drain (LBOD) (Cr.


A. EconomicEvaluation

25. The PCR's economicevaluationof Tarbelagives a favorablereesti-

mated ERA of 12.5%. It attributesapproximatelythree quartersof project
benefitsto power and the remainderto agriculture,which is the reverseof
the proportionsbetween power and agriculturalbenefits as estimated ex
ante. The principalreasonfor this reversalin benefitproportionswas the
unexpectedlyhigh energy(oil) prices enjoyedby the projectduring its first
decade of operation. Since preparationof the PCR, however,energy prices
have fallen,and power output beyond the first decade of the project'slife
has diminishedin value relativeto the estimatemade in the PCR. Yet the
more problematicaspect of the economic evaluationlies not with power but
with the agricultural side of Tarbela. Other work (involvingthe Indus Basin
Model) carriedout in the Bank on developinga more comprehensive conceptual
framework for evaluating water resource investments- in particular,
Tarbela'sirrigationbenefits- claims a sipnificantly greateragricultural
benefit than that identifiedin the PCR.L/ Because the likely needed
adjustmentsto power and agriculturalbenefitslargely offset one another,
the auditdoes not see cause to revisethe projectERR.

26. Power. The PCR's pricingof hydroelectric power benefits,as with

other benefitsand costs,was based on the Bank's commodityprice forecasts
of July 1982. The recentsharp downwardtrend in oil prices leaves such an
evaluationsomewhatexposed;the Bank'sApril 1986 forecastof futurepetro-
leum prices is about 60% lower than that made in July 1982. But even with
this drasticrevisionand an updatingof actualpricesbetween1983 and 1986,
the projectERR would drop only to 10.2%,indicatingthat such changesstill
leave the projecteconomically viable. It also confirmsthe PCR's judgments
about the relativeinsensitivity of project ERR to such price risks (PCR,
para. 12.06).3/ Furthermore,the risk that the PCR has overstatedpower

2/ John H. Duloy and Gerald T. O'Mara, "Issues of Efficiency and

Interdependencein Water ResourceInvestments: Lessons from the Indus
Basin of Pakistan",World Bank Staff Working Papers, Number 665,

3/ This result also confirms,incidently,that the economicviabilityof

the Tarbelaprojectwas preserved,in the face of large cost overruns,
largely by the unexpectedlyhigh energy prices rulingduring the first
decadeof its operation.
- 8-

unit values it offset to some extent by its having understatedthe likely

quantitiesof power output. For the PCR chose not to take into account the
net benefitsof power developmentssubsequentto Unit 10 on Tunnel No. 2:
namely, power Units 11, 12, 13 and 14 proposed for installationon Tunnel
No. 3 beginningin 1989,and the furtherpower units under study for instal-
lation on TunnelNo. 4. These additionswould raise the rated capacityof
power installations from the 1,750Mv coveredby the PCR to over 2,800Mw in
the firstinstance,and possiblyto beyond 3,800Mw. The audit is reluctant
to explore the impactof these additions--especiallythe later ones--inany
detail, because it does not have the necessary information. Some rough
calculationssuggest, however, that these late additionsto power output
would not have any substantialimpacton the overallprojectERR.

27. Note in passingthat the PCR and PPAM use a least cost alternative
(economic) approach to valuing electric power, rather than a revenue
(financial)approach;both methodologieshave been used on Bank power pro-
jects. The least cost alternativeapproach is defensibleif there is an
adequate,sustainedmarket demand for the product produced,a requirement
which is amply m,htin the case of Tarbela'spower. But there are also
pragmaticreasons for using this approachexclusivelyfor Tarbela. First,
the comparisonand aggregationof power and irrigationbenefits demand
reasonablyconformablemeasuresof them, preferablyeconomicones. Second,
the TDF financed neither power generationequipmentnor irrigationcanal
works, and the various loan and credit agreements contain no specific
covenantson cost recovery;in consequence,the PCR providesno information
on Tarbela-generatedfinancialrevenuesfrom either poweror irrigation.

28. Irrigation. Beginninigin 1975, the Bank became involvedin manag-

ing a UNDP-fundedstudy of water resourceplanningfor the Indus Basin. As
part of this effort, WAPDA collectedbasic data from 2,000 farms over the
period 1976/77 and provided and analyzed hydrologic and other physical
resourcedata on irrigationoperationsin the basin. A resultingpublication
by Duloy and O'Mara, which examines the conjunctiveuses of surface and
groundwatersfor irrigation,concludesthat

rigorousappraisalof water resourceinvestmentswith significant

environmentalimpact should be done with referenceto cases for
which the environmentalimpacthas been taken into account. For
the exampleof TarbelaDam, neglectof environmentalimpacts,which
are favorable,leads to an understatementof incrementalbenefits
by 38 percent at domestic prices and 59 percent at economic

This observationis extremelyrelevant because the PCR has evaluatedthe

agriculturalimpact of Tarbela as if there are no importantenvironmental
impacts(externalities)to be considered.

4/ Duloy and O'Mara,op cit, p.vi.

29. Instead, the PCR identifies a discrete part of the Indus
Basin-that pertainingto 10 Tarbela command canals 5 /--as being the only
part of the basin subject to Tarbela influenceor of relevancefor the
evaluation. It first establishes a statistical relationship between
historicalrabi6 / cropped area in this part of the basin and historical
quantitiesof canal and (separately)tubewell water deliveredtherein for
irrigation. It then uses the estimatedparameterassociatedwith canalwater
to predict what cropped area changes would likely be associatedwith the
irrigationwater releasesfrom Tarbela. It derivesthe incrementalbenefits
of this predicted change in area cropped by applying a particular
(bullock-based) technologyfor producingcrops (using wheat as a proxy for
all crops). This analysisconformswith most bank attemptsto evaluatemajor
water resourcedevelopments,insofar as it does not attempt to deal with

30. In contrast,the analysisby Duloy and O'Mara (hereinafterDOM),

which insistson accommodatingTarbela's"environmentalimpact",attemptsto
evaluatethe impactof Tarbela on the behaviorand managementof irrigation
water resourcesin the whole basin and hence on agriculturalactivities
basin-wide. Hence,DOM argue that:

(a) water releasesat Tarbelafor irrigationhave an influenceon water

releases or diversionsfor irrigationat other structuralcontrol
pointsin the basin, not only duringrabi, but duringother seasons
as well;

(b) groundwateruse, both within the gravity command of Tarbela and

throughoutthe rest of the basin, is heavilyinfluencedby releasing
surfacewater into hundredsof miles of leakycanalsand by percola-
tion from other watercoursesand irrigatedfields, giving rise to
other benefitsand costs.

In addition,DOM argue that:

(c) the evaluationof the contributionof any structuralcontrolpoint

must accountfor whetheror not the groundwaterresourcesare being
managed in hydrologicbalance;and

5/ To forestallany belated confusion as to the scope of the Tarbela

project,recallthat it comprisedonly the dam and immediatelyadjacent
works. It did not extend to any investmentsin canal distribution
systems. The 10 so-called Tarbela command canals were already in

6/ A term for the wintergrowingreason: October15 to April 15.

7/ The Region has essentiallyconfirmedthis observationby pointingout

that it consultedcloselywith the Bank's OperationalPolicy Staff in
the course of determining the PCR's method of valuing Tarbela's
- 10 -

(d) the evaluationshouldattributeto Tarbelaany rents to other long-

term investments,e.g., in tractortechnology,that are stimulated
by the increasedavailabilityof canal and groundwater.

Taking account of these four argumentsdemands much more information,of

course, than is requiredby the PCR's evaluation,and the adequacyof such
informationhas been a point of much dispute for critics of the DOM
analysis. Nevertheless,the audit believes that these arguments offer
significantimprovements to the conceptualframeworkof evaluation. There is
also the promise of other improvements. For example, the DOM analysis
examines the likely effects on the Tarbela evaluation of introducing
radicallydifferentpolicies regardingdistributionof incrementalsupplies
of surfacewater within the Indus Basin (discussedbelow in paras. 37-39).
But the four arguments (a) through (d) are certainly relevant to an
evaluation of Tarbela under management policies pursued so far. Some
comparisonbetweenthe PCR and DOM estimatesought then to be instructive.
Becausethe DOM analysesdo not handle projectpublic costs and consequently
do not give rise to internalratesof return,the direct comparisonhas to be
limited to estimated incremental irrigation benefits of Tarbela, with
farmgatepricesat domesticpricesbut with evaluationat borderprices.

31. After growingrapidlybetween1976and 1979,the PCR'sestimatesof

agriculturalvalue-addedduringthe 18-yearperiod 1980-1997stabilizein the
range Rs 1.484 billion to Rs 1.921 billion measured in mid-FY83 currency
values; their average over this 18-yearperiod is Rs 1.701billion. After
peaking in 1995-97, the estimatesdecline under the lagged influenceof
decliningirrigationreleasescausedby siltationof the Tarbelareservoir.
In comparison,the DOM estimate of long-runvalue-added,allowing for the
effect of complementaryfarm investments(but not the impositionof ground-
water balance), is Rs 1.577 billion annually.8/ The DOM estimate with
groundwaterbalanceimposedis much higher--Rs3.828 billion--indicatingthat
the effectof Tarbelaon the Basinaquiferhas been stabilizing.

32. Because a groundwaterbalance of some kind is inevitablein the

long run, the audit favors the higher value-addedestimateof DOM, which is
2.25 times the averageestimate(for 1980-97)quoted for the PCR. Were the
PCR estimatesof agricultural value added for the entire projectperiod(PCR
Annex 6, Table 4 - agriculturalproductionless agricultural costs)increased
by such a factor of 2.25 and power benefits adjusted only for the lower
energy prices noted in para. 26, the project ERR would be 12.6%, and the
ratio of power benefitsto agriculturalbenefitswould be about 1:1.1.

8/ This figure is based on the entry Rs 885.8million,for the difference

D-C in Table 11 of Duloy and O'Mara,op. cit., which is measuredin 1977
rupees. The Rs 885.8 million has been re-expressedabove in mid-FY83
rupees. For those who are unfamiliarwith the term "groundwater
balance," it reans that the groundwaterresource experiencesno net
additionsor withdrawalson average....in short,that the levelof water
table is stabilized.
- 11 -

33. Commentsfrom the Regionalstaff of the Bank indicatethat they do

not share this willingnessto defer fully to the DOM estimates. Although
they have sincemade considerableeffortsto adopt the DOM model to assist in
some of their recent operational work, they still have many serious
reservationsabout its utility, unless the model and its assumptionsare
adapted (further) for project area specifiL conditions. They are
particularlyconcernedabout lack of informationon groundwaterrecharge
rates with and without Tarbela,and the many specificassumptionsand data
input needed to reliablysupport the DOM computeranalysis. They point out
that others in the Bank also shared their reservationsabout DOM's original

34. The Borrower'scommentsin the Appendixincludea numberof other

observationson project benefits:the possibilitiesthat a more mechanized
farm technology(than that posited in the PCR) would be more appropriate,
that the PCR's wheat yields and wheat prices have been underestimated,and
that fisheriesbenefitsought to be added. The DOM analysisalreadyincorpo-
rates the benefitsof complementary farm investmentsin mechanization. It
has not been possiblefor the audit to adjust the (DOM) findingsfor any
recentdevelopmentsin wheat yields or prices. Regardingwheat yields,how-
ever, the Borroweris placingtoo much emphasison the wheat yieldsof what
appearto be progressivefarmerswho make up only a small proportionof wheat
growers. Regardingwheat prices, the PCR assumed import-parityprices
through 1984-85 and a linear transitionto export-parityprices through
1990. The Borrower has suggestedthe use of import-parity prices through
1990. The audit believesthe PCR assumptionsto be a more accuratereflec-
tion of trendsin Pakistan'swheat production.Fisherybenefits,believedto
be relativelysmall,have not been quantified.

35. Summing up. Two points arise out of the foregoingcomments.

First, the PCR evaluationhas likelyunderestimatedthe agriculturalbenefits
of Tarbela and likely overestimatedits power benefits,but with little
effect on its ERR estimate. Consequently,the audit acceptsthe PCR's 12.5%
ERR estimateas a fairlysafe one.

36. Second,and more important,the PCR evaluationreflectsa decidedly

differentlevel of effort for an ex post economicanalysiscomparedwith what
would be expectedfor an ex ante analysis. While such a stateof affairsis
a common,acceptableeconomy for most projects,a more symmetricallevelof
effortought to be justified,as a matter of policy, for giant projects. A
thoroughex post economic evaluationof projects like Tarbela ought to be
seen as a necessarycompanionto the feasibilitystudy of any subsequent
giant projectin the same basin in which the Bank has an interest,such as,
for instance,KalabaghDam. Such an evaluationwould provide,in a low risk
setting,a detailedappreciationof the issues to be addressed,as well as
the appropriateframeworkfor evaluatingminor projectsin the same basin.

9/ The Region notes that some of its main concernswith the operational
usefulnessof the DOM model are outlinedin a memo from the agricultural
Divisionconcernedto Duloy,dated 12/2/82. It notes furtherthat OED
raised similar concerns in a Study Audit Memorandum,dated 6/5/85,
addressedto the Bank's ResearchAdministrator, Economicsand Research
- 12 -

Actually,South Asia ProjectsDepartmenthas worked closelywith Duloy and

O'Mara and is currentlymaking a major effort to modify the DOM model for
applicationin some of its operationalwork, such as evaluatingthe agricul-
tural impactof Kalabagh. The Region did not use the model in the Tarbela
PCR because of its reservationsnoted previouslyin para. 33, and becauseof
the timingof the two analyses. At the time of preparingthe PCR, the Region
felt that the DOM was still too much in the developmentalstage. Neverthe-
less, one shouldnot be too surprisedat findinganalyticalshortcutsin PCR
evaluations,given the Bank's staff and other resource constraintsfor
executingPCRs. The Bank should reexamineits expectationsfor completion
reportsin the case of major, strategicprojects,as a matterof policy.

B. IrrigationWater Allocation

37. A major constrainton Tarbela'sagriculturalimpact has been the

administered natureof Indus Basinsurfacewater allocations among Pakistan's
Provinces,the uncertaintyas to "final" allocationsof additionsto this
resource,and the uncertainties this has generatedin the minds of Provincial
Governmentsand farmersfor their irrigationinvestmentdecisions. This has
been a long standingproblem for Pakistan,as are similaraspects of water
allocationfor virtuallyall countries. The issue is that agricultural
benefitsof Tarbela could be increasedconsiderablyif water suppliesthat
are surplus to historicalwater rights could be allocatedaccording to
regionalmarketdemand (givenenablingdrainageinvestmentsin salineground-
water areas), rather than accordingto statute. Attentionto this policy
aspect of water developmentimpact in Pakistanis of much more consequence
than recognizingonly the size of projectimpactunder existingconstraints.

38. Currently,under post-Tarbelaconditions,only limited gains in

productionare possible from increasingcanal water deliveriesto saline
groundwater(SGW)areas in the Indus Basin becauseof the need of theseareas
for large investmentsin drainage. Given this drainage,farmersin SGW areas
can generallymake better use of additionalwater than can farmersin fresh
groundwaterareas. One factor contributingto high productivityin the SGW
areas of Sind Province,for instance,is their comparativeadvantagein rice
production. The DOM analysesestimatethat givinggreaterfavorto SGW areas
in water allocationcould increase agriculturalvalue added in the Basin
(relativeto actualpost-Tarbela conditions) by some 17% to 20%, and increase
employmentby some 14. to 16%.10/

39. It is particularlyimportantfor the Bank, or external agencies

generally,to addresssuch sensitiveissues as this one on water allocation,
wheneversuch agencieshave the confidenceof Government. Internalagencies
need policy guidance even to begin the analysis. Hence, it was highly
commendableof the UNDP and the Bank to participatewith WAPDA in carrying

10/ Gerald T. O'Mara and John R. Liloy, "Modelling Efficient Water

Allocationin a ConjunctiveUse Regime: The Indus Basin of Pakistan,"
Water ResourcesResearch,Vol. 20, No. 11, November1984. Note that the
Borrowerhas listeda number of reservationsabout this aspect of the
DOM analyses(Appendix,para.5).
- 13 -

out the kind of study which gave rise to the DOM and like analysesdealing
with Tarbela'simpact on agriculture. Its results, notwithstanding their
controversialnature,are suggestivethat changesin water allocationpolicy
would be highlycomplementarywith furtherengineeringinvestments in irriga-
tion water supply. Devisingdesirablepolicy changes that are politically
acceptableis a notablechallenge. The inventionof such optionsdeservesat
least as much feasibilitystudy as post-Tarbelainvestmentsin development
hardware.1 !/

C. Water ResourcePlanning

40. The water allocationproblem just reviewed is part of the wider

problem of water developmentplanning that was addressedin the Lieftinck
study (PPAM para. 7). That study was undertakento identify investment
prioritiesamong the various componentsof the water and power system.
Recognizing the high degree of interdependenceamong the different
development and investmentdecisions, the study attempted carefully to
examine all aspectsof agriculture,includingground and surfacewater, and
the energy sector. It was concernedabout waterloggingand salinity,the
need to integrateground and surface water development,and the need to
integratethe planningand operationof hydro- and other power development.
Althoughthe study put forth the constructionof Tarbelaas the centerpiece
of its proposed program, emphasizingthat its completionby 1975/76 was
crucial to the overall program, there was equal zoncernfor the program's
other pieces. Taken together,they representeda major exercisein sector

41. The followingassessmentof this overallplanningeffort has been

taken from OED's recentbroad reviewof the Bank'srelationshipwith Pakistan
over the period 1960 to 1984, which offers additional,wider insightsinto
the Tarbela experience. While the planningeffort receiveshigh praise as
"stateof the art", detailedand innovative,the assessmentis not too san-
guine about the outcomeof such effortswhen they are dominatedby external
teams,as was the case with this study:

"Participationby the Bank in the Indus Basin DevelopmentProject,

and in subsequentsupportfor water resourcedevelopment--including
irrigation,drainageand salinitycontrol--hasbeen fundamentalto
the relativelygood performanceof Pakistanagriculture."

"But neither the engineeringsuccessnor the economicperformance

of Tarbela representa strong vote of confidencein the water
resource planningprocess. The project was plaguedby unantici-
pated engineeringproblemsand large cost overruns. The acceptable
rate of returnachievedby the project,in spiteof thesedeficien-
cies, appears to be more a reflectionof the unanticipatedin-
creases in energy prices during the 1970s than a testimonyto the

11/ The Region comments that it has used various forums of high level
discussion in the past to induce GOP to address this issue, and that it
intends to continue its efforts.
- 14 -

skill or precisionof the planningprocess. In retrospect,it is

clear that the politicalcommitmentsmade in connectionwith set-
tlementof the Indus Basin disputesbetweenIndia and Pakistanhave
tendedto dominateengineering and economicconsiderations."

"The Indus Basin is one nf the world's great centersof irrigated

agriculture.The realizatio.: of its productionpotentialhas, how-
ever, been inhibitedby the difficultyof arrivingat a technical
and institutionally viable systemfor controlling waterloggingand
salinity. Much efforthas been spent over the past severaldecades
by the Government,the U.S. assistanceagency,and the World Bank
to find acceptablemethods for dealingwith these problems. After
two decadesof controversyand delay, and many studies,there now
appearsto be substantialagreementbetweenthe Governmentand the
Bank on a strategy covering areas that are not saline: public
tubewellswould be graduallyphased out and replacedby privately
managed tubewells,plus there would be a programof improvedcanal
design and more efficienton-farm water management. It appears,
however,that no long-runprogramhas yet been agreed on for areas
with saline water. Nor is it clear that effectivearrangements
have been developedto replace the publicmanagementof the large
tubewellsby private management. As a general conclusion,very
large investmentwill be required over the next two decades to
maintainor er-iance agriculturalproductivityin the Indus Basin.
Unfortunately,the developmentof the institutionalcapacity to
conduct research and training in Pakistan on water resource
engineeringand managementhas not been an importantarea of Bank
concern. As a result, it is not at all clear that the viable
institutionalinnovationsnecessary to organize and manage "the
greater Indus Valley water machine" have yet been designed,let
alone implemented."

"The Bank's effectiveness...,depends on the nature of the

country's problems. The Bank can mobilize funds and it can
organizeexcellenttechnicalstudies,and it can, on the basis of
studies or experience,provide sound advice on a range of sub-
jects. When its rationaleconomicapproachis relevant,the Bank
can make a strongcontribution.When problemsare more involvedin
local, social, and politicalfactors,the Bank's contribution may
be less relevantand helpful. The fact that its presencein the
country is limited, that missions are brief and busy, and that
staff is frequentlyrotated,all tend to make stronginvolvementin
the local environmentdifficult. This in turn tends to keep Bank
advice at the level of principle and technique,in the common
languageof the international technician. While this approachhas
its advantagein keeping the Bank at arm's length, so to speak,
where staff may be able to developa more detachedview, it may be
a bar to the kind of deeper understandingwhich may be necessary
- 15 -

for effective assistance in some types of institutional


D. CofinancingThroughDevelopmentFunds

42. A large numberof countriesor entitiesjoinedPakistanin contrib-

uting resourcesto TDF so that the Baak as Administrator could more easily
superviseefficientprocurementand facilitatedisbursement on behalfof the
project. The TDF, and the IBDF before it, have providedample evidenceof
the efficacy of creating special developmentfunds to financegiant civil
works projects. The related arrangement--having the Bank serve as Admini-
stratorof such a fund--deservesto be reviewedby Bank'smanagementif it is
to be used again,to ensurethat the Bank'saccountabilityfor supervisionis
clearlydefinedand seen to be at least commensuratewith the accountability
establishedfor otherBazk-financed projects.

43. A surpriseto the audit was findingthat formalsupervision reports

with a format comparableto those produced for other projeets in the Bank
date only from August 29, 1980. Consequently, it is not readilydiscernible
how the lines of responsibility for Tarbela were drawn beyond South Asia
Region over the years, i.e. how the Bank shared its accountability inter-
nally, especiallyin the periodwhen therewas no emergency. Prior to August
1980, the only reportsof Bank supervisionmissionsfollowingthe 1974 first
fillingof the dam were those of the Bank as Administratorand thoseproduced
in the form of Back-to-officereportsnot widely circulated. Except for the
Special Reports by the Administratorissued between October 1974 and March
1976 followinghigh-levelBank missions,the Administrator'sreports were
generallydrafted by the Bank's consultants(Gibb) and finalizedby Bank
staff. The fact that these latterreportsdid not serve as an adequatesub-
stitutefor a full Bank supervisionreport is reflectedin the emergenceof
formal supervisionreportsin 1980 alongsidethe Administrator's reports.

44. Delegationof a large part of the Administrator's project super-

visionresponsibility for Tarbelato an engineeringconsultantand to a firm
of charteredaccountantsmade sense, given the size of the task, and the
intensive technical supervision which they provided has been highly
regarded. This still left some role for Bank staff, which grew enormously
during the early phase of remedial/repair,and it is this role and how it
might be organizedunder similarbut more normal circumstancesin the future
that deservesexamination.

45. The audit believesthat the Bank would have mdnaged its responsi-
bilitiesmore consistentlyhad it tried in other respectsto treat Tarbela
like any other projectwithin the Bank from the beginning,and designateda
project officerwho preparedregularinternalreportswhich were subject to
the same review as other supervisionreports. Granted that such reports

12/ World Bank in Pakistan: Review of a Relationship1960-84,OED Report

No. 6804, Volume 1 dated January 27, 1986. The paragraphsexcerpted
and No. 2.78 on
are, in sequence,Nos. 2.42, 2.44, 2.45 on irrigation,
- 16 -

would have been different--theAdministrator's Reports preparedby the con-

sultantcoveredmuch of the ground already,and had to be addressedto all
members of TDF--butat least such internal supervisionreports could have
focussedon the kinds of issues brought to the Bank by the consultantfor
decision. It seems to have been essentialfor the Bank to have at least one
technicalstaffmemberto reactwith its consultanton a full-timebasis. In
the absence of the kind of structuredinformationprovidedby the Bank's
normalsupervisionprocessfor most of the project'slife,it has been diffi-
cult for the audit to determinehow Bank staff sharedaccountability for the
Bank's responsibilities as Fund Administrator.

46. Note again that this "issue"arises from the unique characterof
the Bank's supervisionarrangementsup to 1980. The PCR complimentsthe
Bank'sperformance(paras.13.01-13.04), especiallyits role duringthe early
phase of remedial/repair (when many outstandingBank staff were conscript8
to work on Tarbela),and the audit has found no evidencethat would dispute
these compliments. But there is clearly a procedurallesson here for the
Bank in case it againacts as Administratorof a specialfund.

E. Prioritiesin ProjectEmergencies

47. What stands out above all else in the Tarbelasaga is the way the
responsiblepartiesextricatedthe projectfrom the threatof even more seri-
ous damagesthan it sustainedin the 1974 tunnel collapseand in subsequent
difficulties.The PCR notes that

(a) the Borrower (GOP), which implementedthe project throughWAPDA,

gave the projecthigh priority(PCR,para. 11.02);and

(b) it was clearlyimportantthat when the great emergencyof the tun-

nel failure occurred in 1974, attentionwas forussed on repair
ratherthan on assessingblame (PCR,para. 13.04).

The disciplinedbehaviorobservedby GOP in establishingthe right climate

withinwhich the other partiescould respondto this emergencywas by far the
most significantcontributiontoward getting the prioritiesright. GOP
quicklyestablished a specialCabinetCommitteeto provideinstitutional sup-
port and quick decisionsat the highestlevel,but it also sustainedthe pri-
orities in favor of repair and completionover a long period. A measure of
the strainimposedon GOP followingthe emergencycan be gaugedfrom the fact
that local currencyexpenditures on the proiectfrom 1975 until 1982 totalled
US$269millionequivalent,comparedwith US$384millionequivalentbeforehand
(PCR, para. 10.06). The project was also continuingto absorbafter 1974 a
significantshareof availableforeignaid and goodwill. Much of these post-
1974 expenditures was unexpected,and many othergovernmentactivitieshad to
be sacrificedfor a whole decade to bring the project to completion. This
disciplinedcommitmentto the project, together with the prioritiesfor
repairratherthan blame,must rank as an outstandingpoliticaland technical
achievementand a model for how borrowersand financiersshould respondto
emergencysituationsin large civilworks.
- 17 -

Water And PowerDevelopmentAuthority

Teephosol_ 212825 Dams & Coord. Dltision

___ _30/_30_5_ D$ June lb,1986

Mr Otto Maiss
Acting Director
Operations Evaluation Department
1818 H Street, N.W.
Washington, D.C. 20433

Project Performance Audit Report

-fki*'tan: Far ea Dam Poje00
(LoanAi4 S . and Credits 581- and
771-PAIKL -

I am directed to refer to your letter dated

April 9, 1986 on the subject matter and to enclose a
oopy of WAPDA Comments on the draft of Project Per-
formance Audit Memorandum for your further appropriate

General Manager
Dams and Coordination

Encls-as above
cc: Ministry of Water & Power, Government of
Pakistan, Islamabad w/enl
Attention: Mr Navaid All Nasri
Joint Secretary (W)
with reference to Telex
Message No.UA-8(257)/86
dated June 3, 1986 N
Nl "S

bG~~~L IT

- 19 - ,Appendix



.The PCR economic evaluation of Tarbela Dam gives Economic

'Rateof Return (ERR) of 12.5%. The study has attributed 75%
Benefits to power and remaining to water as a result of crop
production. As pointed out in the project performance audit
report the rate of return can be improved by increasing the
incremental benefits by 59% due to environmental impact. Furthecrmc,e.
we have some observations which, if adopted,,could further improve
*tJ,einternal economic rate of return (IERR).


* .Theultimate yields of wheat have been projected at 3 tons

per hectare in 1994-95. A recent short survey undertaken by (P&I)
WApda in Sahiwal and Faisalabad districts has revealed that progre-
ssive farmers are achieving yields in the range of 3 to 4 tons per
li,ctare,which indicates that the projected yield of 3 tons per
hectare is on the lower side in view of multiplier impact of
improve,1 technological pattern by majority of farmers.


The economic price of wheat is based on the assumption that

wheat would be a net export commodity from 1984 onward. Ilowever,
Pakistan has not yet emerged as a net exporter of wheat. We view
that Pakistan would not be able to become a net exporter of wheat
till 1990, considering population growth rate of more than 3% and
immense need of buffer stocks from security point of view. It -isapprc-
prtate thereforetocompute economic prices of wheat on the basis of
import commodity upto 1990. Import parity price for 1982-83
according to our calculations was in the range of Rs.2700/Ton.
We therefore, feel that the prices of wheat may be adjusted upward
accordingly which will also lead to greater value of production
and consequently IERR.
- 20 -

The analysis by PCR has been based on Bullock Technology.

We agree with the co-offlotents used In the analysis, however,
the techrology1has changed. A recent survey by f&I shows that
ioo farmers are using threshers. Use of Tractor is now
prevAillng In preparatory tillage almost all over in Fresh ground-
water areas, whil, nearly.50% farmers are using tractor in saline

.ar,as for Land preparation. Thus the adoption of improved

toehnology may also result in higher returns.


.. The benefits from fisheriesdevelopment in the dam lake have

not been Included In the benefit stream. A realistic estimate of
benefits should be included.
5.v The report under review has pointed out by referring to the

DOM'analysis7that given the drainage, and preference to SGW areas

in water allocation, the value added in the basin could increase
by some 17 to 20% and employment by some i4 to 16%.' However,
the assumptions and input data on which this observation is based
are not given In thexr paper. In order to make meaningful comments
on this statement, a copy of the print out of the Model along with
input data and assumption is needed. There are, however, some
general observations in favour of FGW areas viz-a-viz SGW areas
and are detailed as under :-
a/ It is generally observed that in certain areas of
saline water zone, the Drainage costs are exorbitantly
high and it is considered economically unviable to
make any investments in such areas. Therefore, the
question of water allocation to such areas is

1/ Gerald T.O'Mara and John H. Duloy, NModelling Efficient

waler Allocation in a Conjunctive Use Regime: The Indus
Basin of Pakistan", Water Resources Research, Vol.20 No.11,
November, 1984.
-21 - Apendix
b/ Pumping of water In fresh groundwater areas will
necessitate the reeharge of such areas by supplying
additional canal water.
c/ Comparative advar.tage in the production of rice in
SGW area has been argued in the report. It way be
pointed- out that most of the SGW areas are suitable
for production of coarse rice, whose comparative
price is very low.
d/ In saline groundwater areas the cropping pattern are
generally of specilic nature, i.e. only -hose crops
suitable for saline zone can be grown whereas In FGW
areas, we have the option of determining the optimal
cropping pattern based on comparative advantage of
various competing crops under domestic as well as
international prices.
e/ Drainage is a cost in the production prooess. In FGW
areas, we incur cost on physical inputs only for
crop production whereas in SGW areas drainage should
be considered as additional cost and therefore the
net proritability per cropped acre wi1l naturally
be much lower in SGW as compared to PGW areas.
6". 'rhe DOM Report assumes that tractor technology would be
stimulated by the increased availability of canal and groundwater.
This should not be considered as an entirely dependent benefit
because tractor technology would have developed as a part of
global progress even without getting stimulation from increased
availability of canal water.

7. Para 32 of Project Performance Audit Memorandum (Page 19)

refers to irrigation water allocation among Pakistan's l'rovinws.
It is coiisidered that the excerpt from the paragraph reproduced
below be suitably modified to omit reference to phrases such as
"politicized n.ature" and "lack of decision on final allocation" :-

"A major constraint on Tarbela's agriculture impact

has been the thoroughly politicized nature of Indus
Basin surface water allocations among Pakistan's
Provinces, the lack of decisions still on "final"
allocations of additions to this resource , and the
uncertainties this has generated in the minds of
Provincial Governments and farmers for their irriga-
tion investment decisions. "
- 22 - Appendix

8, Similarly, In para 34 reference to *politically" deadlocked

*issues as this one on water allocation" may be omitted.
** ; ROJECT cOMM}T-UllN. r OR
Last Para of Chapter VII of Project Completion Report mentions
about the damage caused by dislodging of concrete block from central
dividing wall of stilling basin of Tunnel No. 3. Damaged basin floor
was reDaired by O&MCrews in Jan. 1985 using "Hydrocrete", an under-
water concrete product. Later towards the end of i985, the
stilling basin was inspected in the dry when dowatering was
possible after construction of a downstream cofferdam in connection
Wlth Powerhouse uk;xtension Project and the underwater repairs were
found in sound condition.

10. Para 8.07(C) of P.C.R refers to strengthening of hoist towers

for outlet gates of Tunnels 3,4 and 5 as set forth in TAMS report
of May 1982. It may be noted that strengthening of hoist tower
for Tunnel 4 outlet gate only is envisaged at present. Tunnel 5
* hoist 'towersare conventional reinforced concrete structures with
intermediate piers already provided. Work on construction of power
units No. 11 to 14 on Tunnel No. 3 is schleduled to commence in
the fall of 1986 and would be completed by 1990. Strengthening of
hoist towers on Tunnel 3 is, therefore, not considered essential
for the short intervening period.

.11. All in all, we agree 'with the finding of PCR. However,

updating the information base regarding crop yields, economic
prices of wheat and inclusion of fisheries benefits in the stream
.of benefits as well as environmental impact will further enhance
the economic benefits & IERR estimated at 12.5% in the PCR.
- 23 -





April 1984

Irrigation I Division
South Asia ProjectsDepartment
( -"I ,

-3 ~~ ~ ~ fi 1

hef' >,fo /_
- 25 -





1.01 The Indusand Its tributaries have sustainedcivilizationsfor 4,500

years, remainingas vital to presentday Pakistanas theywere to ilarappa and
Moenjadarofour milleniaago. Sincerainfallis low and variableover most
of the country, irrigatikn is a necessity for a viable agriculture.Of a
totalcultivatedarea of about20 M ha (25% of the land area), some 12 M ha
are servicedby canal irrigation,4.5 M ha by small streams,springs,wells
and seasonalflooding,and only 3.5 M ha are cultivatedunder oftenvery
uncertainbarani (rainfed)conditions. Indicativeof its importance,it is
estimatedthat irrigatedagriculture accountsfor more than 90% of value
added in the sector(equivalentto almost30% of GDP), supportsdirectlyor
indirectlyperhaps60-70% of the population,and contributesto almost two
thirdsof totalexports.

1.02 Virtuallythe entire canalirrigatedsystemderivesits suppliesfrom

the Indus and its tributaries,and the canals,dams and barragesconstructed
since 1859 representthe largestcontiguousand interdependent irrigation
systemin the world. Besidesthe rivers,this systemcurrentlycomprisestwo
major storagedams, nineteenbarrages-cum-headworks, twelvemajor link canals
to transferwater betweenrivers,forty three canalcommandsand about89,000
water courses. The combinedlengthof the canal systemis about 58,500km
(36,350miles), of the water coursesand farm channelsabout 1.6 M km (1.0M
miles)and of the surfacedrain systemabout 14,400km (8,950miles). In
additionto the canal system,many publicand smallerprivatetubewells,both
withinand outsidethe canal commandedareas,help controlwater levelsand
provideadditionalirrigationsuppliesbased on the vast aquiferwhich under-
lies the Indus plain.

1.03 Access to the waters of the Indus systemis thereforeof crucial

nationalimportance.While over 90% of the fertileIndus plain lieswithin
Pakistan,its shareof the combinedcatchmentarea of 950,000sq km (367,000,
sq miles) is only 60%,with the headwatersof all the major riversrising
beyondPakistan'sborders. Furthermore, given the low rainfalllevels,the
major part of the system'smean annual run-off(81 BCM or 66 MAF at Tarbela)
is derivedfrom the mountainsto the north and west (theHimalayas,the
Parriosand the Hindukush)which lie primarilyin India,Tibet,Kashmirand
- 26 -


2.01 Partitionof the IndianSub-Continent in 1947 dividedthe then

unifiedirrigationsystem,leavingthe headwatersof the Punjab tributaries
in India. As a result,extensiveareas of irrigatedland in Pakistan,espe-
ciallyin the water short Sutlejcommands,were placedat risk. That the
dangerwas real was demonstratedas early as April 1948 when India took
initialsteps to divert the waters of the three eastern-mosttributaries,
the Sutlej,the Beas and the Ravi.

2.02 The IndusWater Treaty. The Indianactioncreateda crisisbetween

the two nationsthreateningto add a perennialbone of contentionto their
alreadytroubledrelations. That this was avertedowed much to the influence
of the World Bank and its role in facilitating
the negotiations
which led up
to the 1960 IndusWater Treaty. The two countriesacceptedthe Bank'soffer
to help with the disputein 1952. In 1954, tentativeproposalswere made for
the divisionof the watersand the firm of Tippets-AbbettMcCarthy-Stratton
(TAKS)was retainedto providetechnicalassistanceand to carry out
hydrologicstudiesof the proposedplan. These studiesestablishedthe basic
adequacyof the plan, examineda numberof possiblealternatives and demon-
stratedthe need for reservoircapacityto store surpluswaters of the west-
ern rivers for timelyreleaseand conveyanceto irrigatedareas in Pakistan.

2.03 In the springof 1959 an agreementin principlewas reachedon

(i) the basic divisionof the Induswaters, (ii) the generalfeaturesof the
works to be constructedin Pakistanto implementthe divisionand (iii) the
amountIndiawould contributetowardthe cost. Followingthis agreement,it
took about a year and a half of furtherdiscussionsto agree on the details
of the Treatyand especiallyon the provisionsfor the transitionperiod,
i.e., the ten-yearperiod (or longer)duringwhich the works involvedwould
be under construction.Immediatelyfollowingthe "agreementin principle",
Pakistanestablished an Indus BasinAdvisoryBoard (IBAB)with a view to
accelerating the initiationof the works proposedfor Pakistan,once the
forthcoming treatybecame a reality. Concurrently with the negotiationsthe
Bank had canvasseda group of friendlynations,the PakistanConsortium,for
funds to coverthe major portionof the "Settlement Plan", the schemeof
works to be built in Pakistan.

2.04 The treatywas signedon September19, 1960,with the World Bank a

signatoryfor certainspecifiedpurposes. Briefly,the treatyallottedto
India the waters of the three easternriversof the Punjab (the Ravi, the
Beas and the Sutlej,with a total annualmean flow of 40.7 BCM (33 1IAF)),
leavingto Pakistanthe watersof the threewesternrivers (the Indus,the
Jhelum and the Chenab). Under a concurrentagreement,the Indus Basin
DevelopmentFund Agreement,provisionwas made for two major storage
projects,one on the Jhelum(Mangla)and one on the Indus (Tarbela),as well
as for a huge systemof barragesand canals to divert and conductwaters from
the westernrivers to irrigateland which had traditionally been supplied
fFom the easternrivers(the so-calledreplacement works). The Bank was
appointedAdministratorof the IBDF and the Water and Power Development
Authority(WAPDA)was appointedexecutiveagencyof the Governmentof
- 27 -

2.05 The ReplacementWorks. The totalresourcesof IBDF initially

amountedto US$894M (US$632M in foreigncurrency),but this was increased
to US$1,209M(US$946M in foreigncurrency)under an April 1964 Supplemental
Agreement. Pakistanacceptedresponsibility for meetingfrom its own resour-
ces all furtherrupee requirements.It was also agreedthat the augmented
resourceswould be appliedfirst to meet the costs of the works excluding
Tarbela,and in the early 1960s,WAPDA,assistedby international consultants
and contractors,initiatedconstructionof the following works:

(a) Mangla Dam on the JhelumRiver to conservesurpluswater from

the summer monsoon periods;

(b) Six barrages to make diversions from the main rivers; and

(c) Eight link can.1s to convey water generally eastwardfrom the


2.06 With minor exceptions,these replacementworkswere completedby 1970

on scheduleand represented one of the largest,most complexand most suc-
cessfulprogramsof construction ever attemptedanywhere. Nevertheless, as
impliedby the term 'replacement', theseworks contributedlittlethat was
additionalto Pakistan'sagriculture(althoughadditionalpower generating
capacitywas providedat Mangla). It had alwaysbeen understoodthat in
returnfor renouncingall claims to the easternrivers,and in additionto
the replacement works, Pakistanwould also be assistedin a significant way
to add to its agriculturalcapacity. Originally,the treatyhad providedfor
constructionof a main streamdam on the Indusat Tarbela,and it was there-
fore agreedthat,providedthe projectproved technicallyand economically
viable,the Tarbelasite would be developedfully rather than partiallyas
would have been requiredto meet only replacement needs. It was further
agreed that any resourcesremaining in the IBDF after completionof the
originalreplacementworkswould be allocatedto Tarbela.

2.07 Effect on Other Programs. The immenseeffortrepresentedby the IBDP

and Tarbelaprogramsinevitablyabsorbedthe major proportionof externalaid
as well as significantamountsof domesticresources. It also tendedto
divert attentionaway from downstreamproblemsassociatedwith the operation
of Pakistan'senormousnetworkof irrigationfacilities. Generally,original
design criteriaof the canal systemevolvedto fit availability of water
suppliesin the rivers,to meet the objectiveof bringingto maturitythe
largestpossiblearea of cropswith the minimumconsumptionof water, and to
operateat a low cost and with a limitednumber of technicalstaff. These
resultedin low croppingintensities and low yields. While these irrigation
schemeswere historically very successfulin generatingagricultural
surplusesat a timeof low populationdensitiesand few technological
demands,they have been less well adaptedto the requirements of modern
agriculture.In an attemptto meet risingdemands,flows in excessof
designedcapacitiesare now being carriedin many canals,placinggreat
stresson the systemand increasingsignificantly the risk of failure. Addi-
tionally,the huge size of the systemmakes largecontinuingmaintenance
demandsand mitigatesagainstclose controland schedulingof water supplies.
- 28 -

Furthermore,the systemwas largelydevelopedwithoutprovisionof complemen-

tary drainagefacilities. Althoughover the years a fairlylargenetworkof
surfacedrains has been constructed,thesewere often based on limitedtech-
nical criteriaand data. As a result of inadequatedrainage,over time the
watertableunderlyingthe Indus plainhas risen, leadingto seriousproblems
of waterloggingand soil salinityin certainareas.
2.08 The SCARP Program. With expectedcompletionof IBDP and Tarbela
works in the mid-1970s,GOP shiftedemphasisto resolvingthesewaterlogging
and salinityproblems,launchingin 1973 an acceleratedprogramof waterlog-
ging and salinitycontrol(SCARPProgram)with construction activitiesagain
entrustedto WAPDA. Previously,however,waterloggingand salinityhad not
been entirelyneglected;the first integratedprojectto providea comprehen-
sive systemof surfaceand tubewelldrainagein an area of the Punjab, SCARP
in the 19 60s rein-
I, dated back to the 1950s. Planning studiesundertaken
forcedthis approach,identifiedadditionalareas suitablefor SCARP
projects,proposeda major systemof surfacedrains to disposeof saline
effluent,and emphasizedirrigationbenefitsthat could be obtainedfrom
canal remodellingand from SCARP tubewellsin freshgroundwaterareas.
Remedialmeasuresprovidedunder SCARPs attemptto lowergroundwaterlevels
throughtubewellpumpingand, to a limitedextent,throughtile drainage.
Pumpingfrom freshwater aquiferslikewiseprovidesan additionalsourceof
irrigationwater and enables leachingof salts from salinesoils. Under the
SCARPs,WAPDA to date has installedabout 12,000publictubewells,and
individualfarmershave installedover 180,000tubewellsall of which con-
tributein varyingdegreesto water suppliesand to watertablecontrol.

2.09 The SCARP Program,however,has not been withoutits problems. Its

comprehensive approachto area developmentand emphasison construction
throughWAPDAhave, as in the case of the IBDP/Tarbela works, tendeduninten-
tionallyto divertattentionaway from water management, on-farmdevelopment,
and relatedissues. Financialand other constraints have slowedimplementa-
tion,and establishment of large public sectortubewellfieldshave placedan
on-goingfinancialburdenon operatingagencies(provincial Irrigation
Departments) and have seriouslyrestrictedfunds availablefor normalmain-
tenanceof the surface distribution and drainagesystem. In addition,this
programhas had technicaland operationalproblems. Tubewell(TW) life has
been less than planned(10-15years insteadof the assumed30-40 years)and
becauseof pluggingof screensand gravelpacks,the capacityof most TWs
decreasesabout 5 percentannually. Watertableshave been loweredand
irrigationsuppliessupplemented, but efficientmanagementof public
tubewellsgenerallyhas proved elusive. Furthermore, the additionof Tarbela
water,while significantly increasingdry seasoncropping,has also tended to
aggravatewaterloggingproblemsin certainareas 1/ and broughtinto focus
concernsabout overallefficiencies in the use of irrigationsupplies. These
concernswere heightenedfurtherby the demonstration undera USAID-funded

1/ Soil salinitysurveycompletedby WAPDA in 1980 indicatedthat about 35%

of the Indus Plain has a watertableat less than 10 feet below ground
- 29 -

researchprojectthatwater losses in the system,especiallyat the water-

course level,were significantly
higher than had been previouslyassumed.1/

2.10 RevisedActionProgram. Increasingly during the 1970s,therefore,it

becamerecognizedthat a more directapproachto the problemsof management,
maintenance, ane.efficiencyin the operationof Pakistan'sirrigationsystem
was required,and further,that such an approachwould need to be more
closelyattunedto the immediateconstraintson agricultural productionthan
in the past. To help evolvenecessarypoliciesand programsto implement
such a strategy,a UNDP-financed and World Bank-executed studywas mounted to
preparea RevisedAction Program(RAP) for irrigatedagriculture.While
recognizingthat programsto increaseavailability of water and other inputs
will continueto be important,RAP recommendedin 1979 that greaterpriority
be given to complementary measuresdesignedto ensuretheir efficientuse, in
particularthroughfarm-levelprogramsand mobilizationof privateinitiative
and capital. Recognitionwas given to the capacityof the farmerto respond
to appropriateincentivesas well as to the need to generateadditional
resourcesin both the public and privatesectorsto relieveacute resource
constraintsfacingPakistan. In light of these considerations, RAP recom-
mended: (a) investmentpoliciesthat emphasizedqu;ok returnsand that
complementedexistingfacilitiesrather than expansionof irrigatedarea
(rehabilitation, on-farmand watercourseimprovements, essentialdrainage,
and agricultural supportservices);(b) managementpoliciesthat transferred
relevantactivitiesto the privatesector (e.g.,tubewelldevelopmentin
fresh groundwater areas) and that strengthenedGOP operatingagencies;and
(c) pricingpoliciesthat recognizedcontinuingresourceconstraints and the
need to provideappropriateefficiencysignalsto the privatesector.

2.11 RAP recommendationsin large measurehave been acceptedby GOP. A

programof watercourseimprovements is underwayand one for rehabilitating
the irrigationsystemis being activated.2/ Other proposedprojectsresult-
ing from the RAP recommendations
privatetubewelland rural electrification projectdesignedto promote
privategroundwaterdevelopment; a SCARP transitionprogramto transfer
groundwatermanagementin selectedfreshwater SCARP areas from public to
privatesector;and a commandarea water managementprogramemphasizing
improvedmanagementof existingsystems,togetherwith complementary physical
improvements. 3/

2.12 Summary. The successfulimplementationof Indus Basinworks

facilitateddivisionof Indus waters,and Tarbela,despitetechnical

1/ Seepageand operationallossesmeasuredunder operatingconditionswere

found to be 40-60 percent(ANNEX7, item 22).

2/ On-farmWater ManagementProject(Cr. 1163-PAK)and IrrigationSystems

RehabilitationProject(Cr. 1239-PAK).

3/ Projectpreparationis being financedunder the UNDP Umbrella

with the Bank as ExecutingAgency.
- 30 -

problems,has greatlyadded to dependableirrigationsuppliesand power

generatingcapacity. The TarbelaPower Plant constitutes about 30 percentof
the nation'selectricgeneratingcapacityand the power productionhas been
immediatelyabsorbedas units came on line. In water managementthe situa-
tion is constantlyimproving. Much work at all levelshas greatlyincreased
the awarenessand definitionof major problems. Properpolicieshave been
adoptedand complimentaryprogramsare now in place.


3.01 GOP establishedthe Dam Investigation Circle in 1953 to carry out

feasibilitystudiesof possibledam sites on the Indus,Jhelumand Chenab,
and as early as 1954 their consultants(Tiptonand Hill, Inc.) had submitted
a reportdeclaringfeasibleconstructionof a dam at Tarbelato impound5.2
BCM (4.2 MAF) of live storage. The TarbelaDam Organization(TDO)under the
sponsorshipof WAPDAwas establishedin 1959 and WAPDA'sgeneralconsultants
(HarzaEngineeringCompanyInternational) conductedpreliminaryinvestigation
of threepossibledam locationsin the Tarbelaregion. In February1960,
TAMS was appointedProjectConsultantto the TDO and entrustedwith site
investigations, projectplanning,preparationof detaileddesignsand con-
tract documents,and supervisionof projectconstruction once a decisionto
proceedhad been made. In line with the decisionto developthe site fully,
TAIS submitteda ProjectPlanningReportin January1964 recommendingcon-
Structionof an earth dam 14b m (485 ft) high to createa reservoirof 13.7
BCM (11.8MAF) gross storagecapacity,the size of dam and reservoirthat
were eventuallyconstructed.

3.02 From the outset and to this day, Tarbelahas requireda sustained
international fundingeffort. The other Indusworks (para2.05) had consumed
the bulk of the originaland supplemental IndusBasin Funds leavingan insuf-
ficientbalanceavailablefor constructionof a dam on the Indus. The
estimatedbalanceremainingin the Indus Fund after financingManglaDam and
the barragesand link canalswas US$324M, about two-thirdsof the then
estimatedtotalfunds reqviredfor Tarbela.

3.03 In view of the shortageof funds remainingfor Tarbela,the

feasibility and costsof Tarbelawere reviewed. It was not until February
1965,after an independentstudy by a group of consultingengineeringfirms
reatainedby the World Bank - Sir AlexanderGibb & Partners,HuntingTechnical
Services,Ltd., CharlesT. Main and Stone & Webster- had confirmedthe
technicalfeasibility and economicsoundnessof Tarbela,that work on the
projectagain began to move ahead. The final reportof the World Bank cover-
ing the independent studieswas completedin 1967 (seeANNEX 7, item 4). It
consideredthe entirewater and power resourcesof West Pakistanand recon-
firmedthe necessityfor Tarbelain the overalldevelopment program. It
recommendedconstructionof TarbelaDam in a singlestage of optimumheight
plus a powerhousehavingan ultimateinstalledcapacityof 2,100MW.

3.04 In November1966, the Bank presentedto the PakistanConsortiumthe

estimatedfinancialrequirementsfor Tarbela togetherwith the expected
surplusavailablefrom the IndusBasin DevelopmentFund and asked that member
- 31 -

countriesoffer loans to cover the shortfallin foreignexchange.Nego-

tiationsculminatedin the Consortiummeetingheld at Paris in March 1968
where membersand the Bank agreedto make additionalgrantsand loans to
cover fully the financingof the project. Followingthe patternof replace-
ment works, the TarbelaDevelopmentFund (TDF)was establishedin 1968 with
foreignexchangecontributions amountingto US$149M from Canada,France,
Italy,UnitedKingdomand the UnitedStates;US$25 M in a Bank loan
(548-PAK);and an estimatedsurplusof US$318M from IBDF, makingUS$492M in
all to meet an estimatedforeigncurrencyrequirementof US$484M. As in the
case of the Indus BasinDevelopmentFund (para 2.04),the Bank was appointed
Administrator of TDF. Pakistanagreed to meet all rupee costs. With financ-
ing arrangementscompleted,the TarbelaDevelopmentFund Agreementwas signed
on May 2, 1968,and the US$623M TarbelaContract(US$360M in foreign
exchange),the then largestcontractin the historyof civil engineering
construction, was awardedafter internationalcompetitivebidding(ICB). On
November4, 1968, the Presidentof Pakistanofficiatedat the groundbreaking
ceremonyfor Tarbela.

3.05 As a consequenceof damage to certainfacilitiesof the Tarbela

Projectduringthe first reservoirfillingin the summerof 1974 (para7.01),
additionalfinancewas requiredto meet the cost of repairsand additional
works considerednecessaryfor projectcompletion. Under the Tarbela
DevelopmentFund (Supplemental)Agreement1975,US$37 M was contributedby
the United States,United Kingdom, Italy,Australiaand IDA (US$8M)
(581-PAK).In addition, Canada agreed to make availableon an untied basis
the balanceof approximately US$3 M outstanding from its originaltied con-
tributionto the Fund. These specialcontributions were to be disbursed
againstspecifiedworks as had been determinedby the Administrator.The
cost of the repairsand additionalworksnot so determinedhave been met from
the generalresourcesof TDF.

3.06 After completionof the originalrepairsand remedialworks, further

adversedevelopments gave rise to the need for additionalworks. The
availableforeignexchangeresourcesof TDF were insufficient to meet
the estimatedcosts of these furtherworks. Accordingly,the (Second
Supplemental) Agreement1978 was drawnup to help meet the remainingcost of
completing the project. Under this (SecondSupplemental) Agreement,con-
tributionsamountingto US$79 M were to be receivedfrom Canada, Germany,
Italy,UnitedKingdom,and IDA (US$35M)(771-PAK). In addition,the European
EconomicCommunity(EEC)providedUS$14 M equivalentin two credits: Kuwait
providedUS$18 M, SaudiArabia US$60 M and Abu Dhabi US$25 M. As discussed
in para 8.04 additionalfundshave been providedfor operationand main-
tenance (O&M)purposes.

3.07 Pakistanhas financedall rupee costs of TDF, includingthe Sup-

plementaryAgreementsof 1975 and 1978,the entire costs of Tunnel 5, the
powerplant units and equipmentand the primarytransmissionlines,equiv-
alent to more than US$1,275M includingdutiesand taxesof about US$340M
(ChapterX and ANNEX 4 for financingdetails).
- 32 -


4.01 TarbelaDam is a remarkableengineeringachievementin many respects.

It is the largest (in volume)embankment-type dam in the world; fifty percent
largerthan the next largest. The dam standson such a great depth (600
feet-160m) of highlyperviousalluviumthat a conventional verticalcut-off
wall was impracticaland use was made of an upstream"blanket"to reduce
underflowseepage. Tarbelais more than twice as high as the next largest
embankmentdam employingan upstreamblanketand was the first to be con-
structedon foundations with such extensiveassociationsof openworkgravels
(gravelswithoutsands fully fillingthe voids). The tunnelsare very large
and the steel tunnellinerswere the largestever made. The stillingbasins
at the tunneloutletsare uniqueenergydissipatorsfor low-leveltunnel
outlets,with hydraulicforcesmore than twice that of the next comparable
structure. The tunneloutletgates were the largestever made for use at
such high head. The spillwaysare some of the largestever constructed, and
in contrastwith others,thoseat Tarbelamust be used at high dischargesfor
three monthsof every year.

4.02. The principalelementsof the TarbelaProject (seeMap) are:

(a) The main dam, an earth and rock-fillembankment-type,

Indus RiverValley;

(b) On the left bank -

(i) two auxiliaryearthand rock-fillembankment-type dams

to close two saddlesin the left reservoirrim and at the
upstreamend of a side valley,

(ii) two spillways discharginginto plunge pools in the side

valleywith a naturalrock weir in the side valley
maintainingwater levelsin the spillwayplunge pools,

(iii) a tunnel (TunnelNo. 5) discharginginto the side valley

for irrigationreleases;

(c) On the right bank -

(i) a group of four tunnels(Tunnels1-4) throughthe right

abutmentto providefor (1) river diversionduring the
last phase of constructionof the main dam, (2) irrigation
releasesand (3) releasesfor power production,

(ii) a powerplantand switchyard,


(d) The impoundedreservoir.

4.03 Constructionof the foregoingfacilitiesbegan in mid-1968and

proceededon schedule;fillingof the reservoircommencedwith the impounding
- 33 -

of the snow-meltand monsoonriver flowsof 1974. In August 1974,a series

of difficultiesdevelopedwhich set in motion a repair/remedial
extendedover a 10-yearperiod (see ChapterVII).

4.04 Constructionwas under a single civilworks contractwhich required

the contractorto completeall constructionincludingthe powerhousebuild-
ing. The gates,power units,switchgear, cables,etc.,were manufactured
under separatecontractsmanagedby WAPDA but the civilworks contractorwas
requiredto collectthese itemsat point of manufacture,ship to site and

4.05 Additionaldetailson the construction programand scheduleare given

in ChapterVI and physicaldescriptionsof the Tarbelafacilitiesare given
in ANNEX 1. Detailsof TarbelaProjectstatisticsand comparisons with other
projectsare given in ANNEX 2. Detailsof projectfinancingare given in
ChapterX and in greaterdetail in ANNEX 4.


5.01 A numberof agencieshave been involvedand have playedsignificant

roles in the work on the TarbelaProject. They are shown on Plate 1 which
also shows the generalrelationships.

5.02 The Contributors.Foreigncurrencycapitalresourceswere con-

tributedto IBDF and to TDF by 10 nations,the EEC and through6 loans or
credits.l/Throughoutthe long period of the Bank'sadministration of these
funds, the response,assistanceand cooperationof the contributors was
outstanding.Money was alwaysavailablewhen it was needed,firstthrough
the PakistanConsortiumand the Bank'seffortsand later from MiddleEast
countriesunder bilateralagreementsnegotiatedby GOP when the earlier
sourceswere dryingup. Particularly helpfulwas the willingnessof the
early contributor communityto place the money at the disposalof the Bank to
manage as a common pool. The resultingflexibilityin managementof TDF was
particularly needed and usefulduringthe periodsof emergencyand duringthe
remedial/repair program. The contributions from the Abu Dhabi,Kuwaitand
Saudi loans,which came later,were receivedon a reimbursement basis,fol-
lowing initialdisbursements from the TDF, in additionto the Banksnormal

1/ The IBDF receivedcontributions fromAustralia,Canada,the Federal

Republicof Germany,India,New Zealand,Pakistan,the UnitedKingdomand the
USA plus an IBRD loan (266-PAK)and an IDA credit (60-PAK). Directcontribu-
tions to TDF were from Australia,Canada,France,the FederalRepublicof
Germany,Italy, Pakistan,the UnitedKingdom,the USA and the European
EconomicCommunity,and from an EEC SpecialActionCredit (51-PAK),an IBRD
loan (548-PAK)and two IDA credits (581-PAKand 771-PAK). The contributions
to the projectfrom the MiddleEast funds (Abu Dhabi,Kuwaitand Saudi
Arabia)were not made in advanceof disbursementexcept for some direct
paymentsfor one contractnot administered by TDF.
- 34 -

role of disbursingthe rupee componentsof financing. This proceduredid not

providethe same flexibilityand involvedcousiderably more work, time and
attention,particularly by GOP, WAPDA and Gibb. A lessonlearnedis that for
such a large project,with numerouscontributors, a common pool of funds
resultsin more flexiblefund managementto the advantageof the project.

5.03 WAPDA. The Indusand TarbelaFund Agreementsprovidedthat the

Governmentof Pakistan(GOP)appoint an agencyto carry out the obligations
of the agreements. The appointedagencywas the Water and Power Development
Authority(WAPDA). WAPDA is a semi-autonomous agencyof GOP. Its function
is the developmentof major water resources,and the gene.ation,transmission
and distribution of power. Managementof WAPDA is by a governingbody con-
sistingof the Chairmanand threeMembers representing the threemajor divi-
sions: the WaterWing, the PowerWing and Finance. WAPDA exercisedits
responsibility and authoritythroughits main officein Lahoreand througha
substantialstaff at the projectsite and was involvedwith not only all of
the work on the projectfacilitiesbut also was responsiblefor land acquisi-
tion and resettlement.

5.04 ProjectConsultant.The ProjectConsultantfor the TarbelaProject

was Tippetts-Abbett-McCarthy-Stratton(TAMS)of New York, N.Y., USA. TANS
was the "Engineer"as definedin the Contractfor the construction of the
TarbelaProject. TANISwas responsiblefor all engineering and construction
and contractadministration at Tarbelaand for assistanceduring the first
years of operation. Both the New York officeand a site officewere heavily
involvedin the work. TAMS field organizationat the peak included65
expatriates.TAMS also had a large Pakistanistaff at site, 1,600 at peak,
as well as Pakistaniengineerssecondedto the New York office. In addition,
TANS employeda number of distinguished engineersand scientists, with
WAPDA'sconcurrence, as specialconsultants.The SpecialConsultants, as
they became known,were mainly concernedwith mattersof principlerather
than of designdetail. They individually and collectively advisedon matters
of geology,soils,hydraulics, models,seismicity,drainage,rock mechanics,
grouting,concreteand sedimentation.

5.05 GeneralConsultant. Harza EngineeringCompanyInternational was

GeneralConsultantto WAPDA on all Indus Basin Projectwork and also reviewed
Tarbelawork. Harza'sGeneralConsultantresponsibilities were carriedout
by a site representative
at Tarbela,an officein Lahoreand the main office
in Chicago,Illinois,USA.

5.06 Contractor.The civil engineeringcontractor,TarbelaJoint Venture

(TJV),was a consortiumof heavy civilengineeringcontractorssponsoredby
Impresit-Girola-Lodigiani(IMPREGILO)S.p.A.,of Milan,Italy. Other members
of the consortiumincludedCostruzioniGeneraliFarsura"Cogefar"S.p.A.,
Milan; ImpresaAstaldiEstero S.p.A.,Rome; Compagniede Constructions Inter-
nationales(CCI),Paris;CompagnieFrancaised'Entreprises (CFE),Paris;and
Societede Construction de Batignolles,Paris. In March 1969, five German
and two Swiss contractorsjoinedthe consortium: iochtief AG, Essen;Philipp
HolzmannAG, Frankfurt;StrabagBau AG, Cologne;Ed ZueblinAG, Duisberg;
C. BareselAG, Stuttgart;Conrad ZschokkeAG, Geneva;and LosingerAG, Berne.
In September1977 the consortiumwas renamedIndusRiver Contractors(IRC)
for executingthe new contractsand "Cogefar"was replacedby "ImpresaAngelo
- 35 -

Farsura." At the peak of work the Contractorhad about 16,000employees,

includinglargemanagementand officestaffs,a numberof subcontractors,
constructionequipmentvaluedat over US$100million,extensiveshops and
vast inventoriesof materialsand spare parts. Large colonycomplexeson
both banksof the river includedall necessarycommunityfacilitiesand

5.07 The World Bank. As pointedout previously,the Bank has participated

continuouslysince the early 1950s in all phasesof the IndusBasin and
TarbelaProjects. The Bank playedparticularlyimportantroles in settlement
of the water disputebetweenPakistanand India which resultedin the Indus
Water Treatyand the construction of works under the Indus Basin Development
Fund Agreement,as Administrator of both the IBDF and the TDF, and in review
of technicalstudiesand the construction program. A number of seniorBank
officialsas well as membersof projectand programstaffsand staff of Legal
and Controller'sdepartments have been involved.

5.08 Under the Agreementsof 1968, 1975, 1978 and 1980 1/ the Bank acts as
Administrator for the Projectand disbursesall funds contributed.In its
capacityas Administrator of TDF, the Bank receivesthe contributions from
the parties,includingthe transferfrom IBDF,holds the assetsof the Fund
in trust,and disbursesthe resourcesof the Fund to meet expenditures of the
Project. The Bank, as Administrator, is also responsiblefor the general
supervisionof the Projecton behalfof the partiesto the Agreements,and
providestechnicalassistanceas needed. The Bank providescontributorsand
other interestedpartieswith semi-annualprogressreportsand also prepares

5.09 As Administrator
of IBDF and TDF, the Bank representedthe interna-
tionalcommunityof lendersand donors. The need to give prudentmanagement
to thesefunds,togetherwith the large contributions by Pakistan,for a
constructionprogramof unprecedented magnitudecomplicatedby the Tarbela
remedial/repairprogramresultedin very broad and deep involvement by the
Bank; beyondfund managementinto projectmanagement,administration, techni-
cal analysisand technical decisions. The Bank was greatly assistedin this
work by Sir AlexanderGibb & Partners.

5.10 World Bank Consultants.Sir AlexanderGibb & Partners,Reading

(formerlyLondon),England,have been consultantsto the Bank since 1960,
first in the work under the IBDF and laterunderTDF. Gibb reviewedengineer-
ing proposals,plansand designs,contractualand financialaspects,attended
meetings,witnessedmodel testsand observedconstruction qualityand
progress. Followingthe onset of problemsin 1974 (para7.01),Gibb'sterms
of referencewere broadenedto play a more directpart in the developmentof
design changesfor the remedialwork. In 1979,Gibb'srole was expanded

1/ Loan 548-PAK(1966),Credit581-PAK (1975),Credit711-PAK(1978)and

EEC SpecialActionCredit51-PAK (1980).
- 36 -

again to includereviewand monitoringof the programof operationand main-

tenance(O&M). Gibb also was responsibleto the Bank for financialmanage-
by monitoringconstruction
ment and fund administration quantities,certify-
ing payments,keepingTDF and non-TDFexpenditures separated,reviewingand
preparingcost estimatesand forecastingfund statusincludingstatusof
funds fromcontributing countries. In this work Gibb had a Lahore officefor
work relatedto IBDF with site observersfor each main contractand later a
Tarbelasite office.

5.11 Coopersand Lybrand,CharteredAccountantsof Londonwere retained

by the Bank to auditthe accountsof the generaland projectconsultants.

5.12 Interaction Among the Parties. Generalrelationsamong the parties

are shown on Plate 1. WAPDAwas the agent representing the owner,GOP.
Harza functionedas GeneralConsultantto WAPDA. TAMS was ProjectConsultant
responsiblefor projectdesign,technicalstudiesand supervision of con-
struction. TJV (laterIRC) was the main contractor.The World Bank was
Administrator of TDF with Gibb as consultantsfor independenttechnical
reviewand paymentcertification and Coopers-Lybrandas consultantsfor audit
of consultants' accounts. By any measure the organizationalarrangementwas
successful.Probablythe primaryevidenceof this is that the parties
respondedfully, in an organizedmanner,to the emergencies which began in
1974. On the other hand the arrangements were not trouble-free.For
example,the numberof organizations with interests,responsibilities, views
and competencein technical areas sometimes complicatedand even delayed
decisionon complextechnicalissues. The finalresult,however,probably
was betterdecisions. The potentialfor difficulties in this area was
reducedconsiderably by arrangementsthat had been agreedearlieras dis-
cussedin the followingparagraphs.

5.13 Decision-makingand Control. The proceduresfor decisionmaking,

controland fund managementat Tarbelawere laid down in 1960 by the Bank as
Administratorof the IBDF (and laterof the TDF) and agreed witb WAPDA.
These proceduresprovidedfor review of all documents,drawingsand varia-
tionsby WAPDA,harza and Gibb beforecommitmentswere made.

5.14 Variouslevelsof decision-making were developedwhich enabledlesser

decisionsor variationsto be agreedon site to save time. For larger items
AppropriationRequestshad to be submittedto reviewand approvalbefore
variationorderscould be issued to the Contractor.

5.15 When problemsarose during first fillingof the reservoirin 1974,

emergencyproceduresfor technicalcontroland decisionmakinghad to be
quicklydevelopedto respondto the new situation. The key to successin
controllingthe situationand in overcomingthe technicalproblemswas a
systemof implementation meetingsof all parties,includingthe Contractor,
with only decisionsfor actionbeing recorded. In this way technicalsolu-
tions could be agreedupon in full knowledgeof all availablefactsand
capabilities.During this period of 'crisismanagement'therewas a far
greaterinvolvementof the Bank and its consultantsin findingtechnical
solutionsto problemsas they arose.
- 37 -

5.16 These special procedures introduced the risk of diffusing the Project
Consultant:s' responsibilities and as soon as possible procedures for techni-
cal control and decision making reverted to the former format.

5.17 The development of technically satisfactory solutions to the unprece-

dented problems encountered at Tarbela, and their prompt implementation in
the limited time available before succeeding flood seasons, has been a major
achievement of all parties concerned.

5.18 Throughout the project construction and rehabilitation, financial

control and fund management was linked closely to technical control. Annual
capital cost estimates and half-yearly forecasts of disbursements were
prepared by Gibb. In addition, WAPDA had their own financial control system
including Government Audit.

5.19 During the period of initial repairs in 1974/75 the limited time
available between flood seasons to carry out repairs and additional works and
the changed nature of the work made it impractical to use existing rates
under the contract. The work had to be carried out on a cost plus basis,
since it was being both designed and constructed under an accelerated program
which left little time for advance planning. Orders for materials for
example had to be placed on the basis of certain assumptions which could only
be confirmed when the damage had been fully assessed and the remedial work
decided upon.

5.20 The return to normal procedures was progressive: the 1977/78 works
were carried out under contract at rates which were negotiated as the work
progressed; the 1979/80 works were carried out under a similar contract but
with rates negotiated in advance; and the conversion of stilling basin 4 to
twin flip-buckets was put out to international tender after full review of
design and documents, and prequalification of tenderers.

5.21 Insurance. Insurance against loss or damage with respect to the

Tarbela construction project was taken out under the conventional CAR (Con-
tractors All Risks) policy prescribed by the Federation International des
Ingenieurs - Conseils (FIDIC) Conditions of Contract (International). The
policy was subject to a ceiling of US$100 million in indemnity for any one
event, which was the maximum obtainable in the market a, that time. Premiums
paid amounted to approximately US$17 million. Several small claims were met
by the insurers in the course of construction.

5.22 Following the incidents at Tarbela in 1974 and 1975, claims totalling
US$49.9 million equivalent were lodged against the insurers. The insurers
rejected these claims on the contention that the loss was caused by defective
design and/or non-fortuitous events. The delay in the settlemeat of the
claim faced Pakistan with severe problems particularly since it was clear
that considerable additional funds were needed immediately for repairs.
Arbitration proceedings were instituted by the owner and each party retained
counsel in London. Discussions were held and eventually the insurers offered
US$16 million in final settlement of the claims. This offer was accepted by
the owner in light of advice that litigation would be protracted and expen-
sive, and its outcome uncertain.
- 38 -

5.23 The experienceat Tarbelaset in motion a reviewof the adequacyof

the traditionalinsuranceregimefor major civilworks. The detailsof this
reviewand its presentstatusare describedin ANNEX 3.

5.24 Training. TAMS' contractwith WAPDA providedfor a designofficein

Pakistanand for secondmentfromWAPDA of all TAMS local staff. These arran-
gementsworkedwell, and the engineeringprofessionin Pakistanhas greatly
benefitted. In addition,the construction work forcemobilizedby IRC was
recruitedin Pakistan,givennecessarytrainingand workedunder IRC super-
visors. In this manner a vast number of Pakistanisdevelopedskillswhich
enabledthem to move to other jobs,both in Pakistanand world-wide.


6.01 The Tarbela Dam Project was constructed under a single major con-
tract. One nominatedsubcontractor and numerousother subcontractors were
employedfor specializedwork.

6.02 Prime Contract. The prime contractfor the constructionof the Civil
EngineeringWorks of the TarbelaDam Projectwas a unit pricecontractincor-
poratingconditionscommon to the contractsfor the variouscomponentsof the
IBP; theseconditions,in turn were based on the widely-accepted1st edition
of the FIDIC form. The prime contractcomprisedthe construction, completion
and initialmaintenanceof the whole of the works, includingthe powerhouse
building,and provisionof all labour,materialsand construction plant. The
gates, power units, switchgear,cables,etc.,were manufacturedunder
separatecontractsmanagedby WAPDA but the civil works contractorwas
requiredto collectthese items at point of manufacture,ship to site and

6.03 Pregualification,Tenderingand Award. Followingpre-qualification

study,tenderdocumentsfor the Tarbelaprime contractwere issuedto four
consortiaof contractors
with sponsoringfirms as follows:

(a) Guy F. AtkinsonCo.,

(b) HochtiefAG, and
(c) ImpregiloS.p.A.
(d) Morrison-KnudsenInternational
Co., Inc.,

6.04 In late April 1967 a pre-biddingsite conferencewas held at Tarbela.

Tenderswere openedat Lahoreon November30, 1967. Contractawardwas made
to TarbelaJoint Venture (TJV)(the consortiumsponsoredby Impregilo)on May
14, 1968.

6.05 NominatedSubcontract.The work of fabricating and installingthe

steel liners in the fourmain tunnels,and the bifurcations,penstocks,
manifoldand branchpipes externalto the tunnels,was of immensescope and
complexity. The timelyand satisfactory completionof this work was critical
to the progressof tunnelconstruction and completionof the project.
Separatetenderswere invitedfor this work for eventualdesignationof the
- 39 -

successfultendereras a nominatedsubcontractor to the prime contractor.

On July 1, 1969 the subcontractwas awardedto ChicagoBridge & Iron Co.$
(C.B.I.). Later,under a separateagreement,C.B.I.furnishedand installed
the steel linersfor the Left Bank IrrigationTunnel (TunnelNo. 5).
6.06 Subcontracts.TJV made extensiveuse of subcontractorsto carryout
much of the specialtywork, notablythe installationof permanentmechanical
and electricalequipment,cuttingand bendingof reinforcingsteeland
fabricationof structuralsteel,drillingand grouting,painting,and the
construction of auxiliaryfeaturessuch as offices,shops,housingfor labor
and staff,and communityfacilities.

6.07 SupplyContracts. The variousitemsof mechanicaland electrical

equipmentsuch as gates,cranes,pumps,motors,generators,switchgear, etc.,
were purchasedunder a seriesof 24 major supplycontractsand 16 smaller

6.08 Diversionand Construction Sequence. Construction of the Project

fell into threestages,relatedto care of the river (seeMap): Stage-i,
with the river flowingin its naturalchannelsand work proceedingon the
right bank; Stage II, with the river flowingin a diversionchannelon the
rightbank and the work spread to both sidesof the river;and Stage III,
with the river divertedthroughthe right bank main tunnelsand work con-
centratedon the closuresectionof the main dam and on the powerhouseand
the switchyard.

6.09 In Stage I, the objectivewas construction

of the rightbank diver-
sion channeland buttressdam and a starton the tunnelsand main dam. The
materialsexcavatedwere used in part in the constructionof a portionof
the main dam.

6.10 In Stage II, the riverwas confinedto the DiversionChannel. Right

Bank work on Tunnels3 and 4 was completed;work on Tunnels 1 and 2 was
completedfor diversionof the River. On the left bank, construction of the
two AuxiliaryDams was completedand the two spillwaystructureswere-essen-
tiallycompleted,except for installation of the crest gates. Across the
valley floor,the main embankmentdam was completedto withina few feet of
the crest elevation,exceptfor the gap throughwhich the diversionchannel
flowed. The blanketwas completed.

6.11 The ButtressDam gates were closedon September29, 1973, slightly

ahead of schedule,and final diversionthroughthe tunnelswas achieved. In
Stage III,with the river flowingthroughthe tunnels,the remainingsection
of the main embankmentdam - the closuregap - was completed. Work continued
on the left and right banks to completeother as-yet-incomplete
It was expectedthat at the end of StageIII, October1974, the main dam
would be essentiallycomplete,the reservoirfilledto approximately spillway
crest level,and the reservoirdischarging throughTunnels3 and 4 and pos-
siblyover the crest of one of the two spillways.

6.12 Duringthe course of projectconstruction, openwork(bouldergravel

lackingin fine particles)was encounteredin the foundationof the main dam
and this led to a decisionby all concernedthat initialfillingof the
- 40 -

reservoirwould be controlledand gradualto permit close observationof the

dam foundationsand upstreamblanketat progressivereservoirlevels(the
"observationalmethod");a maximumlevel of El.1520 (463m) was plannedfor
the first filling. Stage III, however,did not developas planned. Con-
structionof the closuresectionprogressedahead of schedulebut, with a
partiallyfilledreservoir,severedifficulties developed(para7.01)with
tunnels1 and 2 in August 1974when the reservoirlevelwas at 1465 feet and
it becamenecessaryto empty the reservoir. This and eventsthat were to
followhad far reachingconsequences for Pakistanand for TDF.

6.13 TechnicalAdvances. Tarbelatenderdocumentsand drawingswere

preparedduring the period1965/67. Progressin engineeringinvolvesadvanc-
ing from known positionsand in a numberof areas Tarbelarequirements and
featureswere beyondthe stateof the art. Comparisonsof Tarbelafeatures
with other projectsare given in ANNEX 2. Followingare some of the most
significant contributionsof Tarbelato engineeringknowledge,designand

(a) Rollcrete. in repairof damagesto TunnelNo. 2, in the work of

liningthe plungepools of the Serviceand Auxiliaryspillways
and in the conversionof TunnelNo. 4 outletfrom a stilling
basin to twin flip bucketsvery largequantitiesof rollcrete
were used; used on a much largerscale than anywhereheretofore.
kollcreteis a formof concretewith less than one-halfthe
amountof cementas is used in regularconcreteand with
aggregatesizes up to 10 inches,producedin very large
quantities(at Tarbelaat a maximum rate of 18,000m3 /day
(24,000cu yds)) and transported, placedand compactedwith
regularearth-handling equipment,i.e., large dumpertrucks,
bulldozersand vibratoryrollers. The experienceat Tarbela
demonstrated the usefulnessof roll-creteas a structural
materialwhere largevolumesmust be placedquicklyand where
thereare low requirementsfor uniformstrength,impermeability,
resistanceto high velocityflows and weather.

(b) Large CapacityGates and StillingBasins for Low Level Outlets.

The outletgates on Tunnels3 and 4 must be capableof releasing
varyingquantitiesof water as irrigationrequirements change
and as reservoirlevelsfluctuate. To do this with the large
dischargesrequiredand when the pressurehead on the gates could
be as high as 132 m (433 ft), requiredoutletcontrolstructures,
i.e., steel transitionsfrom tunnelsto twin, radialoutletgates
and stainlesssteel linedgate chambers,with dimensionsbeyond
anythingever constructed.The entiremassivestructureswere
heavilyreinforced,prestressedand anchored. The design,
fabrication, installation and final fittingall involvedconcepts
and techniquesnever beforeaccomplished on such a large scale.

(c) Steel-FiberConcrete. Final repairsto the stillingbasin of

TunnelNo. 3 carriedout in 1976/77includedplacementof a
20-in thick final surfaceof steel-fiberconcreteto provide
greaterresistanceto cavitationand abrasion. This largeuse
of steel-fiberconcreteappearsto have given full protection
- 41 -

againstthe very largeforces;seven operationseasonshave passed

and inspectionsrevealnegligibleerosionof the protectedfloor
of the chute and basin.

(d) ExtensiveUpstreamBlanket. Of large embankmentdams employing

an upstreamblanket to reduce reservoirseepage,Tarbelahas no
close competitor,eitherin extentof the blanketor in heightof
dam utilizinga blanket. Performanceof the blankethas been as
expected;underseepagehas consistently reducedas each season
passesand further,performanceof the blankethas been enhanced
by consolidationof the blanketand by the depositioneach year
of a deepeninglayer of sediment. Findingof the sinkholeson
drainingthe reservoirin Aug./Sept.1974 and their successful
treatmenthave added a valuablepage to engineeringknowledge
and experience.

(e) Analysisand Treatmentof BlanketSinkholes. The presenceof

sinkholesin the upstreamblanketwas observedin 1974 after
emergencyemptyingof the reservoir. While the blanketwas
exposedthey were filledwith blanketmaterialand the thickness
of the blanketwas increased. In the years since therehas been
a continuingprogramof underwatersurveys(para6.13 (f))
to monitorprevioussinkholelocationsand to locateand fill
new ones by dumpingfiltermaterialfrom barges. Consensusis
that sinkholesare initiallycracksdevelopingfrou differential
settlementand beginat the bottomwhen the fines from the blanket
materialwashes into open layersin the foundation.The treatment
has been effectiveand the performanceof the blanketcontinuesto
improve(para6.13 (d)). No publishedexperienceof sinkholesin
blanketsexistedin 1974 but subsequentenquiriesrevealedthat
sinkholeshad occurredin the upstream.lanketof Arrow Dam in
Canada. Primarilybasedon the Tarbelaexperienceit is now
recognizedthat sinkholesmust be anticipated where blanketsrest
on graveland sand alluvialfoundations and differentialsettle-
ment can occur.

(f) Side-ScanSonar and SonicProfiling. On the basis of knowledge

of experiencein North Sea oil exploration,side-scansonar
equipmentand sonic profilingequipmentwere used for the loca-
tion and study of sinkholes. This uniqueapplicationhas been
successfulfrom the beginning. This equipment,togetherwith
radio navigationequipmentto locatesinkholesand the barges
to dump the blanketmaterial,althoughinitiallyunder the
controlof the main contractor,are now all operatedby Pakistani

(g) OtherAreas of TechnicalAdvances. In additionto the areasmen-

tionedabove,theri were otifer technicalareas where the expe-
rience at Tarbelaadded to engineeringknowledgeand experience,
e.g., a great varietyand a great numberof monitoringinstruments
were installedin Tarbelafacilities, some of which, such as the
double fluid settlementievicewere new, and all of which gave
data on instrumentperformance and instrumentcomparison;new
- 42 -

knowledgewas gainedin instrumentand cable installation;

importantexperiencewas gainedin manufactureof the core
materialwhich insteadof the conventionalhomogeneousmaterial
was a mechanicalblend of dissimilarmaterials;and considerable
knowledgehas been gainedon the effectsof small surface
irregularitiesin causingcavitationdamageunder high velocity


7.01 As mentionedpreviously, construction of the projectproceededas

planned with closure of the main embankment made on schedule;storageof the
flows of the Indus began. On August21, 1974,when the reservoirlevelhad
reachedabout elevation447 m (1,465ft) (maximumstorageelevationis 472 m
(1,550ft)), the firstof the followingseriesof damagesand problems
August 1974 - loss of liner platesand damage to liningof outlet chamber
of TunnelNo. 3 causedby a faultyweld. The damagewas
repairedby fillingwith concrete,addinganchorsto the
linerplatesand applyinga hardenedsurface.

- severedamage to Tunnels 1 and 2. This disastrousevent

involvedpartialdamageto TunnelNo. 1 and the total
collapseof portionsof TunnelNo. 2. The failurewas
probablycausedby unsymmetrical and partialopeningand
closingof upstreamcontrolgateswhich combinedwith loss
of bearingrailswhere fixingbolts had not been tack
welded causedjammingof the gates. An heroicand massive
effortby all parties,particularly by the Contractor,
completedrepairsin time to safelystore the late Spring
and Summer runoffof 1975.

- discoveryof sinkholesin the upstreamblanket. When the

reservoirwas emptiedfollowingthe damageto Tunnels1 and
2, a large number (426)of sinkholeswere foundin the main
blanket. Some new ones have appearedmost years since and
the cumulativetotal found is now 500 (July1983). The
sinkholeswere probablycausedby movementof the blanket
materialinto open layersof the alluvialfoundation(para
6.13(e)). They have been successfully treatedby dumping
of filtermaterialonto the sinkholes. This programof
dumpingfrom bargeswill undoubtedlycontinue-for a number
of years.

1/ The sequenceof events,the damagesand problems,the probablecauses

and the repair programsare discussedin detailin Gibb'sreportof June
1980 (seeANNEX 7, item 23).
- 43 -

August1975 - failureof floorslab of TunnelNo. 3 stillingbasin.

This major failureoccurredunder conditionsof high head
dischargewith the stillingbasin floor alreadyseverely
eroded by the circulationof bouldersin the basin as a
resultof the unsymmetrical operationof the outletgates
to draw down the reservoirin 1974. The weakenedfloor
failed and the foundationrock eroded to a depth of over
70 ft and the massivewall betweenbasins3 and 4 was
undermined. The floor and wall were rebuilt.

April 1976 - furthererosiondamageof No. 3 stillingbasin. Large

slabs of concretewere sweptout from the basin floorby
high velocityflows. The causewas judgedto liethe very
high hydraulicuplift forces trappedby respositioned
water-stopscombinedwith the large fluctuations in the
water surface. This time extensiverepairswere made
togetherwith new techniquesof anchors,an extensive
sub-floordrainagesystem,facilitiesto introduceair into
the water jet and placementof a thick floorof steel-fibre
concrete. Some minor cavitationdamagehas occurredin the
walls but repaircould be calledroutine. However,WAPDA
continuedta be uneasyabout the realiability of the
stillingbasinsand the difficultiesof their inspection
and maintenanceand favoredthe modification of TunnelNo.
4 outlet from a stillingbasin to two twin flip buckets. A
two-yearprogramof modification begun in April 1981 with
IRC as the contractor,was completedin June 1983.
September1976 - discoveryof sinkholesin the upstreamface of the main
embankmentdam. Five sinkholeswere discovered. The
principalsinkholewas investigatedby a shaftand by
borings. It was concludedthat small areas of the
foundationhad settledallowingprismsof the embankment
to settle. It was agreedno dangerexistedand that no
treatmentwas necessary. A similarsinkhole was found
in March 1984.

August1977 - rapid erosionof right side of ServiceSpillwayplungepool

and movementof foundationof flip bucket. Circulating
currentsinitiallyset in motionby uneven erosionof the
plungepool sidesand outlet,causederosionand threatened
the foundations of the servicespillwayflip bucket.
Beginningin October1977, therewere major and expanding
work programsduringeach of the followingthreework
seasons. (A work seasonbeginsin Octoberand ends in
earlyJune). Each season'sprogramwas worked out on the
basis of the spillwayperformance during the high summer
flowsand on the basisof testingof models. The final
result,completedin June 1980,is massiveand deep
concrete-faced rollcretebeneaththe bucketand on the
rightside cuttingoff the embayment,combinedwith rock
reinforcedby post tensionedanchorsprotectedby concrete
facingon the left side and at lower levelson all three
- 44 -

sides. This work is of suchmagnitudethat there is a

completeabsenceof previousexperience. In addition,much
of the steep hillsideabove the right side of the pool was
removed. A generallysimilarscenariotook place at the
AuxiliarySpillwaybut after an initialremedialprogramto
controlerosionon the left side of the pool, a decision
was taken to line the pool beforefurtherdevelopment
for2edthe need to take protectiveaction. The final
design,basedon model tests,was for a concretefaced
rollcreteliningbeneaththe bucketand to both sidesof
the plungepool. The work at the auxiliaryspillwaywas
completedin June 1982.

September1977 - discoveryof a sinkholein the upstreamface of Auxiliary

Dam No. 1. As previouslymentioned,sinkholeswere
discovered in the upstream blanket after the first filling
in 1974. Two years later,sinkholesappearedin Auxiliary
Dam No. 1. To investigate, a shaft followingthe sinkhole
zone, was excavated to bottom of the core. A shafton
the downstreamside and extendingto a deeper levelalso
was excavatedand twice reopened. Even with these
investigations and relatedtests, therewas no positive
identification of the initialcause of the sinkhole.
However,there is a growingopinionthat seepagealong
trenchesand riserscarryinginstrumentation lineswas a
factor. Piezometerreadingsshowedadversechangesabout
the time of discoveryof the sinkhole,but there has been
no significantfurtherdeterioration.There has been no
increasein drainageflows throughthe dam. There is
generalconsensusthat therehas been a downstream
migrationof fines at the sinkholesection. Careful
reservoirfillingand observationof instruments, together
with some groutingtreatmentfrom the downstreamshaft,
give the generalfeelingthat the situationhas stabilized
but monitoringwill continue.

Since 1974 - substantialseepageflows carryingdissolvedmineralsfrom

the right abutmentdrainagegalleries. Flow and water
qualitymeasurements, reviewof pre-constructiongeologic
informationand geotechnicalreviewby specialconsultants
has resultedin programsto extendthe grout curtainsand
constructtwo lower galleriesfor additionaldrilling
explorationand grouting. Furthertreatmentstepshas
involvedregroutingfrom the drainagegalleriesand barge
dumpingof silt on, and sealingof, the submergedabutment
and nullahadjacentto the dam. This work will probably
continuefor severalmore years.

Since 1974 - moderateseepageflowsfrom the left abutmentdrainage

galleries. The left rim of the reservoirfrom the main dam
upstreamto aboveAuxiliaryDam No. 1 is a thin ridge and
showsevidenceof leakageat the dam and beneaththe
AuxiliarySpillway. The rock is blocky with thin soft
- 45 -

seams betweenthe blocksand becausethe formationis thin,

the possibleseepagepaths are short. There is agreement
that a groutingprogramis calledfor, probablyfor a
number of years,and the programis underwaywith a major
contractcompletedin 1983. A complementary programof
barge dumpingof silt is also underway.

January1982 - moderatelandslideof the right abutmentoutfallarea above

the stillingbasins. This was caused by slow softeningof
the graphiticschistby groundwateraccompaniedby creep in
the rock above,which resultedin a slopefailure. Repair
was done by cuttingback the elope,providingincreased
drainageand replacingslope protection.

March 1984 - loss of large concreteblock from downstreamend of center

dividingwall of stillingbasin of Tunnel No. 3 doing some
damage to basin wall and floor and probablycausedby very
large pulsatinghydraulicforcesnear face of hydraulic
jump. At time of writingof this report severalrepair
techniqueswere being considered. Repairsprobablywill be
made by WAPDA O&M forces.

7.02 work resultingfrom the foregoingdamagesand

The remedial/repair
and problemswas carriedout over a periodof ten work seasonsinvolving
largerequirementsfor mobilization, criticalwork schedulesand additional
funds. Nearlyall of the repair/remedial work was done by IRC. Duringthis
periodtherewas a constantflow of communications among the officesof the
involvedparties. Severaltimeseach year, and always in Novemberafter the
annualfillingof the reservoir,largemeetingswere held at site where
operatingexperience,instrumentation results,technicalproblems,model
studies,design changesand constructionprogramsand programrevisionswere
reviewed. Major decisionswere made at thesemeetingswhich governedthe
work programsuntil the next meeting.

7.03 Total cost of the remedial/repairprogramat June 1983 was estimated

to be about US$475M with aboutUS$35 M remainingto be spent, for a total
cost of about US$510M. Part of this cost was for repairof damagesbut a
part shouldbe consideredto be delayedcapitalexpenditure. This is the
situationin the case of the liningof the spillwayplungepools which in
retrospectwas clearlynecessary. This cost was roughlyUS$100M for each
plungepool. Part of the cost also was in the natureof preventivemain-
tenance. Responseby all partiesto the emergencieswas outstandingand the
remedial/repair work, togetherwith all facilitiesof the project,appearsto
be nearlycompleteand soundbut a high level of futurecare is essential.

7.04 The Tarbelaremedial/repairprogramhas receivedmuch attention,not

only in nationaland internationalpressbut also in technicaljournals.
There has been much analysis,discussionand speculationas to the causesof
the problemsat Tarbela. Althoughfor some problemsthere appear to be
specificcauses,for the most part more generaland over-ridingcircumstances
were controlling. In addition,the problemsfor the most part were excep-
tionaland unforseeableat the then existinglevel of knowledgeand
experience. In general summary the main points aze:
- 46 -

(a) The damagesto the floor slab of stillingbasinNo. 3 were

probablydue to materialfailureand inadequateallowancefor
the cavitationpotentialof the very high dischargevelocities
associatedwith the need for very large energydissipationwhich
requiredstructuresof unprecedented size.

(b) The damagesto Tunnels1 and 2 probablyresultedfrom the loss of

securedby tack welding
gate rails due to fixingbolts not be'ing
or othermeans. This led to the jammingand subsequent
unsymmetrical operationof the gates.

(c) The sinkholesin the upstreamblanketnow appearto be a

phenomenonthat shouldhave been anticipatedconsideringthe
physicalcharacteristics of the blanketand the alluvial
foundationand were not a particularlycriticalproblem.

(d) The need to strengthenand line the plungepools of the

spillwaysresultedfrom the very large hydraulicforcesand the
unanticipated, uneven and early erosionof the plunge pools'sides
and outlets.


(a) Where forcesand the resultingsizes of structuresare unpre-

cedented,conservative approachesshouldbe takeninvolving
considerationof all possibleoptionaldesignsfully supported
by model testswith adequatetime allowedto determinethe best

(b) Even with the very largeand extensivegeologicalexploration

and testingprogramthe prototypeexperienceshowedTarbela's
geologicenvironmentto be more unfavorablethan expected.

(c) There is stillmuch to be learnedabout the effectsof very high

velocitywater flows in causingcavitation, erosion,uplift
pressures,pressurefluctuations and other dynamicforces. At
Tarbelatheseaffectswere sometimesunder estimatedboth on
structuresand on the complexand adversesite geology.

7.05 AlthoughTarbelarequiredimportantrepair and remedialwork, it has

continuedto providesubstantial plannedbenefitsto the
and uninterrupted
nation'seconomyeach year from water supply,productionof electricpower
and a measure of flood management.


8.01 The program of construction of the Tarbela Dam Project which began
in 1968,extendedthroughcompletionof initialfacilitiesand includedthe
remedial/repair program,will be completedin 1984. Initialoperationand
maintenance(O&M) activitiesbegan in 1975.The transitionfrom construction
- 47 -

to O&M will be completedin 1984when WAPDA staffwill assumefull respon-

sibilityfor all work at the project. In additionto the future tasksof
O&M, it appearsthat theremay be some additionalconstructionworks to be

8.02 O&M Program. Tarbelais one of a new generationof water conserva-

tion projectswhichhas had to be designedand levelopedfor geological
conditions which would previouslyhave been consideredto be unsuitablefor
large scaledam construction.Further,the physicalsize of many of the
facilitieswas beyondany experience. Consequently, the normalprovisions
for maintenanceat Tarbelawill alwayscontainan elementof development
which may vary widely from year to year. The key to the long-termsafetyof
Tarbelalies in the hands of the O&M organization.The immediateobjective
at Tarbela,therefore,is to leave the projectand projectO&M organization
in a strongand competentconditionfor the tasks ahead.

8.03 The O&M programof TarbelaDam Projectis very large. The develop-
ment of this program,with its requirementsfor skilledpersonnel,proper
equipment,adequateworkshopsand suppliesand adequateand availablefinanc-
of which
ing, has been beset by a number of problems,the most significant

(a) The repairand remedialprogramwhich began in 1974 and will

continueinto 1984 has takentime, attentionand resourceswhich
normallywould have been devotedto the developmentof the OM

(b) The provisionsgoverningexpenditures of the TDF did not include

resourcesfor capital investmentsin an O& programand thus it
has been necessaryto raise additionalcapital funds.

(c) The plannedsmoothtraneitionfrom construction to O&M was upset

in everyarea by the long remedial/repairprogram. For example,
WAPDA'splan has alwaysbeen to purchase,renovateand occupy
offices,workshopsand warehousesused by the Contractorduring
the construction periodoriginallyanticipatedto end in
1975/76. However,due to continuedwork load it was not until
1982 that the Contractorwas able to releasea significant number
of buildings. Consequently, duringthe years of work on the
remedial/repair program,WAPDA 0O& forceshave used temporary
and generallyinadequatefacilities.Only now are adequate
facilitiesbeing prepared.

(d) The lower total remunerationof the civil O&M staffby comparison
with others at site and other factorshas made it difficultto
recruitand retain staff.

(e) Inadequatefundingof foreignexchangehas handicappedprovision

of O&M plant,equipment,spare parts and supplies.

(f) There is no precedentor experiencein Pakistanfor such a large

need and applicationof resourcesand for such broad infrastruc-
turalsupportfor projectmaintenance.
- 48 -

(g) The sheer size and complexityof the facilitiesand the unexpected
problemsthat have been encounteredmake clear that the program
of maintenancewill be largerthan previouslyenvisioned.
Safetymust remainthe key concern.

8.04 As noted in paras 8.03 (b) and 8.03 (e), fundingfor O&M has been a
problem. To providea portionof the initialinventoryof 0&14equipment,
workshops,workshopequipment,supplies,tools,trainingand technicalassis-
tance, aboutUS$35.4M in foreignexchangefor O&M purposeshas been made
availablefrom varioussources;in January1980 US$3.2M was providedfrom
insurancerecoveries,in March 1980,US$6.5M was providedfrom the EEC
SpecialAction Credit (51-PAK)and US$1.5M was availablefrom the loan from
Abu Dhabi. In addition,in April 1983,an agreementwas signedwhereby
US$10.2M was providedby the Bank under Loan Agreement2247-PAK. Also, in
June 1983, US$14.0M equivalentwas made availableby UK throughthe UK

8.05 Increasedmanagementattention,significantly increasedbudgetsby

GOP of local currencybeginningin FY82 and of foreignexchangebeginningin
FY83, and additionalforeignexchangespecifically for O&M (para8.04) have
improvedthe situationconsiderably, however,strongattentionand adequate
financialresourceswill need to be continuallydirectedto the 0&1Hprogram.

8.06 A valuablelessonlearnedat Tarbelais that on largeprojects,opera-

tion and maintenanceshouldbe consideredat very earlystages. Expertsin
O&1Ishouldparticipatein designreviewand designdecisions. Preparationof
operationand maintenancemanualsshould be a part of finaldesign. Cost
estimatesand capitalfundingshouldincludeplantand equipmentneededfor
O&M. Assignmentof key O&M staff shouldbe made earlyenough to permit
projectfamiliarization,preparationof O&M programs,selectingand training
of staffand buildingapprenticeand trainingprograms.

8.07 PossibleFutureCapitalWorks. TAMS' reportof May 1982 (seeANNEX

7, item 25) summarizedwork since the first reservoirfillingand set forth
views on possiblefuture capitalworks for which additionalfundswill be
required. The substanceof the TAMS reportwill be refinedand modifiedby
furtherstudieswith portionseventuallyto becomeWAPDA programsin the
mid-to-late1980's. Briefly,the TAMS reportoutlinespossiblesignificant
future capitalconstruction work in the followingareas:

(a) extendingthe protectionof the plunge pool of the ServiceSpillway,

(b) strengthening
the piers of the ServiceSpillwayheadworks,
(c) strengtheningthe hoist towersfor the outletgates of Tunnels3,
4 and 5, and

(d) constructionof an underwaterdike upstreamof the right abutment

tunnelinletsor other means to restrainthe sedimentdelta in the
eventof an earthquakeof sufficientmagnitudeto triggerunderwater
slideswhich might chokethe tunnels(para8.08).
- 49 -

8.08 Studiesof ReservoirSedimentation.The Indus River carrieslarge

quantitiesof sediment. The problemof loss8of reservoirstoragevolumeas
the sedimentis depositedin TarbelaReservoirhas been studiedfor many
years. Early studiesindicatedthat TarbelaReservoirwould be filledwith
depositedsedimentsin about 50 years. Initialstoringof waterwas during
the summer of 1974; 1983was the tenth year of storlngwater. Duringeach of
these years sedimenthas been depositedboth on the reservoirfloor as a thin
layer of very fine sediments(whichhas improvedthe performance of the
upstreamblanket)and at the upstreamend of the reservoirwhere coarser
sedimentsare forminga delta which has been advancingslowlydownstream.
The accumulationand movementof these deltadepositsis beingmonitoredby
surveyswhich have been made eacn year since 1979. Analysisof these data
(a) annualaccumulation(1974-83)of 100-140,000acre-feetof sedi-
ments moving downstreamas a wedge (at this rate of siltationa
somewhatlongerreservoirlife is suggested);

(b) the wedge will reach the dam in about 1995 but probablynot
before that date; and

(c) the top slopeof the wedge will be about 2.5 ft/mile,and the
depth of the sedimentsat the dam will be about200 feet.

If this is the situationthat develops,two coursesof actionshouldbe


(a) some means to preventthe sedimentwedge from closingthe diver-

sion tunnels,such as an underwaterdam may be necessary;and

(b) some means to scour sedimentsfrom the reservoir,e.g. if mini-

mum reservoirlevelswhich would exposethe stop of the sediment
wedge were held for a period of about a month each year, the
river flowsduring this periodmay scoura portionof the pre-
vious year's sedimentdepositsfrom the reservoir,thus prolong-
ing the life of the reservoir.

As a resultof the data analysisand discussion,an investigation

and a study
programis now in progress. This programincludes:

(a) measurementsof river sedimentconcentrationand gradationto

more accuratelycharacterizethe depositionregimenand scour

(b) explorationand testingof delta sedimentsto determine


(c) furtherstudiesof the mechanismsof and potentialfor tunnel

cloggingand methods for tunnelclearing.
- 50 -


9.01 TarbelaDam Projecthas made all plannedwater deliveriessince 1975

and all plannedproductionof hydroelectric power since 1976 in spite of the
greatactivityand demandsof the remedial/repair program.
9.02 Total annual quantitiesof water releasedfrom TarbelaReservoirfor
irrigationuse and totalannualquantitiesof electricpower generatedare
shown in the followingtabulation:

Year Water Released ElectricPower

July-June for Irrigation Generated

1975/76 3.33 -
1976/77 9.07 138.3
1977/78 10.00 3,367.2
1978/79 8.71 3,726.0
1979/80 9.91 4,123.0
1980/81 10.63 4,128.8
1981/82 11.33 4,200.5
1982/83 9.12 5,228.2/a

TOTALS 72.10 24,912.0

AVERAGES 9.01 3,114.0

/a Increasefrom previousyears reflectsadditionof units

5-8 duringthe year.

9.03 WAPDA is in the processof assumingfull responsibility for the

-&M programat TarbelaDam Project. As noted in para 8.01, initialO&M
activitiesbegan in 1975. It also was noted in para 8.03 that certain
problemshad adverselyaffectedthe developmentof the O&M program. Para
8.04 noted that supplementalforeignexchangeresourceshad been made avail-
able to developa strongO&M capability. Close attention,strongmanagement,
adequatefinancialresources,strictadherenceto tight schedulesand
nationalrecognitionof the uniqueand criticalnatureof Tarbelawill
clearlybe requiredto developand carry out the necessarilystrongO&M

9.04 Developmentof O&M Program. The O&M programfor Tarbelahas been the
subjectof continuingdialoguebe-tween WAPDA and the Bank with the objective
of developinga fully comprehensivescheme. The firstseparatebudget for
theseactivitieswas made in 1976. The O&M organization has progressively
had an expandedrole, takingover responsibility and controlof civil, elec-
tricaland mechanicalfacilitiesupon completionby the construction contrac-
tors. Planningand implementation of the O&M programis the responsibility
of WAPDA. TAMS has developedthe necessarymonitoringorganization, com-
pleteddetaileddrawings,gatheredmanufacturersinstructions, and is cur-
rentlypreparingoperationand maintenancemanuals for WAPDA O&M staff. Gibb
has been continuouslyreviewingthe evolvingO&M program.
- 51 -

9.05 In addition to these ongoing long-term activities, there have also

been five specific reviews of the 0&M program. First, Gibb submitted a
report in early 1978, generally setting forth the required scope of the O&M
program and progress to that time. They have since reported at regular
intervals on the progress being made by WAPDA. Second, Harza, in 1978
reviewed tool, equipment, and spare parts requirements for O&M. Third, in
1979 a consultant to the Bank assessed and reported on the status of O&M
work, WAPDA'spreparedness for greater responsibility, and areas where the
program was lagging. Fourth, in 1980, Impregilo reviewed needs for heavy
equipment, workshops, and stores for O&M activities. Fifth, in 1982, a
consultant to the Bank reviewed the O&Hprograms related to the
mechanical/electrical facilities.

9.06 The Tarbela Dam Project Office is headed by a General Manager and
Project Director who reports to Member Water at WAPDA headquarters in Lahore.
The General Manager and Project Director is responsible for all civil
facilities including the repair/remedial program. The Tarbela Power Plant is
headed by a Chief Engineer and Project Director who reports to the General
Manager, Generation at WAPDA headquarters in Lahore. The Chief Engineer and
Project Director is responsible for the powerhouse 0&M and additions to
generation facilities. He also is responsible for 0OM of the spillway and
tunnel gates. This division between water and power interests at all levels
in WAPDAhas been a concern to the Bank since it could lead to lack of coor-
dination and duplication of resources. The matter is under consideration by
Chairman, WAPDA.

9.07 The remaining work of the remedial/repair program will be completed

by early 1984. IRC, the contractor, has already begun to demobilize and will
have closed up workshops and removed most equipment by mid 1984. WAPDA will
then carry full responsibility for the O&Mprogram with its own resources.

9.08 Progress of WAPDAas at August 1983 in the several areas of taking

over full responsibility for project O&Mis as follows:

(a) Staffing. There are about 1,100 sanctioned positions in the

O&Morganization. A number of these positions are as yet
unfilled and as pointed out previously (para 8.03(d)) low staff
salaries and other factors have made it difficult to recruit and
retain staff. This problem has been discussed with WAPDA many
times and the Bank has suggested that WAPDA review the situation
as a matter of urgency.

(b) Shop Facilities. All shops will be completed by early 1984.

(c) Equipment, Spare Parts and Supplies. Most of the initial

inventory of equipment, spare part and supplies is at site.
Funds are available (para 8.04) for additional equipment to
complete the initial inventory and to purchase additional
equipment or to add new types of equipment if the need develops.
- 52 -


10.01 As previouslypointedout, the SettlementPlan formedthe basis of

the Indus Water Treaty and the IndusBasin DevelopmentFund Agreement. The
total resourcesof the IBDF amountedto US$894M (US$632M in foreigncur-
rency). By the time contractshad been awardedfor the first phase of the
works the estimatedtotalcosts, excludingTarbela,had risen to nearly
US$700N (overUS$450M in foreigncurrency).

10.02 In April 1964 a Supplemental Agreementincreasedthe total resources

of IBDF to US$1,209M (US$946M in foreigncurrency). By March 1968 all
replacementworks east of the Jhelumhad been completedand it could be seen
that sufficientfundswere in hand to completethe replacement works with
a surplusremainingwhich could be used for Tarbela. These remainingfunds,
togetherwith other contributionswent into the TDF. The TDF Agreementwas
signedMay 2, 1968.

10.03 As a consequenceof the damagesin 1974, additionalfinancein the

amount of US$37 M was providedin 1975. A secondsupplementalagreementin
1978 providedan additionalUS$79 M.

10.04 An additionalUS$ 32 M was made availableby the EEC, an EEC Special

ActionCreditand from insurancerecoveries. FurtherGOP arrangedfor con-
tributionstotallingUS$ 102 M. However,as these contribution were not to
be made directto TDF it was necessaryto providethe financeto bridgethe
time betweenthe disbursements beingmade from TDF until reimbursementswere
receivedfrom the separatefundingagencies. Althoughthis bridgingfinance
resultedin additionalcosts to the Administrator, thesewere acceptedin the
interestof satisfactoryand timelycompletionof the project.

10.05 In addition,Pakistanhas made very large contributions of local

currencyto both IBDF and TDF as well as financingthe entire costs of Tunnel
No. 5, the power plant and the primarytransmissionlines.

10.06 The following table detailsTDF disbursementsfor each calendaryear

in millionsof US$ equivalentsas at December31, 1982:
- 53 -

Disbursed Reimbursed Net Foreign

Local Foreign Foreign Currency
Year Currency Curreny Currency Disbursed

1968 10,400 12,988 - 12,988

1969 97,300 82,312 - 82,312
1970 62,750 77,150 - 77,150
1971 88,899 133,782 - 133,782
1972 60,256 75,077 - 75,077
1973 29,489 25,076 - 25,076
1974 35,684 40,563 - 40,563
1975 35,291 59,854 - 59,854
1976 23,146 32,323 - 32,323
1977 11,958 19,414 - 19,414
1978 24,159 22,629 - 22,629
1979 42,309 26,257 - 26,257
1980 50,347 42,975 8,863 34,112
1981 56,468 45,382 16,238 29,144
1982 25,188 28,755 28,919 ( 0.164)
Totals 653,644 724,537 54,020 670,517

10.07 The totalamountof both foreignand local currencyflowingfirst

throughIBDF and then throughTDF was about US$2,300M. Of this amountabout
US$1,400M went to Tarbela.

10.08 The Bank has been Administrator of both funds throughthis long
periodand playedan importantrole in fund mobilization.In the management
of IBDF and TDF the Bank wqasgreatlyassistedby Sir AlexanderGibb & Part-
ners (para5.07).

10.09 By any measure,this cooperativeinternational financialefforthas

been successfuland a credit to the international
community,GOP, WAPDA and
the Bank.

10.10 Detailsof the financialprogramare presentedin ANNEX 4.



11.01 Considering the physical, financial and management magnitude and

complexityof the project,the unexpectedocurrences,the many yearsinvolved
and the presentsuccessfulnear completionof the project,no strong
criticismscan be leveledat any of the partiesor of the cooperativeand
coordinatingarrangementsthat were followed. Rather,the world's largest
dam, the productof their work and cooperation,without precedentin many
dimensions,on a huge river and in a poor geologicenvironment,is productive
beyondexpectation, a tributeto international cooperation,and a monumentof
which Pakistanand its peopleare proud.

11.02 The Borrower,the Governmentof Pakistan,implementedthe Project

throughWAPDA. Reflectingthe fact that TarbelaDam was Pakistan'slargest
civilworks investment,GOP and WAPDA gave, and continuedto give, the
projecthigh priority. The severalChairmen,WAPDA,have given the project
- 54 -

their personalattentionas have high officialsin the concernedministries.

It is also clear that WAPDA has assignedsome of its beat personnelto the
project. The projectmanagementis of high qualityalthoughin some areas
additionalexperiencedsupervisorsand managersare neededat middle and

11.03 There is a pervasiveproblemrelatingto staffingof the O&M

organization; that of recruitingand retaininggood and experiencedpeople
(paras8.03(d)and 9.08(a)). An inconsistency in the levelsof allowances
as betweendifferentdisciplinescoupledwith the demand in the MiddleEast
for skilledworkersat high rates of pay have combinedto disrupteffortsto
create a strong,capableand permanentwork forceat Tarbela. GOP/WAPDAneed
to reassessexistingpoliciesso sufficientinducementis given by way of
adequateand equitableremuneration and careerand promotionprospectsto
ensure that experiencedstaff are availableat all levels,reflectingthe
uniqueand criticalnationalimportanceof the project.

11.04 Integrationof TarbelaInto NationalWater System. The Lieftinck

Report (see ANNEX 7, item 4) pointedto the need for couplingof waver
developmentwith agricultural developmentif the full benefitsof water
developmentwere to be realized. Effortsto accomplishthir with respectto
Tarbelahave fallen shortin a numberof areas: no reviseet allocation(among
provinces)has so far been made of the new yield from Tarbelaand improvement
is neededin integratingthesenew water supplieswith othlersuppliesfor
best use. Complimentary programsfor rehabilitating, modernizingand expand-
ing the existingirrigationsystemsand modernizingagriccltureby wider use
of technicalinputs,programsof rehabilitation of irrigationsystems,
improvingwater regulationpracticesand on-farmwater management,reducing
subsidies,increasingwater charges,providingdrainageand water quality
managementand strengthening infrastructuralsupportfor agriculture,are in
place and althoughsome are moving slowlythere is constantimprovement.

11.05 Need to StrengthenO&M Capabilityand FundingPerformance. As pre-

viouslypointedout (paras8.02-8.04)developmentof the 0&M programhas been
slow and is behind schedule. Althoughadditionalattentionand funds (para
8.04)have been directedto this program,much remainsto be done to assure
the long-termsafetyof the project. In additionto properlytrainedand
motivatedpersonnel,adequateand fully equippedworkshopfacilities,readily
availableequipment,supplies,technicalsupportand adequatefunds,there
needs to be an increasedrecognitionin all agenciesof the governmentthat
Tarbela'scare throughpropermaintenance,particularlythe requiredfunding,
must have a nationalpriority. In the future,when requestsfor funds for
TarbelaO&M will have to competewith requestsof all other programs,it will
be especiallyimportantthat GOP recognizethe criticalnatureand importance
of Tarbela.

11.06 Covenantsand Statusof Compliance. A numberof covenants have been

included in the the Tarbela loans and credit. All covenants have been com-
plied with although the Bank has pointed out that WAPDA'sdifficulty and
delay in filling sanctioned positions in the O&M organization could affect
WAPDA'sability to meet covenants which state 'The Borrower shall cause the
dam and other facilities included in the project -- (to be)-- operated and
- 55 -

maintainedin accordancewith soundirrigationand electricutilityprac-

tices."1/ (seeANNEX 5 for covenantsand statusof compliance).



12.01 Overview. Hydroelectric projects,2/ dam/barrageand link canal

facilities31 on the Indus and its tributaiiesfigureprominentlyin the
economyof Pakistan. Of the estimatedpotential10,000MW that could be
economicallygeneratedin hydro-electricity, about 35% has been harnessedto
date. Such facilitiesaccountfor over half of Pakistan'scurrentpower
generationcapacity(hydro-electric and thermal). With doublingof Tarbela
power to 1,400MW in 1982 on completionof a secondpower plant, its economic
contributionwas enhancedfurther,and plans are in place for developmentto
over 3,000MW.

12.02 In termsof irrigationbenefits,the main purposeof the reservoir

at Tarbela,as well as those at Manglaand Chashmais to store water in the
summer flood season,when river dischargesare greatlyin excessof irriga-
tion requirements,for use in the rabi (winter)season,when the main food
cropsare grown but naturalriver flowsare low and variable. In addition,
such facilitiesenableregulationof river dischargesand a matchingof canal
deliveriesto ratherinflexibletime patternsof crop water requirements in a
way not possibleformerly. Thus, the reservoirs,Tarbelain particular, have
enabledsignificantexpansionof rabi croppedarea and, by providingregu-
latedwater supplieshave also made the use of yield-augmentinginputs,such
as improvedseedsand fertilizers, as well as improvedon-farmirrigation
practicestechnicallyjustifiedand financiallyrewardingto farmers.

12.03 Tarbela,providingan estimated12.3 BCM of averageannualirriga-

tion irrigationreleases,servicesa systemof canal commandsof about 8.8 M
ha CCA, about 44% of the nation'scultivatedarea and 53% of its irrigated
area. By 1979-80rabi croppedarea within the systemhad expandedto 4.0 M
ha, yieldinga 25% increaseover the 1970/71-1974/75 averagepre-Tarbela area
of 3.2 N ha. About 75% of this incrementwas attributable to increasedrabi
water availabilities made possibleby Tarbelainvestments; the balancein

1/ Essentiallythis same covenantis includedin Loan Agreement548-PAK

ment 771-PAK (Section3.02(a))and SpecialAction ProjectAgreement
51-PAK (EEC) (Section3.02(a)).

2/ In additionto Tarbela,other largehydroelectric projectsare Manglaon

the Jhelum River (800MW) and Warsakon the Kabul River (240MW).

3/ Nineteenmajor barrages-cum-headworksdivertwater from the main rivers

for irrigationuse and twelvemajor link canals transferwater between
- 56 -

large measurewas due to increasedexploitationof usablegroundwaterresour-

ces. By 1980,about 80% of the incrementalrabi area within the Tarbela
canal commandsystemwas plantedto wheat, producingabout800,000tons of
incrementalgrain,or about 22% of the nationalincrease(3.6 M tons) over
pre-Tarbelalevels (7.2M tons). 1/ This incrementalwheat productionfrom
additionalTarbela-related irrigatedarea exceedsthe 75% reductionin wheat
importssince the mid-1970sof about 750,000tons. At present,incremental
rabi irrigationsuppliesfromTarbelaare estimatedto provideabout Rs 1,500
M p.a. in net agriculturalproductionbenefits(expressedin mid-FY83con-
stant economicprices)fromresultingincrementalrabi croppedarea.

12.04 EconomicAnalysisof the TarbelaProject. In recognitionof the

importanceof Tarbelainvestmentsto the Pakistaneconomy,this report recon-
firms the economicviabilityof the total Tarbelacomplex,includingrecently
approvedadditionsto maintenancecapitalplant. ConcerningTarbela's
economicimpact,a 1967 Bank-sponsored feasibilitystudy stated:

"The TarbelaDam is such a strategicelementin the integrated

programsproposedthat it is extremelydifficultto quantifythe
contribution which it makes itself to increasedproduction. Never-
thelessthe Bank Group tried to measure this contributionand it
believesthat, to the extentit is measurable,a reasonableconserva-
tive range for the rate of returnwould be about 9-13 percent."

Since this feasibilitystudy and start of implementation,

projectcosts have
increasedsignificantly, due primarilyto the remedial/repairprogram(para
7.01 et seq). There have also been delaysin downstreaminvestments in
irrigationand drainageworks as well as continuinginadequacies in water
management,extension,and other agricultural services-- pointsthat were
addressedunder the recentRevisedActionProgramme(para2.10). On the
other hand, new high yieldingcrop varietieswhich benefitrelativelymore
from irrigationhave becomeavailable,and economicvalue of agricultural
productionand electricalenergyattributableto the TarbelaProjecthave
increasedsharplytherebymitigatingthe impactof higherprojectcosts.
Likewise,the economicimpactof Tarbelawas strengthened by the expeditious
completionof initialworks, and althoughthe operational fillingof the
reservoirwas delayedone year until the summerof 1975,the reservoirhas
producedeach year its full yield of regulatedirrigationi
water supplies
despiteongoingremedial/repair work. Further,the initialpower plantbegan
productionon schedulein FY76 and has continuedoperationwithoutinterrupt-
ion. Based on re-analysis, consideringall incrementalcapitaland recurrent
costs, incurredand projected,and estimatedagricultural and power benefits
valuedat border prices,the Pakistaneconomyis realizingan economicrate
of returnon Tarbelainvestments of about 12.5%. Basedon quantified

1/ The balanceof incremental wheat productionhas been attributable to

othernew irrigatedarea resultingfrom greaterexploitation of usable
groundwater(bothpublicand privatetubewells), and from higher produc-
tion on traditionalarea with more regulatedwater supplies(surfaceand
groundwater)and higherfertilizeruse. The economicanalysisof the
TarbelaProjectdescribedherein excludesTarbela'scontributionto
increasedproductivity on traditionalrabi croppedarea.
- 57 -

benefitsdiscussedbelow, relativeagriculturaland power contributions

the presentworth (PWOR)1/ of totalestimatedbenefitsare 27% and 73%,
respectively(see ANNEX 6, Table 5). 2/ 3/

12.05 The economicreal flow for the projectis providedin ANNEX 7,

Table 4, with a full referencingof underlyingassumptions.The following,
however,outlinethe principalassumptionsof the economicanalysis:

(a) ProjectLife. The projecthas been assumedto have a life of

50 years 4/ from the start of constructionin FY68 (seeANNEX 6,
Table 3). Irrigationand power productionboth began in FY76.

(b) Agricultural Benefits. As indicatedin paras 12.02-12.03a

principalbenefitderivedfrom incrementalTarbelairrigation
water availabilities has been the expansionof rabi cropped
area, 70-80%of which has been plantedto wheat, the staple
foodgrainof Pakistan. By means of regressionanalysis,the
relationship betweenwater supplies--both surfaceand
groundwater--and rabi croppedarea was estimatedusing data from
the ten Tarbelacanal commandgroups coveringthe pre- and
post-Tarbela period of 1970/71-1979/80.Becausedata were
sufficiently detailedand to reflectbetter the importanceof
timelinessof water availabilities to farmers'decision-making,
surfacewater deliveriesduring the criticalland preparation
monthsof Octoberand Novemberwere used in the analysis(see
ANNEX 6, Table 3). As a result,these two water variables
(surfaceand groundwater)explained85% of the variationin rabi
croppedarea over the periodanalyzed. With high statistical
significance, elasticities betweensurfacewater deliveries
(October-November) and rabi croppedarea and betweentubewell
pumpageand rabi croppedarea were estimatedat 75% and 23%,
respectively.Using the estimatedrelationship betweensurface
water suppliesand rabi croppedarea, incremental area with
Tarbela supplieswas calculatedfrom predictedvalues. Since
rabi wheat accountedfor the major portionof totalincremental
area within the Tarbelacanal commandsystemduringthe
post-Tarbela period,irrigatedrabi wheat was used as the repre-
sentativecrop in estimatingtotalnet benefitsfrom the

1/ Streamsdiscountedat 10% p.a, the assumedOpportunityCost of Capital

(OCC)in Pakistan.

2/ Assumingdevelopmentof Tarbelahydroelectric potentialthroughUnit 12,

or upto 2,100MW, by 1980,the LieftinckReport predictedthat powerand
agriculturewould represent25% and 75%, respectively,of total Tarbela
benefits. As explainedin para 12.06 (c), the currentanalysisstudied
power developmentonly throughUnit 10 (FY86).

3/ Based on incrementalagricultural productionbefore adjustmentfor

incrementalcrop productioncosts.

4/ Para 8.08.
- 58 -

incrementalcroppedarea attributableto Tarbelareleases.Based

on historicalyield recordsfrom the Tarbelacanalcommand
system,incremental productionand net benefitswere estimated
for past years and for the remainingprojectlife. See ANNEX 6,
Table 2 for wheat input/outputassumptions.

(c) PowerBenefits. Power benefitsfrom Tarbelahydroelectric units

were measuredin termsof the savingsin investment, O&M, and
fuel costs for alternativethermalfacilitiesthat would be
necessaryto providean equivalentinput to the nationalgrid,
basedon past and projectedmonthlydemand. Necessarythermal
capacityrequiredto providethe same energygenerationas
Tarbelaon an annualbasis was examined. The analysisincludes
power developmentat Tarbela throughUnit 10, scheduledfor
commissioning in 1985,or up to 1,750MW. Capacityexpansion
has not been includedbeyondthis currentprogramsinceno work
schedulesor detailedfeasibilitystudieshave been preparedor
which to base estimates. Estimationof thermalalternative
capitalcosts has been based on a World Bank estimateof US$800
per kW in mid-1980prices,or about US$870per kW in mid-FY83
prices. BecauseTarbelafacilitiesproducechieflybaseload
power,the thermalalternativehas been consideredto be a
seriesof steam plants fueledby residualoil. It was estimated
that alternativeresidualoil requirements would grow from about
0.03M tons in FY77, at the start of Tarbelapowergeneration,
to 2.3 M tons in FY88 at full developmentto Unit 10. Fuel
needs were based on an assumedoutputof 4,000 kWh per ton of
fuel (seeANNEX 6, Table 4).

(d) Prices. For internationally tradedcommodities, economicprices

at farmgatelevelwere derivedfrom past and projected
(1975-1995) world market pricesexpressedin December1982
currencyvalues. Appropriateadjustmentswere made for freight,
handling,and qualitydifferentials.Local costsand domesti-
cally-priced benefitswere adjustedto border basis through
applicationof appropriateconversionfactors,the principalone
being a StandardConversionFactor (SCF)of 0.9. Year-specific
priceshave been used for inputsand outputsover the FY76-95
period,after which priceswere assumedto remainunchangedin
real terms. Regardingresidualoil pricing,an importequiv-
alenthas been assumedsince quantitiesrequiredto supply
alternativethermalplants (para 12.05(c))would far exceed
recent levelsof residualoil exports,averaging0.6 M tons over
the FY77-81period,1/ and those likelyin future. Input and
outputpricesused in the economicanalysisare summarizedin
ANNEX 6, Table '.

(e) TarbelaCosts. All incrementalcostsof the TarbelaProject

have been incorporated
into the analysis,includingthose

1/ Over this five-yearperiod,a maximumwas reachedin FY80 with 880,000

- 59 -

associatedwith construction(initialworks as well as

remedial/repair activities),powerinstallationsthroughUnit
10, resettlement of affectedpersonsand utilities,TunnelNo.
5, O&H plant, transmissionlines,and recurrentexpendituresof
Tarbela'sWater and Power Wings.

12.06 Risks. Based on the above economicanalysisof the Tarbelacomplex,

the followingsectionconsiderssome of the possiblerisksassociatedwith
the TarbelaProject. Problemsencounteredsincewater was first impoundedat
Tarbelain 1974 have been substantial(para7.01 et seq). Promptactionhas
been taken to deal with these,and measuresto safeguardthe Projecthave
been given highestpriorityby GOP. Work programsto repair and strengthen
structureshave been formulatedwith the adviceof international experts,and
have been based upon resultsof model tests. These work programshave been
carried out by the Contractor effectively and on schedule within difficult
time constraints imposed by seasonal river conditions. however, given the
unprecedented size and complexityof the TarbelaProject,the possibility
cannot be ruled out that furthertechnicalproblemsmay arise in the future.
Based on sensitivitytest resultspresentedin ANNEX 6, Table 5, however, the
TarbelaProject'seconomicviabilitydisplaysconsiderablerobustnessto cost
increasesor benefitshortfalls.Actual costs and benefitsover the FY68-83
periodare known, implyingthat significantly higher cost overruns/benefit
shortfallsmust occur in the future to yield the same overallsensitivity
results. To minimizerisk, the TarbelaProjectis beingmonitoredcon-
tinuouslywith the assistanceof an elaboratesystem of surveyingand record-
ing equipment. Also, GOP has agreed to establishadequateO&M arrangements
for Tarbelaand to arrangeregulardam inspections. It is hoped, therefore,
that with measuresalreadytaken or planned,includinginvestments under the
will be relativelyroutineand manageable. In addition,institutionbuilding
in terms of technicalassistanceand trainingcarriedout and continued
efiectively will reinforceand enhancethe utilizationof O&M capitalplant.
In additionto the immediatetask of ensuringthat the Projectis completed
and functionssatisfactorily, intensiveeffortswill be requiredto reap the
full benefitof the additionalirrigationwater from the Project. This will
require,inter alia, complementary downstreaminvestments, strengthening of
agricultural extensionservices,provisionsof inputs,improvement of water
managementand appropriategovernmentpricingpolicies. These requirements
are being addressedby other projectsassistedby the Bank as well as in the
contextof the on-goingStructuralAdjustmentLoan and Credit.


13.01 As previouslymentioned,the Bank has had three primarilyroles over

in the TarbelaProject. These
the long periodof involvement(1953-present)
primaryroles involved(1) settlementof water-relatedissuesbetween
Pakistanand India, (2) and
mobilizing administeringfunds,and (3) reviewof
technicalaspectsand the constructionprogram.
- 60 -

13.02 A number of seniorBank officialshave been involvedas well as

membersof projectand programstaffsand staff of Legal and Loan depart-
ments. In addition,the Bank employedtwo firms,Sir AlexanderGibb & Part-
ners, consultingengineers,and Coopers& Lybrand,charteredaccountants,
as describedin paras 5.09-5.10.

13.03 Althoughtherewere difficulttimesand seriousproblems,the overall

pictureand the resultare clearlya great success. Throughall of the
variousphasesand incidencesthe Bank performedwell and in particular
demonstratedthe flexibilityto adjustquicklyto changesand emergencies.

13.04 Some of the particularly

successfulsteps taken by the Bank were:

(a) The systemof contractorprequalification which was instituted

by the Bank in 1960 at the commencementof Indus Basin Project
and which is now a standardfor major constructionalmost
world-wide,and where TarbelaJoint Venturewas the selected
contractor,was importantto the successfulcompletionof Tar-
bela Dam and the remedial/repairprogram.

(b) Proceduresfor financialcontroland fund administration evolved

by the Bank for Indus Basin Project,where some Bank respon-
sibilitieswere assumedby Gibb, worked well at Tarbela.

(c) The remarkablesuccessof the Indus Basin Projectgeneratedthe

momentumand technicalbase for a smoothprogressionby the Bank
to fund mobilizationand administration, technicalreviewand
projectsupervisionfor the subsequentwork at Tarbela. This
continuousand broad involvement by Bank staffwas particularly
usefulwhen the emergencyoccurredin 1974 and in the subsequent
years of the remedial/repair
program. The Bank'spolicyand
systemof delegationalso worked smoothlywhere much of the work
on the projectwas dealt with at lower levelsin the Bank with
top managementpersonnelbeing directlyinvolvedonly at criti-
cal phases.

(d) In retrospect,it was clearlyimportantthatwhen the great

emergencyof the tunnelfailureoccurredin 1974 (para 7.01)
(1) attentionwas focusedon repairratherthan on assessing
blame and (2) the coordination
meetingsof all partiesinvolved
in the repairswere directedat agreeingon actionpointsand as
a resultservedthe invaluablepurposeof keepingattention
focusedon the repairwork so it was done expeditiously.

(e) Employmentof an engineeringconsultant(Gibb)servedmany

advantageouspurposes. It providedclose independenttechnical
review,monitoringof detailsof contractand fund administra-
tion,full-timeon-siterepresentation, providedcommunication
channels,assuredcompleterecordsand in particulardigested
the enumerabledetailsto direct the Bank'sactivitiesto the
significantand policyissues. The closeworkingrelationship
betweenGibb and Bank staffenabledthe Bank to exercise
influenceon administrationof the projectwithoutinterference
with the normalrelationshipsof owner-consultant-contractor
- 61 -

terms of internationalcivil engineeringcontractprocedure. It

is clear that Gibb'swork and performancewas indispensable
the Bank's successas Administratorof TDF.

(f) Full-timeassignmentof a Bank headquartersprojectstaffperson

during the remedial/repair periodwas advantageousby givinga
single focus in the Bank, improvingBank coordination,giving
quick Bank analysisand responseto emergenciesand avoiding
dividedresponsibility and part-timeparticipationin this very
significantand complexproject.


14.01 The entireIndus Basin Projectstandsas a monumentto international

cooperativeeffort,in a largepart guidedby the Bank.

14.02 The immensesystemof replacement works consistingof ManglaDam, six

barragesand eight link canalswas constructedduringthe period1961-68;
completionin March 1968was two years ahead of the Treatydeadline. The
cost was US$1,086M. No other projectof such size and complexityhad been
constructedin such record time.

14.03 TarbelaDam, the last and largeststructureof all was begun in 1968
and also stayedon schedule. Bringingit into operationwas delayedby one
year, from 1974 to 1975, by the unexpectedand largedamageson initial
fillingof the reservoir(para7.01). But the continuedinternational
cooperativeeffort,focusedby all partieson the changedsituation,enabled
the work of repairand completionto continuewithoutdelay and without
interruptingthe operationof the Tarbelafacilitiesto producenew water
suppliesand electricpower.

14.04 The projecthas been as productiveas envisionedand has achievedits

objectivesof water storageand power generationand its economicrate of
returnis at least equal to the feasibilitystudyestimate(para12.04).

14.05 The advantageof experienced(pre-qualified) contractors,selectedby

international tendering,with accessto the best new equipmenton the world
market and with inducementof a well plannedbonus schemehas been clearly
demonstrated at Tarbela.

14.06 The response,assistanceand cooperationof the donor communitywas

superb. Particularly helpfulwas their willingnessto place the money at the
disposalof the Bank as a commonpool. The resultingflexibility in manage-
ment of TDF was needed and useful duringthe periodsof emergencyand during
the remedial/repairprogram. A lessonlearnedis that for such a large
project,with numerousdonors,a commonpool of fundsresultsin more
flexiblefund managementto the advantagesof the project(para5.02).

14.07 Managementof "tied"funds requiredadditionalwork and controlbut

no other significantproblemswere created. In futureprojectswhere tied
funds are managed,contractdocumentsshouldcontainreferenceto this type
- 62 -

of funding and the extra documentation required to be provided by the Con-

tractor (ANNEX4, p.1).

14.08 The organizational which includedagreementson
controland Fund management(paras5.13 et seq.)workedwell
at Tarbela.

14.09 The group of projectconsultants(bott firmsand individuals) should

be closelyintegratedwith the engineeringof the projectand shouldhave
capabilityto handle all aspectsof the project. To assurethis the termsof
referenceand the workingarrangementsshouldbe reviewedregularlyto take
accountof changingcircumstances and changingneeds.

14.10 The Bank was greatlyassistedas Administrator of IBDF and TDF by Sir
AlexanderGibb & Partnersand employmentof a similarconsultantwith similar
roles shouldbe consideredin the futurefor large projectswhere the Bank
has major involvement.

14.11 The importanceof the continuityand availability of experiencedlong

servicestaff to bridgebetweerkand relate past circumstances,decisionsand
actions to currentproblems,cannotbe over-emphasized in the case of large
projectswhere planning,design,construction and bringinginto operation
extend over a long period.

14.12 The experienceof the accidentsat Tarbelain 1974 raised significant

questionsconcerningtraditionalinsuranceconceptsand practicesfor major
civilworks. These questionswere consideredat a specialseminarsponsored
by FIDIC in June 1978. Keypointhwhich emerged(ANNEX3) were: the tradi-
tionalCAR policymay not adequatelyprotectlarge and complexprojects;
other insuranceoptionsmay be available;non-insurance is an optionthat
shouldbe considered;and, retaining specializedand independent insurance
consultantsshouldbe considered. A subsequent"StatusReportw issuedin
December1981 by the FIDIC ProjectInsuranceSteeringCommitteerecommended,
inter-alia:that prior to finalizationof tenderdocuments,projectowners
appointduly qualifiedrisk managementadviserswhose fees would be financed
from project-related loans;that provisobe insertedin the FIDIC Contract
Conditionsgiving the owner the option of effectinga projectinsurance
program; that changes be made in the languagequalifyingexceptedrisk con-
cerningdesign;and that thereis a need for a broaderand more flexible
approachin the future especiallywith regard to designcover.

14.13 The problemsat Tarbelacan now be seen to have been for the most
at the then existinglevelsof knowledge
part exceptionaland unforeseeable
and experience.

14.14 The restrospect, the full, potentiallydamaging,effectof the large

quantitiesand high velocitiesof water on structureson such complexand
adversegeologyhad not been fully appreciated.

14.15 The ad hoc proceduresset up to meet the emergencysituationworked

well and enabledthe projectto come into operationwith the minimumof
delay. In dealingwith emergencies, un-minutedcoordination meetingsof all
parties,with only actionpoints being recorded,serveda valuablepurposein
gettingremedialwork done expeditiously(para5.15).
- 63 -

14.16 There should have been more planning and provision for O&M,including
funds for O&M facilities, equipment, spare parts and supplies, together with
preparation for O&M including staffing and training (para 8.06).

14.17 GOP/WAPDA need to reassess existing policies so sufficient inducement

is given by way of adequate and equitable remuneration and career promotiou
prospects to ensure that experienced staff are continuously available at all
levels, reflecting the unique and critical importance of the project (para

14.18 The key to the long-term safety of Tarbela lies in the hands of the
O&Morganization. Close attention, regular inspections, strong management,
adequate financial resources and national recognition of the unique and
critical nature of Tarbela will clearly be required to develop and carry out
the necessarily strong O&Mprogram (para 9.03).

14.19 Recently completed studies indicate the possible need for some addi-
tional future capital works in the mid to late 1980s. These include addi-
tional protection of the plunge pool of the Service Spillway, strengthening
of piers and hoist towers, means to restrain or manage the sediment delta in
the event of an earthquake and contingency plans to unclog tunnels should
they be blocked by a sediment slide (para 8.07).

14.20 Tarbela has made significant contributions to engineering knowledge,

design and construction. Some of the most significant (para 6.13) relate to
the use of rollcrete, the design and construction of large capacity gates and
stilling basins for low level outlets, the use of steel-fiber concrete, the
design, construction, monitoring and performance of soil blankets to control
reservoir seepage and detection and the treatment of sinkholes.

14.21 Tarbela Dam Project has made all planned water deliveries since 1975
and all planned production of electric power since 1976 in spite of the great
activity and demands of the remedial/repair program (para 9.01).

14.22 The new water supplies made available by Tarbela have not yet been
fully Integrated into the nation's water system. Further, complementary
programs for increasing agricultural production have moved slowly (para

14.23 If a Tarbela-like emergency situation should occur in the future,

consideration should be given to the four following essential activities:

(a) quick decisive response to save the project;

(b) quick mobilization of funds;

(c) full and cooperative use of all technical expertise; and

(d) fully adequate and continuously available staff to assure that

design modifications, model testing and comparison of alterna-
tive solutions, stays well ahead of the construction program.
It is important that the replaced or revised facilities are the
proper ones and although project safety is the over-riding
- 64 -

consideration,the need to find the economicsolutionis impor-

tant. The properand economicsolutioncan only be foundby
analyzingall alternatives.
- 65 - ANNEXI
Page 1



Description of Major Project Facilities

Main Embankment Dam and Blanket. The main embankment dam has a
maximumheightof 143 m (470 ft) and a crest lengthof 2,740m (9,000ft).
The dam has a slopingimperviouscore supportedby well gradedgranular
shells. The core is a blend of angularcobblegraveland silt. Integral
with the dam, as an extensionof the imperviouscore, is an upstreamblanket
covering nearly 500 ha (1,235 ac) of the reservoirfloor. The blanket
providesunder-seepage controlfor the foundationof the dam which is com-
posed of deep alluvialdepositsof cobble graveland sand up to 210 a
(700 ft) deep. The upstream shells are of granular material and
free-draining for stabilization of the upstreamslope on reservoirdrawdown.
The upstreamslope is protectedagainstwave actionby riprap. Downstream
zones interceptdrainageand seepageand supportthe core. The downstream
slope is protectedagainstrain water erosionby a layerof stableand
free-draining material.

AuxiliaryDam No. 1. This dam closesa saddlein the left reservoir

rim where a secondarychannelin a naturalside valley,the Dal Darrachan-
nel, circlesthe left abutmentof the main dam. The dam is similarin
cross-section to the main dam with a sloping core and an upstream blanket.

Auxiliary Dam No. 2. This relatively small dam closes a low saddle
between the Auxiliary and Service Spillways. Its cross-section is similar
to the main dam exceptit has a steepercore in contactwith the rock founda-
tion, with no upstreamblanket.

Tunnels. The projectincludesfive tunnels,four throughthe right

abutmentand one throughthe left reservoirrim betweenthe two spillways.
The four half-milelong right bank tunnels,each 13.7m (45 ft) in diameter,
followgentlycurvedalignmentsthroughthe rock of the right abutment. At
about mid-lengththe tunnelshave serviceand bulkheadgateswhich operatein
gate shaftsextendingup to a gate operationstructurelocatedwell above the
maximumreservoirlevel. Tunnel No. 1 is connectedto the first-stage power-
house with generatingunits 1 to 4. TunnelNo. 2 is connectedto the
extendedpowerhousewith units 5 to 8. Units 9 and 10, in a furtherexten-
sion of the powerhouse,also will receivewater from TunnelNo. 2 on comple-
tion of constructionin 1985. Tunnels3 and 4 are presentlyused for the
releaseof irrigationwater but may eventuallybe developedfor power. The
left bank tunnel,also 13.7m in diameter,was constructed on the initiative
of GOP/WAPDAto augmentirrigationreleasecapacityin the May-Julyperiod
- 66 -
Page 2

when the reservoiris at low level. It has providedinvaluableoperational

flexibility.It was separatelyfundedby GOP, engineeredby TAMS and NESPAK
and constructedby a Pakistanibased consortiumincludingTJV.

Spillways. The Serviceand AuxiliarySpillwaysare locatedalong the

left rim of the reservoirand dischargeinto plungepoolsand thenceinto the
side valleywhich returnsto the IndusRiver downstreamof the main dam. The
spillwayshave conventionaloverflowcrestscontrolledby radial6ate3. The
ServiceSpillwayhas seven gates and a dischargecapacityof 17,400m /sec
(615,000cfs) at full pool level The AuxiliarySpillwayhas nine gatesand
a dischargecapacityof 22,500a /sec (795,000cfs) at full pool level.

Reservoir. The reservoirimpoundedby TarbelaDam, has, at full

storagelevel,a volume of 11.1M acre-feet(13.7BCM), a lengthof about 50
miles (80 km) and a water surfacearea of over 100 sq mi (25,900ha). Its
maximumdepth is more than 450 feet (137m).

Power Plant. The power installationincludesa powerhousewith eight

turbinegeneratorunits each with 175 KW nominalrated capacity. Two addi-
tionalunits of the same capacitywill begin operationin 1985 to give a
total capacityof 1,750MW. Presentplansare to increasethe totalcapacity
to over 2,800MW with a powerhouseon TunnelNo. 3. Studiesalso have been
made suggestingthat additionalcapacityof about 1,000MW could be gained by
a powerhouseon TunnelNo. 4. A switchyardis locatedon a filledarea
alongsidethe tailrace,oppositethe powerhouse. The powerplant,switchyard
and transmission facilitieswere financedwith separatefunds rot involving
the World Bank and under separatecontracts. TarbelaPower Plantwith its
presenteightunits representsabout 30 percentof the nations totalelectric
productioncapacityand about 40% of WAPDA'scapacity.
- 67 - Page 1



Tarbela Project Statisticsand InternationalComparisons


Location Northwest of Rawalpindi 40 air miles

Construction Period
Beginning of Construction November 1968
Stage I, River in Natural bed 2-1/2 years
Stage II, River in Excavated Channel 3 years
Stage III, River Diverted through
Tunnels 1 year
Complete Initial Power Installation 1-1/2 years
Total 8 years

Retention Level (Maximum Storage) 472.44 m 1,550 feet SPD 1/
Drawdown Level
Design (Dead Storage Level) 396.24 m 1,300 feet SPD
Assumed for Turbine Operation
(Minimum Power Level) 405.99 m 1,332 feet SPD
Storage Volume:
At Elevation 1,550 feet (472.42 m) 13.7 BCM 11.1 MAF
At Elevation 1,332 feet (405.97 m) 3.1 BCM 2.5 MAF
At Elevation 1,300 feet (396.22 m) 2.2 BCM 1.8 MAF
leAngthof Reservoir 80.0 km 50 miles
Maximum Width of Reservoir
(Excluding Siran Arm) 4.8 km 3 miles
Maximum Depth 137.0 + m 450 + feet

Main Dan
Type - Earth and rockfill with
impervious cores; foundation
seepage control by upstream
impervious blanket and downstream
relief wells.

1/ Standard Pakistan Datum (based on mean sea level at Karachi).

-68- ANNEX2
Page 2

Crest Elevation 477.01m 1,565feet SPD

Crest Length 2,743m 9,000 feet
MaximumHeight 143 m 470 feet
Side Slopes
Upstream 1 in 2.65 -
Downstream 1 in 2.0 -
Volume,IncludingBlanket 126 mcm 165 million cu yds
Lengthof Blanket 2,147m 7,700 feet
At Dam 14 m 45 feet
UpstreamEnd 3m 10 feet

AuxiliaryDam No. 1
Type - Earth and rockfill founded
on alluviumwith slopingimpervious
core and blanketextendingto
Crest Elevation 477.01m 1,565feet SPD
CrestLength 713 m 2,340 feet
MaximumHeight 105 m 345 feet
Side Slopes
Upstream 1 in 2.65 -
Downstream 1 in 2.0 -
Volume 15 mcm 20 millioncu yds

AuxiliaryDam No. 2
Type - Earth and rockfill founded
on rock with imperviouscore to
Crest Elevation 477.01m 1,565feet SPD
Crest Length 262 m 860 feet
MaximumHeight 68.58m 225 feet
Volume 1.5 mcm 2 millioncu yds

Spillways (Two)
Type - Gated channels forming
Serviceand Auxiliaryspillways
excavatedin the rock on the
left bank,concrete-lined from
their crests to flip-buckets,
lined plungepools with outfall
channelto the river.
Crest level 454.76m 1,492feet SPD
Service Spillway (7) 15.24 x 17.68 m 50 x 58 ft
AuxiliarySpillay(9) 15.24x 17.68 m 50 x 58 ft
DischargeCapacityat Elevation
1550feet (472.42m)
ServiceSpillway 18,400cumecs 650,000cusecs
AuxiliarySpillway 23,800cumecs 840,000cusecs
- 69 - ANNEX2
Page 3

MaximumInflow 60,237 cumecs 2,127,000 cusecs
At Elevation1,500feet (472.42 m) 42,200 cumecs 1,490,000 cusec8
At Elevation1*556*8 feet (474.49 m) 47,295 cumecs 1,670,000 cusecs
MaximumFloodsof Recordat Attock
August 27-30, 1929 (Gauged) 24,780 cumecs 875,000cusecs
1841- GreatestKnown (Estimated) 56,640cumecs 2,000,000 cusecs

Four concrete-lined
tunnels,each 45
feet (13.7 m) diameter up to gate
2,400 to 2,700 feet (730
to 820 m) long. Service gates - two
13.5 feet x 45 feet (4.1 x 13.7 m)
fixed-wheelgates in each tunnelplus
two bulkheadgates of same size
upstreamof servicegates. Tunnels1,
2 and 3 steel-lineddownstreamof gate
structure,43.5 feet (13*3 m) diameter.
Tunnel 4, steel-lineddownstreamof gate
structure,36 feet (11 m) diameter.
Tunnel4 controlledfor irrigation
releasesby two 16 feet wide x 24 feet
(4.9x 7.3 m) high radial gates at
downstreamend. Tunnel 3 similarly
IntakeSill Levels
Tunnels1 and 2 373.38 m 1,225 feet SPD
Tunnels3 and 4 353.57 m 1,160feet SPD
At Elevation1,300 feet 1,770 cumecs 62,500 cusecs
At Elevation1,332 feet 1,883 cumecs 66,500 cusecs
EstimatedDischargeCapacityof each
of Three PowerTunnels (Controlled
by Four Turbine-bypass Valve Units)
At Elevation1,300feet 493 cumecs 17,400cusecs
At Elevation1,332 feet 538 cumecs 19,000cusecs
one IrrigationTunnel plus 10 Turbine-
bypassValve Units
At Elevation1,300 feet 3,002 cumecs 106,000cusecs
At Elevation1,332 feet 3,285 cumecs 116,000 cusecs
At Elevation1,492 feet 4,361 cumecs 154,000 cusecs
- 70 - ANNEX2
Page 4

AdditionalLeft Bank IrrigationTunnel

Similarto Tunnel4 with Supplementary
DischargeCapacityat 1,500feet SPD
(457.18m) 2,282cumecs 80,580cusecs

Power Plant
PresentInstallation- 8 turbine
generatorunits, 4 each on tunnels
1 and 2. Two additionalunits on
Tunnel 2 to be completedin 1985.
Turbines- Francistype, 239,000HP
at 136.4 rev/minat 378 feet (115m)
net designhead.
Generators- Rated 175 MW but capable
of 15 percentcontinuousover load
MaximumNormalTailwaterElevation 339.83m 1,115feet SPD
MinimumTailwaterElevation(1 Unit) 335.26m 1,110feet SPD
MaximumNet Head 133.19m 437 feet
MinimumNet Head 55.77m 183 feet


1. Tarbelais the world'slargestvolumedam:

(a) Tarbela(1975) 122 mcm (186millioncu yds)

(b) Fort Peck (USA) (1940) 96 mcm (126 millioncu yds)
(c) Oahe (USA) (1960) 70 mcm ( 92 millioncu yds)
(d) Mangla(Pakistan)(1967) 66 mcm ( 86 millioncu yds)
(e) Gardiner(Canada)(1968) 65 mcm ( 86 millioncu yds)
(f) Afslvitdijk(Netherlands)
(1932) 63 mcm ( 84 millioncu yds)
(g) Oroville(USA) (1968) 60 mcm ( 78 millioncu yds)
2. Tarbelais the world'sseventhhighestembankmentdam.

Rogunsky(USSR)under construction 325 m (1,066feet) for 1985

Nurek (USSR)under constrution 317 m (1,040feet) completion
(a) Chiooasen(Mexico)(1977) 240 m ( 776 feet)
(b) Oroville(USA) (1968) 235 m ( 770 feet)
(c) Bennett(Canada)(1967) 183 m ( 600 feet)
(d) Trinity (USA) (1962) 164 m ( 537 feet)
(e) Gespatch(Austria)(1965) 153 m ( 500 feet)
(f) Infiernillo(Mexico)(1967) 140 m ( 492 feet)
(g) Tarbela(1976) 143 m ( 470 feet)

1/ As of 1980.
- 71 - ANNEX 2
Page 5

3. Of the w:rld'slargestembankmentdams, Tarbelahas the largestspillway


(a) Tarbela(1976) 42,200m3 /s (1,490,000cusecs)

(b) Mangla (Pakistau)(1967) 31,000m3/s (1,100,000cusecs)
(c) Oahe (USA) (1960) 24,200m 3/s ( 850,000cusecs)
(d) Garrison(USA) (1956) 23,400m /s ( 840,000cusecs)
(e) Fort Randall(USA)(1956) 17,560m 3 /s ( 630,000cuseCs)
(f) High Aswai (Egypt)with 37,000
million m of flood
controlcapacity) 2,300m Is ( 81,200cusecs)

4. Of large embankmentdams employingan upstreamblanket,Tarbelais nearly

two and a half ti.mes
as high as the next largest,and three timesas high as
the next largestwhen designed. High Aswan is not strictlycomparable(60 m
deep grout curtainand blanketwithinthe dam), nor are Arrow and Fort Randall
which are constructedover openworkgravels.

(a) Tarbela(1976) 143 m (470ft) 2,200m (7,200ft) blanket

(b) Arrow (Canada)(1967) 58 m (190 ff) 915 m (3,000ft) blanket
(c) Fort Randal (USA) (1956) 49 m (160 ft) 760 m (2,500ft) blanket
(d) High Aswan (Egypt)(1970) 111 m (364 ft) 210 m ( 690 ft) blanket

5. The plungepool energy dissipation,even for the only part flows

obtaining,is believedto be the greatestin the world for man-madeplunge

ServiceSpillwayat 294,000cusecs,11 millionH1 1/
AuxiliarySpillwayat 240,000cusecs,9 millionHP 1/
cf. Kariba (Rhodesia)at 213,000cusecs,7.2 millionHP.

6. The tunnelsare uncommonlylarge in sectionand excavatedvolume.

4 Tunnels 13.7m (45 ft) diameteru/s, 730 and 820 m
(2,400and 2,700ft) long. (17.4m (57 ft)
Excavation 820,000m 3 (1,090,000cu yds)
Concrete 390,000m (520,000cu yds)
SteelRibs and Lining 20,000tons

1/ The designcalls for dissipationof 24 and 32 millionHP for short

periodsat full dischargein the eventof a 'designflood'.
- 72 -
Page 6

cf. Mangla:
5 Tunnels 9, 9.4 and 7.9 m (30, 31 and 26 ft) diam.
475 m (1,560 ft) long

Excavation 225,000m3 (300,000cu yds)

Concrete 111,000m3 (148,000cu yds)
Steel Lining 13,000tons

7. The 13.3m (43.5 ft) diametersteel tunnel linerswere the largestever

made as were the radialirrigationoutlet gates 7.3 m high x 4.9 m wide
(24 x 16 ft) actingunder 132 m (433 ft) head.

8. The stillingbasins for tunneloutletsat Tarbelaare uniqueenergydissi-

pators for low-leveloutlets. Basinsof comparableintensityof energydLssi-
pation had previouslyonly been employedat the foot of spillwaysin large

(a) Tarbela (470 ft) (low level outlets,T3 and T4) (1976)
95,000cusecs(Q max) 791 cusecs/ft(q) 120 ft wide.

(b) Dworshak(717 ft) (for outletsand spillwayat foot of dam)

(1974)(USA)45,000 cusecs(Q max) 351 cusecs/ft(q)
114 ft wide. 190,000cusecsmaximum,but hydraulic
pump washesout at 45,000cusecs.

(c) Bhakra (742 ft) (on spillwayat foot of dam) (1963)(India)

290,000cusecs (Q max) 1,115cusecs/ft(q) 260 ft wide.

(d) Rihand (305 ft) (on spillwayat foot of dam) (1962)(India)

455,000cusecs (Q max) 685 cusecs/ft(q) 664 ft wide.

(e) Folsom (341 ft) (on spillwayat foot of dam) (1956)(USA)

250,000cusecs (Q max), 1,033cusecs/ft(q) 242 ft wide.

9. Tarbelawas constructed(1968-75)under the largestcivil engineering

contractever awarded. Many aspectsof the projectwere on, or beyond,the
boundariesof then presentexperiencewhich sometimesrequireduntried
techniquesin solvingthe problemsassociatedwith some features.
- 73- ANNEX3
Page 1



Reviewby FIDIC of TraditionalInsuranceCoverage

Becauseof the size and complexity of the project and the problems
that arose followingthe 1974 damages,the Tarbelainsuranceexperience
induceda criticalreviewof the adequacyof the traditional insuranceregime
for major civil works. In this connection,FIDICsponsoreda specialseminar
on insurancefo- major civilworks in June 1978, in which representatives of
the insurance,consultingand contractingindustriesas well as of ownersand
international agenciesparticipated.The main areas of concernon the
generalsubjectof insuringdam riskscan be summarizedas follows:

- exposure of owners to risks excluded from insurance policies and

risks fallingbetweenpolicies,and especiallythe problemof
establishingfortuityand the exclusionof designerror;

- uncertaintyof cover resultingfrom difficultyin interpretation

of insurancepolicies;

- costsof effectingnumerousinsurancepolicieson any one


- delaysin settlementof claims,and the cost of recoveryof


The standardCAR (Contractors All Risks)insurancepolicycontains

certainexclusions;in particular,it does not provideprotectionagainst
designrisks,on the reasoningthat defectivedesignis the responsibility of
the designengineerand not of the contractor. Thus, to avoid liability
under such a policy it is sufficientfor the insurerto demonstratethat the
designwas unsuitable;however,in order for the owner to hold the design
engineerliableit would be necessaryto prove that the designwas not merely
defectivebut also negligent. Furthermore, even if the designengineercould
be held liable,he would generallynot have the resources,and could not
obtain insuranceprotectionto the extentrequired,to indemnifyan owner
againstsubstantialloss in a largeand costlyproject.

Severalspeakersat the FIDICseminarquestionedwhetherCAR coverage

was suitablefor large scale dam projects,while others stressedthat the
internationalmarketmay have inherentlimitations in providingcomprehensive
coveragefor large scale civil works projectsat reasonablepricesand that
the presentFIDICstandardConditionof Contracthave served the civil works
- 74 -
Page 2

indistry,as well as owners,relativelywell for over a quartercentury.

StillothersadvocatedOwner ProcuredInsurance(OPI)as a means of premium
savirgs,minimizingconflictsof interest,and even extendingthe horizonsof
the traditionalCAR cover to includedesign errors.

It should be noted that the Bank itselfdoes not insiston its bor-
rowersobtainingCAR or any otherspecifictype of insurance. However,FIDIC
StandardConditionsof Contract(International) for Works of Civil Engineer-
ing Construction,includingthe latestedition(March1977) (whichis fre-
quentlyused by Bank borrowers),does requirethat the contractorplace such

The pointswhich emergedfrom the professioral

debatewhich ensued
from the Tarbelaexperiencewere:

(a) largeand complexprojects,particularly those on th.ifrontiers

of technology,may not be adequatelyprotectedby the traditional
CAR policy;

(b) as a resultof advancesin the market since the Tarbelainsurance

was placed,OPI and other insuranceoptionsmay becomeavailable
as alternativesto the traditionalCAR Policy;

(c) the decisionto insureshouldnot be taken for granted. Non-

insuranceis an option to be consideredon the basis of careful
assessmentof the risksand the willingnessand/orabilityof
the owners to carry such risks,and the willingness
of the
financialbackersto financeprojectsin these conditions; and

(d) prospectiveownersof largescale high-risk,civilworks projects

may considerretainingspecialized and independentinsurance
consultantsto participatein the analysisof projectrisks,
to adviseabout the potentialsand limitationsof available
insuranceoptions,and, if requiredby the owner,to assist
in preparingan insurancepackage.

In December1981 the FIDIC ProjectInsuranceSteeringCommittee

issueda "StatusReport". The reportdeals with projectsin thich the civil
engineeringcontractaccountsfor the major part of the totalcosts. The
conclusionsof the Committeewere:


1. The Committeeis concernedat the wide rangeof situationsin

which one or more of the partiesin a civilengineeringproject
may not be adequatelyprotectedfor theirrespectiveresponsibili-
ties or liabilitiesby insurance. Some of thesesituationshave
developedin the past and have led to disputesand to financial
embarassment.On futureprojects,thesesituationsare likely
to have even more seriousconsequences.There is an urgentneed
for reducingthe areas of insuranceshortfall.
- 75 - ANNEX 3
Page 3

2. To ensure betterappreciation
of and provisionfor the risks
associatedwith the construction
of major (and/orcomplex)civil
engiaeeringprojects,the Committeerecommends:

- that prior to finalization

of TenderDocuments,Ownersof
such projectsappointfullyqualifiedRisk ManagementAdvisers.

- that LendingInstitutionsallow fees payableto Risk

ManagementAdvisersfor initialand ongoingservicesto be
financedfrom project-related

- that a provisobe insertedin the FIDICContractConditions

which gives the Owner the optionof effectinga project

- that consideration be given to omittingthe word "solely"

from the exceptedrisk concerningdLsign. Althoughit
could not be claimedthat thiswould removeall contention,
it shouldreducethe possibility. In doing so, however,
one would reducethe responsibility of the Contractorand
increasethe exposureto the Owner. This underlinesthe
need for broaderprovisionof cover,particularly for the
Owner'sdesignexposure. At the same time,Contractors'
contractualliabilityfor damage to workswill then more
closelyequatewith the ContractWorks insurancecover
that they are able to purchase.

3. The Committeerecognizethat the insuranceindustryhas

traditionally given a constructiveresponseto requestsfor
extendedor new forms of coveragewhenevertherewas a
reasonableexpectationthat sufficientdemand for such
covers would developover time at adequatepremiumlevels.

It is recommendedthat all partiesconcernedand in particular

Risk ManagementAdvisersand InsuranceBrokersimpressupon
the insurancemarket the need for a broaderand more flexible
approachin the futureespeciallywith regardto designcover.

4. The Committeeconsidersthat the timelyappointmentof Risk

ManagementAdvisersfor a growingnumberof civil engineering
projectewill ensure that the insuranceneedsof all interested
partieswill be properlyappraisedat an early date and will be
presentedto Insurersin such a manner as to enableInsurersto
meet these needs.

End of Quote.
- 76 - Page 1



Tarbela Financial Program

Following the completion of the report justifying a dam on the Indus

River at Tarbela(ANNEX7, item 4), the Bank agreedin accordancewit 1 l the
termsof the 1964 Supplemental Agreementthat the balancefrom IBDF estimated
at US$318million,would be availablefor the construction of TarbelaDam.
There then remainedthe problemof whether sufficientexternalcontributions
would be forthcomingto completethe financingplan for the TarbelaProject
estimatedto cost US$827.5million in total of which US$492millionwas the

Discussions with membersof the Pakistanconsortiumindicatedthat

some US$99 million equivalent could be provided within their aid programs for
Pakistan, but this amount togetherwith IBDF balancewas not sufficientto
cover the estimated foreign exchangerequirement.

The US Government through Export-Import Bank and the Bank then

offered to providefinancingon normal terms to Pakistanin the amountof
US$75million to completethe financingplan. However,this was to be
residualfinancingwhichwould be cancelledor refundedif not needed.

The TarbelaDevelopment Fund Agreement1968 was formulatedon this

financingplan. The Agreementprovidedthat the IBDF balancewould be the
primarysourceof funds for the Project and would be treatedas the basic
working capitalof the Fund. The contributions from Canada,France,Italy
and the UnitedKingdomwere initiallyfor expenditure within each country
only (tied),I/ and amountedto an aggregateof US$99millionequivalentand
would be availableas a secondsourceof funds. The US contributionof US$50
miilion(for purchasesin the UnitedStates)and the Bank contributionof
US$25 millionequivalentwould providethe third sourceof financingto the
extent that the other two sourceswere insufficient.All rupee expenditures
would be met by contributionsfrom Pakistan.

1/ Managementof "tied"funds requiredadditionalwork and controlbut no

other significantproblemswere created. In futureprojectswhere tied
fundsare managed,contractdocumentsshouldcontainreferenceto this
type of fundingand the extra documentationrequiredto be providedby
the Contractorin a similarmanner to the "SpecialPlant" requirements
set out in the basic Tarbelaconstructioncontractdocuments(Contract
651). If detailsof documentation requiredare not known, then a general
referencewould sufficeso the Contractoris aware that he has an obliga-
tion to providethe necessaryadditionalpaperworkin order to obtain
releaseof the tied monies.
- 77 - ANNEX 4
Page 2

The Projectfinancingplan excludedcosts of land acquisition

resettlementand the purchaseof the power equipment.

The successfulbid for constructionof the civilengineeringworks

awardedto TarbelaJointVenture (para6.03) containeda foreigncurrency
requirementequivalentto US$360million. Althoughthis amountwas well
below the totalof contributions offeredto TDF, togetherwith the IBDF
balance,the total costs of the Projectto be met from TDF requiredto take
accountof the foreigncurrencyportionof other costsnamely:

(a) Preliminaryworks not previouslypaid for from the IBDF prior

to the signingof the TarbelaAgreementon May 2, 1968.

(b) Other construction costs, includingthe cost of thosesupply

contractsreimbursable from the TDF, bonuswhich might be earned
by the main contractorand allowancefor any contingencies
which might occur duringthe construction period.

(c) Engineeringand site costs,coveringWAPDA'scostsand the costs

of WAPDA'sProjectConsultants(TAMS)and also their General
Consultants (Harza).

(d) Miscellaneousoff site costs,and the cost of IBRD'ssupervision

of the project,includingthe Administrator's technicaland

As statedabove, the March 1968 financingplan estimatedthe total

cost of Tarbelaat US$827.5milllonincludinga foreigncurrencyelementof
US$492million. However,these figuresincludedan allowancefor preliminary
works, the cost of part of which was to be met by GOP for rupeeexpenditures
and from IBDF for the foreigncurrency. This latteramountedto US$8 mil-
lion. The projectcost estimatewas subjectto revisionfollowinga review
by the Administrator's Consultants at the beginningof each year. The
estimateof January1974,prior to the first fillingof the reservoirand the
resultantextensiveremedialworks, increasedthe totalcost to US$954mil-
lion, of which US$523.3millionwas the foreignexchangecontent. This
amountedto an increasein total of US$51.5million,of which US$39.3million
was in foreigncurrency. Breakingthe cost down under the headingsabove,
a comparisonof the allowancesunder the originalfinancingplan and the
January 1974estimateare as follows:
- 78- Page 3

March 1968 January1974

FinancingPlan Estimate
Total FC Total FC

(a) Preliminary Works 32.0 12.0 17.4 1.7

(b) Construction Costs,etc. 751.2 455.0 855.7 478.5
(c) Engineering& Site Costs 40.3 22.0 74.1 40.1
(d) Misc.Off Site Costs,WAPDA
H.Q. Costs & IBRD Supervision 4.0 3.0 6.8 3.0
827 C & 492. 1r
(e) DeductPreliminary Works Paid
LC by WAPDA & FC from IBDF
prior to May 2, 1968 24.0 8.0 -
803.5 484.0 95WZ0 T2Y5.
At this time (January1974) the balanceof foreigncurrencyestimated
as being availablefor transferfrom IBDF, US$318millionhad risen by US$24
millionto US$342 million. This increasetogetherwith incomeon investments
of US$7millionand the increasein the dollarequivalentvaluationof the
contribution from Canada,France,Italy and the UnitedKingdom broughtthe
total foreignexchangeresourcesof TDF to US$526million. However.this
figureassumedthat all the tied bilateralaid would be used and at the time
this seemedunlikely. The effectof fluctuatingexchangerates of the for-
eign currencycontributions to the US dollarhad increasedthe originalUS$
equivalentvalue of these contributions by US$3million. This figureallowed
for agreementby France to increasingtheir contribution to the original
dollarequivalentvalue followingthe re-evaluation of the FrenchFranc in
1970. On the basis of the conditionsapplyingto the usage of tied aid it
was estimatedthat the total resourceswould be reducedby US$3million,thus
the totalforeigncurrencyfunds availablewere US$523million.

It appeared,therefore,that the financialresourceswere adequateto

meet the estimatedcost of completingthe Project. Howeverthe damageto the
outletsand collapseof tunnel2 in August 1974 requiredurgentremedial
measuresto renderthe Projectsafe before the next flood season. This
requirementled to re-assessment of the financialneeds to completethe
Projectand althoughthe full extentof damagecould not be assesseduntil
drawdownhad been completed,preliminaryestimatesmade it clear that con-
siderableadditionalfinancewould be required. Insuranceclaims had been
initiated(para 5.21), but it was appreciatedthe negotiationscould be
protractedand the immediateproblemwas to ensarethat sufficientuntied
non-rupeeresourceswere availableto carry out the necessaryrepairs. Con-
sequently,the contributingGovernments were advisedof the situationand
negotiationsled to the Tarbela Development Fund (Supplementary)
1975 being signedon August 15, 1975. Under this Agreement,specialcon-
tributionswere made by Australia(US$1.3million),Germany (US$6.0million),
Italy (US$7.2million),UK (US$4.9million),US (US$10.0million)and an IDA
Credit (US$8.0million)making a total contribution of US$37.4million.
These contributions were made for the purposeof meeting the costs of the
repairand additionalremedialworks as determinedby the Administrator under
Clause 1.07 of the Supplemental Agreementto ensure the promptand safe
completionof the Dam. The increasedcontributionto meet local currency
costswas met by the GOP. The initialestimatesof the cost of the work of
- 79 ANNEX 4
Page 4

restorationand additionalworks rangedfrom US$60 millionto US$80 million.

The total costs of the first stageof repairand additionalworks amounted
to US$70millionof which US$56millionwas the foreigncurrencycontent.
However,only part of thesecostswere coveredby the specialcontributions
which are estimatedto cost US$45millionin total,of which US$36million
was the estimatedforeigncurrencydisbursement.The balanceof the repair
and additionalwork costs have been met from the generalresourcesof TDF.

On completionof these repairand additionalworks, furtherproblems

arose in the stillingbasinsand in the plungepools of the spillways,once
more requiringadditionalfundswhich resultedin the secondSupplemental
Agreementof 1978. Under this Agreementadditionalcontributions were for
the purposeof helpingto meet, to the extentnecessary,the remainingcost
of completingthe Project. In addition,Pakistanexpectedto obtaina con-
tributionfrom Germanyand had obtainedassurancesof assistancefrom other
countries. Negotiations on the InsuranceClaimhad been continuingand final
settlementwas agreedin the amountof US$16million. Section1.08(a)of the
Supplemental Agreement1975 requiredPakistanto returnto TDF any amounts
recoveredfrom the Insurerson accountof the expendituresincurred. The
amount receivedwas to be creditedto each contributorpro-ratato its con-
tribution. However,as part of the InsuranceClaimwas for repairworks not
includedunder the determination made by the Administrator
and thereforepaid
for from the generalresourcesof the Fund, only US$13.45millionwas avail-
able for return. The allocationto each contributorwas:

US$ Millions

Australia 0.362
Germany 1.720
IDA 2.308
Italy 2.077
Pakistan 2.673
UnitedStates 2.883
UnitedKingdom 1.427
TotalAdjustedInsuranceRecovery 13.450

The 1975Agreementmade provisionfor alternativeoptionsfor dealing

with any moniesrecoveredby Pakistanfrom a numberof sources,including
insurance,but it was clear that the foreigncurrencyresourcesof TDF would
be insufficientto met the cost of the furtherworks,and discussions were
held with the contributorsas to the dispositionof each country'sshare of
the insurancerecovery. The GOP requestedthat the insurancerecoverieswere
creditedto the Fund. The United Statesand Australiarequiredtheirshare
to be repaidbut Australiamade arrangements for a separatecontributionto
TDF of an equivalentamount. The other contributors agreedto allow their
share of the recoveryto be returnedto TDF towardsfinancingcost of the
remainingworks. Pakistan'sshareof $2.67millionplus $0.5 millionof the
insurancerecoveryof US$2.55 millionpayableto TDF were allocatedfor
purchaseof urgentlyneeded operationand maintenanceequipment.

As mentionedabove, the contributions

from the Saudi,Kuwaitand part
of the Abu DhabiFunds are being receivedinto TDF on a reimbursement
and not as directcontributions.This raisedcertaincomplications and
- 80 - ANNEX
Page 45

reqairedproceduresto be greed with each fund. For the spillwayremedial

works, contractswere alreadyin existenceprior to the new loans being
signedand a portionof the non-rupeefinancingwas stillcoming from TDF.
For theseworks,once the contractsand existingvariationordershad been
acceptedas beingwithin the list of good, the reimbursements followedsatis-
factorily. However,for the conversionof stillingbasin No. 4 (Tunnel4
outletworks),for which the non-rupeefinancewas to come entirelyfrom the
Saudi and Kuwaitfunds,the procedureshave been less straightforward.
Discussions betweenthe officialsof the Saudifund and the Pakistanidelega-
tion early in 1980 had clarifiedthat direct paymentsfrom this fund to the
coLtractorcould not be made in less than 45 days from receiptof the
applicationfor payment. This time was well in excessof the contractual
limitof 30 days from receiptof the engineer'scertificateset out in the
contractfor the Tunnel 4 outletworks, Such delays in paymentbesides the
contractualimplications, could have had an adverseeffecton the execution
of the works. WAPDA, therefore,requestedand the Administrator agreed that,
in the interestsof the projectand on the understanding that the Government
of Pakistanwould meet any shortfallin non-rupeefinancing,bridgingfinance
for this contractcould be providedup to a maximumof US$ 7 M. This limit
was computedfrom the assumedcash-flow,basedon the estimatedpaymentsto
the contractor,allowingthree monthsbetweenthe date of disbursementfrom
TDF to the date of receiptof reimbursement from SDF.

Generally,the procedureshave worked satisfactorily but therehave

been problemsresultingin delays in receiptof reimbursements exceedingthe
three monthsanticipated. Some delayshave occureddue to late submissionof
applicationsbut the main problemhas arisenfrom insufficient or late infor-
mationbeing providedby WAPDA to show the changesto the originalapproved
contractfor approvalby the fundingagencyprior to the expenditures being
made. As such informationLmust originatefrom the projectconsultants
thrcughthe authorityresponsibleto governmentfor liaisingwith the funding
agency,it is essentialthat the actionsto be carriedout by the project
consultantto satisfythe fundingagencymust clearlybe set down. These
should includethe necessityof the timelysubmissionof informationneces-
sary to ensureapprovalof paymentsthat the engineerproposesto certifyto
the contractor,thus, ensuringthat the fundingagencyapprovesin advance
(i.e.by pre-audit)all paymentsto be made beforethe applicationfor reim-
bursementand thereforeavoidingthe delays that have occureddue to amounts
being includedin applicationsfor which approvalhas not been obtained. It
must be recognizedthat thereare considerable administrative costs in apply-
ing and accountingfor the reimbursements, over and above the original
financingcost of such a loan, i.e., loss of interest. In addition,it is
inevitablein financingof this sort that therewill be a loss of valuedue
to inflationand currencyexchangefluctuations in the presentclimateof

In addition,a contribution from the EuropeanEconomicCommunitywas

arrangedwith a furtherSpecialActionCreditfrom the same sourcefollowing
later. The total contribution receivedunder the secondSupplementalAgree-
ment, the EEC, the EEC SpecialAction Creditand the insurancerecovery
includingthe intereston the insurancemonies investedwhile a decisionwas
being made on the dispositionof the insurancemoniesamountedto US$111
million. The furtherresourcesarrangedby GOP from Kuwait,Saudi Arabiaand
- 81 - Page 6

Abu Dhabi Fundsfor Developmentamountedto US$102million. However,the

contributions from the Kuwaitand Saudi Fundsare not being made to TDF in
advanceof disbursements, but have been dealt with on a reimbursementbasis,
paymentsfirstbeing made from TDF to the Contractorwith reimbursement
followingin due courseon applicationfrom WAPDA. Part of the contribution
from the Abu Dhabi Fund is being receivedin the same way and part is being
paid directfor works not being administered throughTDF.

One of the major furthercosts incurredwas the change of Stilling

Basin 4 to a twin flip bucketdesign. The construction was completedin June
1983. The foreigncurrencycosts are being met, 83% from the Saudi Fund and
17% from the Kuwait Fund. The balanceof the contributions from Kuwaitand
Saudi funds have been allocatedto remedialwork at the Spillwayplunge
pools. The contributionfrom Abu Dhabi was allocatedUS$6.5million to
SpillwayWorks and the remainderto Geotechnical Works. Each of the other
two funds (Kuwait and Saudi)included an un-allocated contingency amount,
the final dispositionof which has yet to be determined. Discussionsare
continuingwith WAPDA in order to make the best use of any uncommitted
amountsin each of these three funds.

An additionalcontributionof US$ 3 millionwas called from the

Governmentof Pakistanin October1981under Section1.04 of the TDF (Second
Supplemental Agreement1978)and receivedin January 1982 to meet the tem-
poraryshortfallin foreigncurrencyuntil such time as the Abu Dhabi loan
became effective. The total contributionsreceivedunder the SecondSup-
plementalAgreement,insurance recoveryand the contributionsfrom the EEC
includingthe SpecialActionCreditin US$ equivalents are as follows:

Second Insurance
Supplemental Recovery & EEC
& EEC Special Action Credit

Australia 363,008
Canada 8,783,707
EEC 6,825,492
EEC SpecialAction Credit 7,059,617
GermanyThroughPakistan 10,207,153*
IDA Credit 37,688,012*
Italy 9,420,375*
Pakistan(Incl.InsuranceRecovery) 3,000,000 2,673,000
TDF InsuranceRecovery - 2,960,304*
UK 21,697,008 -
97,984,755 12,692,931

* IncludesInsuranceRecoveryana Interestas additionalcontribution.

Attached(Table1) is a statementof EstimatedResourcesand Costs of

the Projectas at June 30, 1983. The estimatedcost of the works is based on
the latestCapitalCost Estimate,which in summarizedform is attached
- 82 - Page 7

For the purpose of comparison, the estimated foreign exchange resour-

ces and costs as at December 1977 and June 1983 are shown (Table 3). Since
December 1977 there has been a net reduction of US$7 million in the estimated
cost of the original original works, initial repairs and additional works.
The remedial works to the spillways are estimated to cost US$55 million more
than the earlier estimate and the conversion of Stilling Basin 4 to twin flip
buckets US$14 million extra. The allowance for possible future Geotechnial
lWorksin the abutments of the dam are now estimated to cost US$24 million,
together with a further allowance of US$4 million for possible additional
works for direct disbursement from the Abu Dhabi Fund. These works have not
yet been defined by WAPDA.

The changes in the estimates and other financing adjustments would

have increased the December 1977 shortfall to $144 million in foreign cur-
rency resources to US$228 million. To meet this shortfall, total additional
foreign funds of this equivalent amount have been arranged or have become
Available. The figure of US$228 million is comprised of the following con-
tributions and changes in other resources:

US$ Million

(a) Abu Dhabi 25.0

Australia 0.4
Canada 8.8
European Economic Community 6.8
EEC Special Action Credit 7.1
Germany 1.2
Kuwait 18.1
IDA 37.7
Italy 9.4
Pakistan 3.0
Saudi Arabia 58.6
Insurance Recoveries including interest
attributable to Pakistan and TDF 5.6
Sub-total 212.4

(b) In addition, the accumulated income (earnings on

investments) is now estimated at US$24.3 an
increase over the earlier estimates of:- 16.3

(c) The balance of the Indus Basin Development

Fund has been adjusted upwards by: 2.0
Sub-total 230.7

(d) The net change as a result of currency

appreciationsand depreciationson cash
and investments is: -2.7
Total 228.0
Page 8

The estimatedvalues of the Kuwaitand Saudi fund loans shown above

have been re-assessedon the basis of the reimbursementsreceived. Continu-
ing fluctuationsin exchangerates could resultin final valuesvaryingfrom

As shown by Table 1, overallthe presentresourcesappearto be

sufficientto meet the latest estimatedrequirementsprovided the contribu-
tions from the Middle East countriescan be fully utilized. However,unless
changesare made to the presentallocations within the List of Goods for each
of the threeMiddle East contributions,there will be a shortfallof the
order of US$ 4 million in the non-rupeeresourcesrequiredto meet the latest
-84- Table 1


JUNE 30, 1983
Total Currency Rupees
- ~~~12 I/
Indus Basin Development f~md Balance 354 352 2
Contribution to Tarbela Development Fund;
Total Currency Rupees
a) Untied 98 98
b) Tied 76 76 -
a) Government of Pakistan 461 461
4) Special Contributions
under Supplemental 46 37 9
Agreement (1975)
) e SupplementalCoit- 3
ments 1978 and EEC 323 100- 223
V} insurance Recoveries 6 6 ! -

9) ECC Special Action 7 7 -

Credit - 017 324 693
137-1 676 695
Add Accumulated Income 24 24 _
Adjustments for currency
fluctuations on cash and
investment -6 -2 -4
Other Contributions 108 102 6
EstLmated Total Resources 1497 0oo 697
Cost of the Project ( june 1983) Estimate 1171 - 531 640
Cost of Repairs and Additional Works ( June 1983) 86 56 30
Interest paid on special plant advance and delay
in repayment of total special plant advance (7) (7) _
Increase or (reduction) in cost of the Project as
a result of changes in exchange rates (209) 6 (215)
* Further modifications to Stillinq Basins and
Remedial Works to Spillways 410 186 224
Allowance for further works in abutments of
cbankment Dams, etc. 46 28 18
1497 800 697
Estimates Shortfall/ (Surplus) -

Balanoe remaining on closure of the Indus Basin Development Fund on December 31, 1977.
Excludes.US$ 8 million, being payments up to May 2, 1969 for Tarbela preliminary
Works which were met from the Indus Basin Development Fund.
Includes insurance recoveries attributable to Germany, IDA, Italy and UK, which
Were allocated to the TDF as an additional contribution under the TDF (Second
Supplemental) Agreement, 1978. Also includes US$ 3 million contribution fro0
Government of Pakistan.
includes Pakistan's share of insurance recoveries and portion allocated for
direct return to TDF.
Foreign currency contributions from Kuwait. Saudi and Abu Dhabi Funds. Local
currency contributions are the rup"e payments made direct by WAPDAand not
thDough the TDF.

Local Currency - Rsa. Foreign currncy - $ S

Section of Works Construction CD L ST Works Engineering Total Cstructlon Engiering Total Routded Total
Works inc. inc. LC PC Total
CD&ST monc. FC

Original Works 1260 1533 2793 254 3047 463.7 58.4 522.1 522
O&M 3 3 7.8 1.4 9.2 9
($640.5) 531.3 531 1,171.8
Repairs 52 - 52 14 66 19.5 2.5 22.0 22
($ 13.9) 35.9
Additional Work 55 - 55 20 75 28.1 5.6 33.7 34
($ 15.7) 49.4

Sub Total Original 1367 1533 2900 291 3191 519.1 67.9 587.0 587
Works a O&M ($670.1) 1,257.1
Spillway Remedial 1303 367 1670 60 1730 130.0 8.3 138.3 138
Works ($174.8)
S4 Outlet Works 329 131 460 25 485 39.0 8.5 47.5 48
(5 49.0)
Geotechnical Works etc. 64 16 80 38 118 7.0 9.4 16.4 16
(5 11.9)
Dzilling & Grouting 36 31 67 - 67 7.3 - 7.3 8
(5 5.8)
Further Works and Geo-
technical Equipment - - - 4.2 - 4.2 4
(for direct disburse-
ment by WAPDA (IC) anet
Abu Dhabi Fund (PC))

Sub Total New Works 1732 545 2277 123 2400 187.5 26.2 213.7 214 455.2

Total All Works 3099 2078 S177 414 5591 706.6 94.1 800.7 801
($911.6) 1,712.3
Intereut on Sp.Plant
-6.7 -6.7 -7 -6.7
Bank Exchange Differ-
1.0 1.011.
700.9 94.1 795.0 795
Exchange Rate
Losses (S4215.0) 5.0 - 5.0 5 -210.0 ; X

S696.6 705.9 94.1 800.0 8o0 1,496.6

- 86 - ANNEX 4
Table 3


Foreign Exchange Resources and

Estimated Foreign Exchange Costs

December June
1977 1983
-----(US$ Million)----

A. Foreign Exchange Resources

(Received or Arranged)

IBDF Balance 1/ 350 352

Contribution tfoTDF 2/
(a) Untied 98 98
(b) Tied 76 76
(c) 1975 Supplemental 37 37
(d) 1978/79 Supplemental - 100
(e) Insurance Recoveries - 6
(f) EEC Special Action Credit - 7
Other Contributions - 102
Adjustments for Currency
Appreciations and Depreciations 3 (2)
Accumulated Income 8 24

Total 572 800

B. Estimate Foreign Exchange Costs

Original Works (1968-1976)3/ 523 531

Initial Repairs and Additional Works 71 56
Remedial Works to Spillways (1977-1982) 83 138
Further Modifications to Stilling Basins
(1981-1983) 34 48
Possible Future works (1981-1984) - 28
Other 5 (1)

Total 716 800

Estimated Shortfall/(Surplus) 144

1/ Indus Basin Development Fund.

2/ Tarbela Development Fund.
31 Dates in parenthesis indicate periods during which principal
expenditures were, or are expected to be, incurred.
- 87 -
Page 1



Covenants and Status Compliance

A number of covenants are included in the documents of the several

loans and credits. The most significant covenants and the status of com-
pliance is as follows:

One covenant is included in Loan Agreement (Tarbela Project (548-PAK)

as follows:

"Section 5.01(b). The Borrower shall cause the dam and other
facilities included in the project and the electrical power gener-
ating equipment associated therewith operated and maintained in
accordance with sound irrigation and elec ric utility practices." 1/

This covenant is being complied with although the resources of the Contractor
still provide significant back-up for WAPDA's O&M activities. The Bank has
pointed out (see ANNEX 4) that WAPDA's difficulty and delay in filling sanc-
tioned positions in the 0&M organization could affect WAPDA's ability to meet
this covenant. As WAPDA O&M forces assume the full work load in 1984 and as
increased local currency and foreign currency are made available, compliance
should be strengthened.

Three covenants are included in Development Credit Agreement (Tarbela

Project, Second Supplemental (771-PAR)) as follows:

"Section 3.02(b). Without limiting the generality of

paragraph7R) above, the Borrower shall, under arrangements satisfac-
tory to the Association, cause the dam and appurtenant structures
included in the project to be periodically inspected by qualified and
experienced engineers in accordance with sound engineering practice
in order to determine whether there are any deficiencies in the

1/ This covenant is repeated in essentially the same language in Section

3.02 Development Credit Agreement (581-PAK), in Section 3.02(a), Develop-
ment Credit Agreement (Tarbela Project-SecondSupplemental 771-PAK)), in
Section 3 .02(a), Special Action Project Agreement (51-PAK (EEC)) and in
Section 3.02(b), Loan Agreement 2247-PAK.
-88 - ANNEX 5
-88- Page 2

conditionof such structures, or in the qualityor adequacyof main-

tenanceor methods of ope ation of the same,which may endangertheir

This covenanthas been compliedwith at one levelin that WAPDA have

organizedand staffeda Dam SafetyOrganization withinW7APDA.This is hope-
fully an interimarrangement until legislationis enactedcreatinga separate
and independentorganization.Severallevelsof inspectionwill be necessary
but since constructionwork is still in progress,no firm inspectionprogram
has been adopted. With funds availableunder Loan 2247-PAK,it is tenta-
tivelyplannedthat a fir*st detailedinspectionwith internationally recog-
nized team memberswill be conductedin 1984/85with a secondsuch inspection
in 1987.

"Section3.02(c). The Borrowershall,by December31, 1978

furnishto the Associationfor its reviewand comments,a detailed
programof measuresneeded to meet the requirements of paragraphs(a)
and (b) and a realistictime schedulefor its implementationand
shall promptlyafter receivingthe Association's comments,implement
a programof such measuressatisfactory to the Association,in
accordancewith a time scheduleacceptableto the Association."

WAPDA presenteda programin 1979which, with updatingand revisions,is the

basis for work in progress. The programis updatedapproximatelyevery six
months. The most recentprogramwas presentedin January1983. As noted
previously,programsand schedulesfor inspectionsare not yet set.

"Section3.04(a). Prompdlyupon completionof the Final

Report under the UnitedNationsDevelopmentProgramme(UNDP)Project
describedin UNDP ProjectDocument(PAK/74/404/A/01/42) as amended,
the Borrowershall exchangeviews with the Asso- ciationon the
Action Programof the Borrower,based on the findingsof such Report,
and on th specificprogramsincludedthereindesignedto ensurethe
most economicand efficientuse of water relasesfrom the Projectand
shall thereafteruse its best effortsto carry out such programswith
due diligenceand efficiencyin accordancewith a time schedule
mutuallyaccept-able to the Borrowerand the Association.

Compliancewith this covenantis reflectedin the fact that the Governmentis

rethinkingits strategiesfor the water sectorin the light of the Revised
Action ProgramReport (April1979). Major new initiativesare proposedin
part supportedby the Bank for improvisingthe efficiencyof water use in the
Indus system. RelatedBank projectsincludethose for the rehabilitation of
the irrigationsystems,for on-farmwatermanagement,prioritydrainageand
area developmentprograms.

a/ This covenantis repeatedin Secton3.02(b),SpecialAction Project

Agreement(51-PAK(EEC))and in Section3.02(b)Loan Agreement
- 89 - ANNEX 5
Page 3

One covenantis a'so includedin SpecialActionProjectAgreement

(il-PAK(EEC))as followsr

"Section2.06. Exceptas the Administrator may otherwise

agree,WAPDA shallpresentto the Associationfor its reviewby March
31 of each year a detailedannualprogramreflectingbudgetproposals
and proposedexpetidituresfor operationand maintenanceof the
projectduringthe subsequentfiscalyear, includingcapitalexpendi-
tures for permanentoperationand maintenancefacilities." 1/

This covenanthas been compliedwith.

a/ This covenantis repeatedin Section2.07, ProjectAgreement 2247-PAK),

exceptthat the date for presentation
of the budget to the Bank is set
ahead to February1, beginningin 1984.
- 90 - Table 1



Prices Used For Economic Analysis 9/

(In Constant Mid-FY83 Currency Units)

Unit 1975-76 1979-80 1982-83 1989-90 1994-95


i.: at Grain 1/2/ Rs/ton 3,255 2,503 2,320 2,031 2,019

Wheat Straw 3/ Rs/ton 148 148 148 148 148

Human Labor 3/ Rs/manday 13.5 15.4 17.2 19.4 20.3

Bullock Labor 3/4/ Rs/pairday 16.8 19.8 21.1 23.6 25.7
Wheat Seed 5/ Rs/kg 3.42 2.63 2.44 2.13 2.12

Fertilizer 6/

N 1/7/ Rs/kg 7.65 6.81 6.34 8.74 9.24

P T/8/ Rs/kg 7.57 5.90 5.77 6.96 7.08


ResidualOil 1/ 9/ 10/ Rs/ton 1,551 2,231 2,736 3,143 3,478

1/ Economic prices of internationallytraded commodities based on Bank

commodity price forecasts of July 1982.
2/ Import-basedprice assumed through 1984-85. Over next five-year period,
linear transition made to export-based price.
3/ Local prices converted into border rupees.
4/ Excludes driver.
5/ 5Z premium assumed above wheat grain price.
6/ On kg of nutrient basis.
7/ Based on Urea with 46% analysis.
81 Based on TSP wth 46% analysis.
9/ Details of calculations of farmgate/thermalplant site prices available
in Project File.
10/ C.i.f. Karachi price adjusted for internal transport and handling to
Lahore, the assumed load center for a thermal alternative to Tarbela.
91 ANNEX 6
Table 2



Irrigated Rabi Wheat Input/OutputAssumptions

(Per Hectare Basis)

Unit 1975-76 1979-80 1982-83 1989-90 1994-95


Grain 1/ kg 1,526 1,720 1,924 2,500 3,000

Straw 2/ kg 1,663 1,875 2,097 2,725 3,270


Human Labor 3/4/ mandays 45.5 45.3 44.9 45.0 46.0

Bullock Labor pairdays 15.0 15.2 15.4 16.0 16.5
Seed kg 92.0 92.0 92.0 92.0 92.0

Fertilizer 5/
N kg 55 60 65 30 100
P kg 15 18 21 30 40

i/ 1975/76-1979/80actual Punjab-Sind/Baluchistanweighted average yields

from within Tarbela canal commands. Weighted averaging based en CCA's
in Punjab and Sind/Baluchistanwithin the Tarbela canal command system.
Source: WAPDA, Tarbela Dam Project Post-ProjectMonitoring Irrigationand
Agricultural Data, Lahore, June 1979.
2/ Straw yield assumed at 109% of grain yield. Source: Agricultural Credit
Division, Muslim Commercial Bank Ltd, Crops of Pakistan, Karachi, 1980,
p. 186.
3/ Reductions in human labor requirements represent net result of reduced
weeding labor requirementswith increased shade effect with higher yields
and increased labor requirements for winnowing and threshing activities.
4/ Includes bullock drivers.
5/ On nutrient basis.
-92- ANNEX6

Table 3


Ltrbel:t tocrmetl teriation Water opoi.and a nAcremntal tMU Crooned Ara

1970-71/ 1981-82
1974-75 thr
Vot Avsra 1/ 1975-76 1976-77 1977-8 1978-79 179-0 1980-81 1996-97 198-9 2008-09 2016-17

Oct/Nom 14ua_ at Tarbl*e m A

W 3.644 3.975 5.78 7.649 6.656 6.642 6.666 6.680 6.416 *.09 4.045

Oct/Nov Reissma at Canal Nled 3/ NA 3.097 3.379 4.920 6.502 5.658 5.646 5.6 6 5.678 5.454 4.334 3.438
tecapef 41 NAP 0 387 0.225 0."I 0 373 3.311 0 102 0.3 2 0.*83 0 4" O. 3t 0.292
Not AVSiLilttles 1t- VW- KW12 6.1' M V5 M r.
3s f0 TO T.T
Incremental Net Avallabilities MA 0.244 1.019 3.217 1.437 2.634 2.44 2.285 2.080 1.056 0.236

Predicted Pabi Cropped Afre to Tout

Tarbela Caal Comend System witb soa
surfac Water Supplea (Pre-Tarbela)
ad with ncrnutst let Aftlabilitle
frm Tarbls_171 *000 ae 6,058.0 6,196.2 6,628.0 7,806.2 6,857.4 7,500.0 7,399.3 7,314.7 7,205.1 6,648.86,191.7
Neitmted Increm,tal fabi Croppne
Are from Tarbela Net tncremetal
AvallbIstia's (A) eo ac 138.2 570.0 1,748.2 799.6 1,442.0 1,341.3 1,256.7 1,147.1 590.8 133.7
795.2) !
Total lPabi Cropped Are withtin trbelr
Canal Co_ned Sate. 8/ 'C000a 7,957.0 9,142.7 9,198.2 9,282.3 9,418.6 9,819.2 - - - - -

Total Incremental Rabt Croppe A

withti Tarbala Canal Comand
Syate (8) '000 at 1,185.7 1,241.2 1,3#5.3 1,461.6 1,862.2 - - - - -

(A) / (U) I 11.7 45.9 131.9 54.7 77.4 - - - - -


ir -t Area withitn
Total abt trbala
CanalCo_mmndSpate.8/ e000
SC 4,653.1 5,20t.1 5,357.6 5,559.4 5,935.2 6,164.2 - - - - -

Total Incrmental tbi lit Areawitb-

in TarbelaCnal Cond System (C) o000
at 54U.0 704.5 906.3 1,282.1 1,511.1 - - - - -

(C) / (a) 2 46.2 56.8 68.4 87.7 - 81.1 - - - - -

I/ Pre-Tarbela 5-eaor perid.

it Baed on sonthil river flow (1970-71/1974-75) and mn monthly outtfio from Terbels NtasrveSr (1973-76/190-81). 1981-82/19%-97 levelrepreets
1976-77/1930w-1 (five-per) averap. Threafter, aedimentation to ssumed to redue active by 8.0 N, or by 88.92, oSer a 45-per period. 4Armitr
linear reduetion, thia wuld yield .132 MU of reduced Octor/November relaeeh p... subsequent to 1996-97.
102 In river and 52 tn link crnala).
T/ 1atiite
3/ Based oanVAfA
BSed on apporttoned apeg
of 152 reduction from sourca-epeciftcally,
ae low loti
SYStem Abtract of Onerattona Data fo
Srtrap. 1970-71/1940-t1 historical date from Water t
1960-61 to 19RO-SI tahore, November 1981. as e
c anmt Directorate. VAIA, Indue
in poat-1980-S1 period calclated at
T.5 of
October/NoeMber Ueleare at Canl Rad baed on long-ter (1970-711980-81) average.
St lncrmata over pre-Tarbala 1970-71/1945-75 average net avatlabtltte of 2.910 W.
It loed an wnltipla regrteloo-eatimsted eleticity uesig 1970-71/1978-79 data from the 10 Tarbel Cna d Canls. The followin relattoa htp
we eattimtedt

lnt.7.161756 + 0.744294 loXl + 0.2343422 1n12

(0.04492) (0.03594)

Aare X- Total tebi Area ('0oO ac)

II - Total October/llev.ber Canal Witdrawal (W?)
t2 - Total tRbt Private and Public Tubevlls Pumpap (MAP)
Adjusted R2 - 85,42.
*** found sigificant at 995 confidence level.
It Excludes estimted effect of tube_ll puapage.
i Ristortcal date supplied by WApDA.
'/ Area used in *eonamic analysti consistent witb 1976-77. 1978-Rl average.
T!rkisaPmfttc-Ecmb hanw
tin .s. . .li_

1Wy i99 16 1im0 1n 197 1973 1974 1M 176 197 98 1m 1990 181 12 313 1994 9 3 15 1B 1 13990 g1

NMI .2/

LnwL rm - - - - - - - - m 93 1152 133M 267 23 24 22 254 2 27m 2717 27VS 2796 2797 2M
1I1E CWh.LC S 1 - - - 262 - - - 2192 m2 49 - m 76 259
- 2521 592 206 667 PO 154
m m OI1 4/ - - - - - - - - 104 104 104 t4 104 104 22? 2D 227 227 25 259 9 259 29 259
IEIM IL 8A91UNSAt - 57 set 1 190'4 24 290 4774 6135 6135 61 AM52 7247 7446 7m 9066
R UITOT - - - - - - 2192 229 20 163 17 334 5 7521 44 6 7125 761 75 72 Oe
914 G

TOTAL - - - - - - 655 2192 2501 305e 2935 3212 02 913 10010 962n 9115 9956 104 040 10725 1OM 11229

i69C1lia .COSI / -- -- - - - 96 535 469 50 3024 9U5 93 943 990 103910P 109
@3 1123 116 119 1243

UESTIMn 9n m1 1t1 lo 220 206 37 312 14 132 90 a s 37 7 47 58 2a 37 - - - - -

NSRItTI 6 267 45
4S 529 07 27 13 1642 1041 79m 747 654 949 94 *U 1910 454 193 112
INSTUlTIO - - - 42 1 403 22 234 193 4 353 63 636 19 482 1245 3 22 - - - - -
llMIEllo.5 - - - - 56 166 404 64 317 54 13 , 5 0 - - - - -
UAIWSNISSIONUIEI - - - - - 6 1e 103 790 60 2 55 30 7 5 52 624 546 217 21 - - - -
0IUIKm - - - - - - - - - - - - - - 4 ts9 3 5 39 39 39
SU3Olt. 644 2870 4936 5481 5324 3355 3034 3013 2516 19 1117 1157 164 160 1745 15 2445 1467 653 24 5 n 3 3
VATElt9 - - - - - - - - 16 72 52 19 122 6 100 120 193 214 23 261 259259 259 9
via 71 - - - - - - - - - - 51 51 1 51 9 101t lt 10 115 11s5 its 1 it1

ITOtA - - - - - - - - 1 7
n 103 244 In 336 13 22 294 314 3 37 374 374 4 374
T1lEtA913aT 64 2970 4936 51 5324 3355 03U4 t13 2531 156 1220 1402 1921- 176 198311 273 1791 1011 400 30 413 413 413

MAL 654 2970 4936 59 5m1 3155 3034 3013 2 220 169 102 2M5 27 297 275 37 2919 2073 1494 IS3 1576b 11 167

ET IKi *I1N -654 -2670 -4036 -41 -5324 -3355 -2379 -931 -46 841 It" 1309 3182 562 79 6613 53 7 9376 6 7 9148 9? X

tublo P*C--e wAe b1 ne

(is h. Kil1sX

A3 M2 92 1941917 1199 20 6 22 W f24 206 60 27 29 N20 31l 213 211 21 213 2914 15 2S 17
amm~~~~~ .

1Ga13L W U8JIIF=/ 0 Mt 3u 31,69 = n mlO Zt 231 5 a 4 1t11

2 t UtW 143 2 mU In M 6 Su 23
mr 11i
cam 2 - in 1 21 at - n 6 221 a 11 ts
1EW . 41 Z 2 2 2 * 25 9 5 5 2 ZW 9 2 9

FM 3I11L . 1 Gm 9 m US 963 1A6 111091972 81 Om 9 1157 11102 "A 1a %6 9651 915 o6 Om g1 1n 888
JOI. t116 115 I2 13 11 16 1454 131131201 114341121 11915178 133 11275 075 110 1095 1026
M 93 99 94 t9 9

JORMUM Cl 12M1 19 13 1465 UP 10 1221 15 am i03 74 912 84 7

M 73 661. 59 4 470 467 32 2 214 164
G1LIh31tt - - - - - . - - . - - . _ _ _ . - _ _ - . _ _ _

alllltiUl- - - - - - - - - ' ' ' ' - ' ' ' - - ' ' - ' -
FE 11tMl6JS t Z- i - - - - - - - - - - - - - . . . - - _ _ _ _-
.IUEb.S _ _, , ,___ _,, _,_
LIE - - - - - - -_ _ _ . . . _ _ _ _ _ _ _ - -

8O1BURM, 39 3 39 3 n n J9
9 D9 3J n 3 J9 3 t9l3 3 9 3 3 39 39 39 3 n

mi a mi
611139 23 75 23 23 23 23 23
23 KKItLENM~~~~~~~~~~~~~~~~~~~~~~
23 23 23 25 23 23 2 2 23
5t 23 2 23 25t3 259
3 2
NER IIS/ ' 311 111 11IU IFMinimLAIM~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
115 l as 115115 IU 11315 3IU 1 It3
15 5 11
tU tU5 15 115 IUI 135 tt5 115 115 1t5 -

sSUhoIN. n4 374 37 374 374 pA 374 374 3t4 3t4 37 374 37 D4 3t4 D74 D74 3 3t4 3t4 374 374 374 37
tMiaA 50310l6. 4Ul 413 413 413 41 413 4U3 *13 43 413 4333 1 413 413 413 413 413 413 413 413 413 413 413 41

tON 1694 tm3 177 3681 1712 1696 1675 117 1533 145 1337 33 126 129 113t 1074 3010 94 88 2 71 69 627 563
m i- 61111 9791 102 107 108 109 1096 1243 120 1651 998 919 301 1231 126 *101 67 101 96 34 92 05 86 01 7
95 -
Table 4
Page 3



Tarbela Project -- Economic Real Flow: Footnotes

1/ Pakistan fiscal year, i.e. 1968=FY68=July 1, 1967-June 30, 1963.

2/ Cost/benefit streams expressed in constantDecember1982 (mid-FY83)


3/ Ref. ANNEX 6, Tables 1-3. Representsgross agricultural productionusing

irrigatedRabi wheat as the representativecrop. Quantifiedagricultural
benefitsincludeonly those calculatedbased on estimatedincremental
Rabi croppedarea attributableto incremental Tarbela irrigationwater
releases. Excludedis Tarbela'scontributionto increasedproductivity
on traditional(pre-Tarbela) Rabi croppedarea.

4/ Based on reportpreparedfor projecteconomicappraisalby Sir Alexander

Gibb & PartnersentitledEvaluationof the TarbelaProject.

5/ Ref. ANNEX 6, Tables 1-3.

6/ O&M plant investmentsshown here includethose for the Reservoir

MaintenanceFacilityProject (and a subsequentsinkingfund US$3.0M
p.a. to replaceexhaustedcapitalfacilities).PreviousO&M plant
costs includedWater Wing O&M costs.

7/ IncludesO&M costs of incrementaltransmission
- 96 - Table 5



Tarbela: RelativeImportanceof ProjectCost and

BenefitStreamswith SwitchingValues

Percentof Total Switching

PWOR of Benefit Value 2/
or Cost Stream 1/ (10% p.a.)
I. Benefits

A. AgriculturalBenefits 26.9 -87.8

B. Power (T'hermal
1. Capital Costs 13.4 -175.8
2. Thermal O&M 2.4 -995.8
3. SavedResidualOil 57.3 -41.2

Subtotal 73.1 -32.3

Total (%) 100.0 -23.6

(Rs M) (35,588.4)

II. Costs

A. AgriculturalCosts 14.0 220.6

B. TarbelaFacilities
1. InvestmentCosts
a. Resettlement 5.0 618.3
b. Construction 64.0 48.3
c. Power Installations 6.3 490.5
d. TunnelNo. 5 2.7 1,114.1
e. TransmissionLines 3.7 844.5
f. O&M Plant 0.4 8,254.2

Subtotal 82.1 37.7

2. Recurrent Costs
a. Water Wing 2.7 1,141.9
b. Power Wing 1.2 2,649.9

Subtotal 3.9 798.0

TarbelaTotal 86.0 36.0

Total (%) 100.0 30.9

(Rs M) (27,180.5)

1/ Streamsdiscountedat 10% p.a., the assumedOCC for Pakistan.

2/ Switchingvalue is the percentagechange in the specifiedstream
that reducesthe Net PresentWorth (NPW) to zero at the specified
- 97 - ANNEX 7
Page 1



List of References

1. Indus Basin DevelopmentFund Agreement. 1960

2. Indus Basin DevelopmentFund (Supplemental

Agreement). 1964

3. Reporton a dam on the Indus at Tarbela. World Bank Group. 1965

(Headedby Lieftinck,P.).

4. Study of the Water and Power Resourcesof West Pakistan(4 Volumes).1967

World Bank Group (Headedby Lieftinck,P.).

5. The challengeof the Indusand a Nation'sDetermination

to Succeed. 1968

6. Water and Power Resourcesof West Pakistan(3 Volumes). 1968

Johns HopkinsPress. Lieftinck,P., et al.

7. TarbelaDevelopmentFund Agreement. 1968

8. Reportby the Administratorto the Partiesto the IndusBasin 1971

DevelopmentFund and TarbelaDevelopmentFund Agreements.
World Bank.

9. TarbelaDam ConstructionReachesHalf-wayMark. Water Power and 1972

Dam Construction,Septemberand October1972,pp. 317-322,355-365.
Lovell,L.A., et al.

10. TarbelaDam Project,West Pakistan(ASCE). Journ.ASCE, Volume 98 1972

(P02),October1972 pp. 221-245.
Binger,W. V.

11. TarbelaDam Project,West Pakistan(BNCOLD). JointMeetingof 1972

BNCOLDand Brit. Geot. Soc. February7, 1972.
Binger,W. V.

12. Some Construction

Aspectsof Tarbela. Journ.ASCE, Volume 100 1974
(C03),September1974,pp. 247-254. ThompsonM. H.

13. TarbelaDevelopmentFund (Supplemental)

Agreement. 1975
- 98 - Page 2

14. Pakistan: A Review of the Indus Basin Project, 1960-1975. 1976

World Bank.

15. Final Report by the Administrator to the Parties to the Indus 1977
Basin Development Fund Agreements of 1960 and 1964.
World Bank.

16. Tarbela Development Fund (Second Supplemental)Agreement 1978

17. Tarbela Plan, Problems and Success. Water Power and Dam 1978
Construction,July 1978, pp. 29-34. Binger, W. V.

18. Using Tarbela to RevolutionizeWater Management and Agricultural 1978

Development in Pakistan. WAPDA. Kirmani, S. S.

19. Draft Revised Action Program for Irrigated Agriculture in Pakistan 1979
(4 Volumes). WAPDA.

20. Fourth Nabor Carillo Lecture - Foundation Design of the Tarbela Dam. 1979
Lowe III, J.

21. Report for Contributors on Settlement of Insurance Claims for 1979

Damage Arising at the Project. World Bank.

22. Evaluation of On-Farm Water Management Research Project, Colorado 1979

State University, under AID contracts. D.F. Peterson, J.L. Walker
and E. W. Coward

23. The Tarbela Experience. Sir Alexander Gibb & Partners. 1980

24. Engineering Flexibility. The Tarbela Dam Project. National 1982

Development, April 1982, pp. 54-58. Lowe III, J.

25. Status of Project. TAMS. 1982

99 ~~~~~~PLATE

, , . ~~~ OtOIbIBANKt





IT ~~~~~~~~~~~~CONSULTATS








Er 8ELltRI (MAC) we- rd alld by WAPOA fro.
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Project Completion Report of the jU5S.RKer\
Tarbela Dam Project. The mop is 36 A
based on World Bank 7866, / fIAM
. '\
February, 1973; amendments o
project and a project location inset
hove been incorporated in this map.
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