The World Bank Study," Water and Power Resources of West
Pakistan" [1], is one of the most thorough-going and sophisticated of
its type. In re¬reading it we have been struck by a curious argument
related to the real benefits to be expected from the construction of the
Tarbela dam. It was designed to produce electricity as well as to
irrigate land and it was necessary to estimate the benefits that the
electricity would confer. One way of doing this was to estimate the
saving that would be made by using hydro-power instead of natural gas or
imported fuel, for electricity generation. This meant that an
appropriate set of prices had to be estimated for Pakistan's supply of
natural gas. The way in which this was done was, to say the least,
unusual. The relevant passage justi¬fying the approach adopted is as
follows: