Ministry of Water Resources (MoWR) has proposed five options of financial compensation and goodwill package for Chinese nationals who were killed and injured in a terrorist attack on Dasu Hydropower Project (DHPP) last year, sources to Minister for Water Resources told Business Recorder.
The proposals have been formulated jointly by the Inter Ministerial Committee comprising secretaries of Water Resources, Interior, Foreign Affairs, Finance and Law & Justice Divisions.
According to Chairman Wapda, on July 31, 202 1 Vice President M/s CGGC pitched a demand of $ 50 million as advance for compensation for the dead and injured. Subsequently, on August t 08,2021, M/s CGGC lodged a claim of $ 76 .198 million in black and white, on account of compensation for the deceased’s funeral charges and the injured, and a claim for idle charges etc. in substantiation of their initial demand of $ 50 million. The claim of $ 76.198 million can broadly be bifurcated into two categories, ie, commercial payments ($39.198 million) and compensation for Chinese causalities $ 37 million.
The project is Pakistan’s flagship project, which upon completion will enhance the generation capacity of the country by 4,320 MW. The project was initiated with the assistance of World Bank and was progressing smoothly until a tragic incident of terrorism took place on July 14, 2021 that resulted in the sad demise of ten Chinese nationals, working with M/s China Gezhouba (M/s CGGC – contractor for main civil works) and 4 Pakistani workers/engineers and security personnel.
Besides loss of precious lives, there were twenty-six Chinese nationals who sustained injuries, including twelve who were seriously injured and fourteen Chinese workers suffered minor injuries. Consequently, the pace of implementation of the project was adversely affected.
In the aftermath of the incident, the Chinese contractor demobilized from the site and raised several demands as preconditions to resume work, which inter-alia included payment of $37 million as compensation for the deceased and injured Chinese workers.
The matter was duly deliberated upon in the 15th meeting of the Project Steering Committee for Dasu HPP on September 22, 2021 in which it was decided to constitute an Inter-Ministerial Committee under the convenership of Secretary MoWR and comprising of secretaries of Finance, Law & Justice, Foreign Affairs and Interior Divisions.
Accordingly, the Committee was notified on October 1, 2021. The ToRs of the Committee were to work out a compensation package for the affected Chinese nationals keeping in view past precedents, current demand of the Chinese Company, prevalent insurance rates and compensation package offered by the Chinese Government for their nationals in similar cases.
The Committee convened a meeting on October 06, 2021 and decided to constitute a sub-committee, comprising the officers of the concerned Ministries represented on the Inter-Ministerial Committee, to work out the necessary details at operational level. The sub-Committee held three meetings for the purpose and ascertained that there existed no contractual remedy to make financial compensation related to casualties of the contractor’s staff, owing to any terrorist activity.
Also there were no rules/policy/instructions available that could provide guidance for the said purpose. In this situation, the sub-committee considered the compensation paid in 2004 to two Chinese nationals, one killed and the other injured in a terrorist attack, while working on the Gomal Zam Dam Project, as baseline. The Government of Pakistan at that time approved compensation package amounting to $ 100,000 for the family of the deceased and $ 50,000 for the injured worker.
With baseline in view, the sub-committee arrived at a consensus to propose the following options of payment of compensation for consideration: Method of computation of compensation (i) $ 4.611 million on the baseline of Gomal Zam Dam compensation of 2004, indexed upward on the basis of inflation; (ii) $ 6.100 million on the basis of China’s compensation package for own nationals working in China; (iii) $ 11.600 million on the basis of Gomal Zam Dam compensation 2004, indexed upward using GDP per capita (PPP); and (iv) $ 20.300 million on the basis of Gomal Zam Dam compensation 2004, indexed upwards using normal GDP increase.
While endorsing the sub-Committee’s report, Ministry of Interior recommended that a Committee comprising of Ministers of concerned Ministries be constituted to approve/review the final compensation goodwill package, before submission to the Federal Cabinet.
Accordingly, Water Resources Ministry moved a summary for the Prime Minister on January 6, 2021 for constituting the Ministerial Committee, on which the Prime Minister directed that the proposals for compensation payment may be placed before the ECC of the Cabinet with clear recommendations of the Inter-Ministerial Committee.
Accordingly, second meeting of the Inter-Ministerial Committee was convened on January 14, 2021 in which after thorough deliberations, the recommendations of the Sub-Committee were approved. It was further decided that the four options would be presented to ECC, with logic and substantiation. ECC can make the final determination out of the available choices.
In view of the background, MoWR has sought approval of the ECC for the following: (i) the selection of appropriate option as compensation/goodwill package to the families of the affected Chinese nationals; (ii) the engagement with the Chinese side at an appropriate stage may be made on government to government level; (iii) the approved amount may be provided as supplementary grant, as this Ministry does not have any budgetary provision for the purpose; (iv) the breakup of calculations for compensation payments is for internal consumption only. Lump sum amount may be paid to the Chinese side; and (v) the amount approved by GoP may be transferred to the account of Pakistan’s Embassy in Beijing, China.
The proposals being submitted to the ECC have been formulated jointly by the Inter Ministerial Committee comprising the secretaries of the Water Resources, Interior, Foreign Affairs, Finance and Law & Justice Divisions, in its second meeting held on January 14, 2022.