ISLAMABAD – Chinese investors have expressed serious concern over lack of sovereign guarantee for power projects in Gilgit Baltistan, which remains a significant roadblock to expanding energy production in the region.
China is working on critical infrastructure projects in the region, especially in agriculture, trade, and special economic zones. Chinese investors have expressed concerns about the lack of sovereign guarantees for power projects, while the high tariffs in the region’s energy sector have further deterred investment from Chinese companies, Additional Chief Secretary Gilgit-Baltistan said while briefing Senate Standing Committee on Kashmir Affairs and Gilgit-Baltistan.
Chief Secretary GB further said that the issue remains a significant roadblock to expanding energy production in the region, where the summer demand for power exceeds supply by over 100MW. The demand in the summer reaches 254MW, while local production can only generate 122MW, highlighting the pressing need for new energy projects.
On energy, Senator Zeeshan Khanzada pointed out that power remains one of the region’s biggest challenges. While hydroelectric power holds promise, it requires significant investment and time, with water availability proving inconsistent. “We must look into solar projects as a solution, especially for remote areas where hydroelectricity is not feasible,” Khanzada suggested.
The Additional Chief Secretary urged the Finance Division to consider a one-time grant of Rs30 to 35 billion to address critical infrastructure needs, including energy and tourism projects. He emphasized that without such an injection of funds, many vital projects cannot be completed. The committee that met with Senator Prof. Sajid Mir in chair, focused on the immense tourism potential of Azad Jammu and Kashmir (AJK) and Gilgit-Baltistan (GB), with particular emphasis on ongoing infrastructure developments and strategic policies designed to enhance the region’s tourism sector. The committee, while taking briefing on the development projects of Gilgit-Baltistan, focused on financial allocations for both the Annual Development Program (ADP) and the Public Sector Development Program (PSDP) for fiscal year 2024-25, with particular emphasis on ongoing projects and the region’s emerging economic opportunities.
It was briefed that for the fiscal year 2024-25, Gilgit-Baltistan has secured a significant funding boost for its development projects. The Annual Development Program (ADP) has a total allocation of Rs20 billion, with Rs7.15 billion already released. However, the committee also noted an outstanding throw-forward of Rs 138 billion for the ADP.
The Public Sector Development Program (PSDP) for the same period has been allocated Rs13.5 billion, which includes Rs4 billion dedicated to Prime Minister’s initiatives. The outstanding throw-forward for the PSDP stands at Rs99 billion.
Among the most notable energy projects are the 54MW Attabad Hydropower Plant and the 34.5 MW Harpo Hydropower Plant in Skardu. These projects are poised to play a pivotal role in addressing the region’s energy needs and providing clean power to local communities.
Additional Chief Secretary of Gilgit-Baltistan (GB) provided a comprehensive briefing on the region’s international collaboration. Highlighting key sectors where China is actively involved, the briefing underscored the complexities of energy and tourism development, as well as the need for greater financial support from Islamabad.
While briefing the committee on current state of tourism infrastructure in AJK, it was informed that there are 30 tourist lodges and motels, tourist information centers, welcome booths, and over 500 privately-operated hotels and guest houses.
According to the Chief Secretary GB, the region’s tourism sector has also been a focal point for investment, particularly in Baltistan, which is seeing increasing numbers of tourists, primarily from the upper and middle classes. This influx has spurred growth, but challenges remain. “Climate change and tourism sustainability are major considerations for us,” said the Chief Secretary. The region has developed ten management plans to ensure that tourism growth aligns with environmental conservation, and feasibility studies are underway for ski resort projects, air safari initiatives, and a cable car service. However, the lack of coordination in the NFC formula has created significant barriers to completing these projects.
In addition to tourism, Gilgit-Baltistan is struggling with infrastructure limitations. The region’s airports, particularly in Skardu and Gilgit, are unable to handle the volume of tourists. Skardu’s airport, though larger, is still limited, with only ten flights arriving in the summer. Meanwhile, Gilgit faces even more difficulties, with fewer flight connections. A proposal for a new airport in Gilgit is currently under feasibility study, with hopes of improving connectivity for both tourists and local residents.
The committee discussed several major tourism-related projects that are currently in progress, including the renovation and preservation of the historic Red Fort in Muzaffarabad, the establishment of a Museum in Mirpur, and the creation of a Simulacrum of Junjaal Hill. Additionally, the Skardu Airport, upgraded to international status in December 2021, is now poised to welcome international flights, further boosting the region’s accessibility to global tourists. The airport currently operates 16 weekly flights connecting key cities such as Islamabad, Lahore, and Karachi. It was informed that the number of tourists in AJK and GB saw 20 percent decline in 2023 (down by 3,990 visitors to a total of approximately 16,130).
