RAWALPINDI, Sept 10: The Provincial Development Working Party (PDWP), Government of Punjab, has cleared the $85 million PC-1 of Rawalpindi Environment Improvement Project, official sources told Dawn on Friday.

The sources said the PDWP had cleared the PC-1 during a recent meeting and dispatched it to the Executive Committee of the National Economic Council (Ecnec) for final approval.

The Ecnec is scheduled to approve the PC-1 within one month, which would be followed by the final loan agreement between the Asian Development Bank (ADB) and the Punjab government scheduled to be held in the middle of November.

The Water and Sanitation Agency (Wasa) had submitted the PC-1 of the project to the Housing Urban Development and Public Health Engineering Department (HUD&PHED), Lahore, a couple of months back after a delay of more than two months, they said.

The agency had delayed the PC-1 because of its reservations about some of the works included in the project. Besides, the agency also wanted construction of a small dam in order to meet the growing water consumption of its over 1.3 million consumers. However, the demand was not accepted apparently due to "technical and financial reasons".

The HUD&PHED had submitted the PC-1 to the PDWP, which is the provincial body for clearing such projects. Officials said the Asian Development Bank would provide $60 million for the project and an amount of $20 million would be facilitated by the Punjab government with a ratio of $5 million per year. The Tehsil Municipal Administration (TMA) would also provide $5 million for the execution of the project, which is scheduled to be completed by October 2009.

Work on the project would be started earlier next year and prior to that a new Project Management Unit (PMU) would be established in Wasa. The new PMU is likely to be consisted of majority of the officials of the now dissolved PMU of the recently completed Urban Water Supply and Sanitation Project (UWSSP), the sources said.

It may be mentioned that the dissolved PMU had delayed the execution of the UWSSP for more than two years, and if the same officials are given another chance, the completion of the REIP within the stipulated time would be impossible.

The sources said the ADB had also refused to provide the whole $60 million as a soft-term loan for the REIP. The bank wanted to pay only $40 million as soft-term and the remaining $20 million as normal loan despite the fact that the bank had already provided $80 million soft-term loan for UWSSP, phase-1 of REIP.

That is why it was also expected that the Punjab government might reduce the scope of the project before clearing the PC-1 for approval by the Ecnec, they said. However, the provincial government did not reduce the scope of the project.

The technical survey of the project has already been completed by the National Engineering Service of Pakistan (Nespak) earlier this year. Initially, ADB had provided a grant of $350,000 to Nespak for the survey, but, later on it sanctioned more funds for the engineering organisation to extend its survey to some more new works.