ISLAMABAD - Pakistan’s prime minister, Nawaz Sharif, on Friday ceremonially broke ground on an $81 million U.S.-funded component of a larger dam project to be built in North Waziristan, a volatile tribal region that until recently was condemned as the epicenter of global terrorism.

Officials say that, once completed, the $230 million Kurram Tangi Dam would promote local agriculture and generate 83.4 megawatts of environment-friendly power.

Sharif told the ceremony at the project site that it marks the beginning of “a new era” in North Waziristan and acknowledged the U.S. financial assistance.

“This also declares the end of an era of fear and chaos in an area occupied by terrorists but [the] local population is now regaining control over its affairs,” he said. Sharif said Pakistani troops and law enforcement agencies lost thousands of personnel before evicting terrorists from North Waziristan.

The counterterrorism operation also forced tens of thousands of civilian families to flee their homes, he said, but vowed to complete the repatriation process in the next few months.

The Pakistani military is supervising reconstruction projects in the post-operation phase within the poverty-stricken Waziristan territory bordering Afghanistan.

‘Economic development and employment’

The American and Pakistani partnership will provide irrigation to approximately 6,500 hectares of land and produce 18 megawatts of hydropower, a statement issued in Islamabad quoted U.S. ambassador to Pakistan David Hale as saying.

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“The Kurram Tangi Dam will bring economic development and employment to the region, thereby reducing poverty,” he added

North Waziristan has for years served as a hideout for al-Qaida-linked terrorists and a training ground for the Taliban and its ally, the Haqqani network, that has waged a deadly insurgency against the U.S.-backed Afghan government.

The mountainous region has also been the scene of U.S. drone strikes, killing hundreds of militants plotting attacks against American and NATO forces across the Afghan border.

In his speech Friday, Sharif also vowed to step up the process of reforms in North Waziristan and six other semi-autonomous tribal districts near the Afghan border, which are all governed by the federal government through a set of controversial British colonial-era laws.

The proposed reforms for the poverty-wracked tribal belt, known as the Federally Administered Tribal Areas, or FATA, are primarily aimed at canceling the existing laws and merging the region with the adjacent Khyber Pakhtunkhwa province.

The plan still must be approved by parliament. If enacted, it would set up a five-year merger process, a 10-year development plan and a major upgrade of the legal system, including an additional 20,000 police officers in the sprawling, largely lawless region.