Govt eyes $1.5bn in project funding from World Bank
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ISLAMABAD: Pakistan on Monday sought expeditious approvals from the World Bank to ensure disbursement of about $1.5 billion project financing before the fiscal year ends on June 30.
Adviser to Prime Minister on Finance and Revenue Dr Abdul Hafeez Shaikh had a meeting with the World Bank Country Director Patchamuthu Illangovan and discussed the ongoing projects being supported by the bank. It was reported that Pakistan had cleared almost all the WB-funded projects that have been delayed due to political transition in the country.
Shaikh assured the WB official that all approvals on the part of government will be accelerated to ensure timely disbursement and emphasised the need to “expedite the finalisation of the new financing in pipeline before the end of FY19,” according to a brief statement.
The two sides also agreed that the WB CEO Kristalina Georgieva would meet Prime Minister Imran Khan in China during his upcoming visit later this month.
A senior government official told Dawn that almost all the bank-funded projects that have been facing delays due to political transition in the country had now been cleared except for a $500 million project for regional connectivity through a road network. He said the project involved development of similar road facilities in Afghanistan and Tajikistan.
The meeting was informed that Central Development Working Project (CDWP) had cleared about half a dozen WB-funded projects last week including a $400m FBR strengthening and reform scheme, Rs78bn Sindh BRT, Rs85bn Balakot Hydropower, Rs553m KP Hydropower development, Rs48bn transmission line under CASA-1,000 besides the concept paper clearance of Rs65bn Yellow Line Bus Rapid for Karachi. A total of about 20 projects have now been approved by the CDWP or the Executive Committee of the National Economic Council (Ecnec).
About 27 development projects under the federal and provincial governments were not getting planned funding from WB during the year. The delays in 2018-19 disbursements could also affect the project pipeline for FY20, which the Economic Affairs Division was trying to avoid.
Such delays are not only impacting flow of funds from the WB but also other lending agencies and most of these development loans are relatively cheaper and involve decades of repayment schedules including grace periods.
Officials said WB and the government have held a series of meetings in the recent weeks to overcome some of the ‘cross-cutting bottlenecks to the $2.3bn undisbursed portfolio for the current year’ so as to protect the $7.4bn overall funding pipeline of 40 approved projects. It was decided to push expedited processing of $480m of held-up funds including $178m at the federal level and $308m at provincial level.
About $1.2bn for 12 projects is currently not getting WB releases due to procurement issues, sometimes because of conflicting guidelines of the Bank and Pakistan’s Public Procurement Regulatory Authority (PPRA). Another $1bn for 10 projects is not getting planning funding due to staffing issues as the authorities fail to appoint project directors and related technical experts while about $160m for five projects remain without scheduled funding because of delays in opening of relevant bank accounts.
It has been observed by WB that 12 projects involving $1.2bn disbursements this year are facing delays due to decision making issues by planning bodies or perceived lack of clarity on authority to use procurement rules of the international financial institutions and concerns about the liabilities which could be unblocked with action by the federal government. Also, $1bn funds could be unlocked with appointment of full-time project directors to get 10 major schemes rolling.
Published in Dawn, April 23rd, 2019
