Pak shelves flood-hit areas reconstruction due to funds shortage over transparency issues

January 25th, 2011 - 4:59 pm ICT by ANI  

Islamabad, Jan 25(ANI): The Pakistan Government has decided against taking up major reconstruction and rehabilitation projects in the country’s flood-hit areas during the current fiscal year, owing to a financial crunch and negligible fresh aid commitments from the international community over transparency issues.

The entire portfolio of reconstruction and rehabilitation projects, costing about nine billion dollars (765 billion rupees), has been set aside because of a shortage of funds, the Dawn quoted a Planning Commission official, as saying.

However, he added, the government had decided to simplify the approval process for such projects to avoid the normal course, which involved formulation of feasibility studies, followed by their technical assessment by the Central Development Working Party and the Executive Committee of the National Economic Council.

“The objective is that these projects may be started without wasting time in case the international community makes available fresh funding,” said the official.

The international community- particularly the United States, the World Bank and the Asian Development Bank- had offered to divert funds from the existing loan portfolios to reconstruction and rehabilitation activities, the official said, adding that it had, however, also begun interfering in the implementation process by raising transparency issues.

“This was not acceptable to Finance Minister Dr Abdul Hafeez Shaikh, who took a strong position against diversion of international funds from ongoing programmes and warned the international donors against maligning the government and its institutions,” revealed the official.

He said that since most of the earlier projects destroyed by the floods had proven benefits, as they had been serving the needs of the people and the economy, feasibility studies and concept papers were not necessary for them.

“What we need is to update their construction cost and there are set procedures to extrapolate the amount under the Pakistan Engineering Council`s standards,” he said, adding that institutional lenders like the World Bank had advised the government that its fiscal position would weaken if it had to bear a large part of the rehabilitation and reconstruction cost.

“Estimates of the reconstruction cost range from Rs662 billion (4.5 per cent of GDP) to Rs779 billion (5.3 per cent),” according to the World Bank. (ANI)

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