ISLAMABAD: The World Bank has warned Khyber Pakhtunkhwa Governor Iqbal Zafar Jhagra that KP could lose at least $27 million meant for economic revitalisation of the province and tribal areas, if the government does not approve the project concept (PC-1) for two key donor-funded projects.

The Multi-Donor Trust Fund (MDTF) is one of the largest donor pools created to fund reconstruction and rehabilitation efforts to help secure livelihood for families affected by the military operations carried out in 2009 and onwards.

If the PC-1s for the Economic Revitalisation of KP and Fata (ERKF) and the Rural Livelihoods and Community Infrastructure Project (RLCIP) are not approved immediately, the World Bank has warned in a letter, staff and resources will be issued one-month termination notices on Feb 28, in anticipation of their closure on March 31.

Delay in approval of PC-1 can lead to dropping of two key initiatives

The letter, written by World Bank Country Director Patchamuthu Illangovan, also points out the political wrangling that has marred the projects and informs the governor that terminated staffers have already sought a temporary stay order from the court.

The governor has been requested to give his personal attention to the approval of the PC-1s of these projects so that the funds earmarked for them by the World Bank could be processed.

Failure to do so will lead to the withdrawal of funding, depriving “temporarily displaced persons and crisis-affected economic centres, which are critical for job creation and restoration of livelihoods” of much-needed finances, the letter warns.

The MDTF for KP, Fata and Balochistan, which was established in August 2010, is administered by the World Bank and supported by over a dozen donor countries – Australia, Denmark, the European Union, Finland, Germany, Italy, Netherlands, Norway, Sweden, Switzerland, Turkey and the UK.

An official at the Fata Secretariat told Dawn on condition of anonymity that three projects were currently financed under the MDTF. The ERKF gives cash grants for crisis-affected businesses, such as marble factories, while the RLCIP helps improve livelihoods of marginalised and low-income communities in Fata. The third is a Governance Support Project meant for capacity building of government officials.

“The services of 64 ERKF and RLCIP officers were terminated in Dec 2016, but since their contracts lasted until March 2017, they have sought a stay order from the Peshawar High Court,” the official said.

Due to political wrangling, the PC-1s, which were to be approved in August or September 2016, have been put off and there are fears that the projects, which have another two to four years to go, could be shuttered prematurely.

Talking to Dawn, Fata Secretariat Director General (projects) Islam Zeb confirmed the receipt of the World Bank letter, but insisted that the issue was not as simple as it seemed.

“The first phase of the project ended in 2014 and since then, we have been requesting the World Bank to release the funds for the second phase. Due to the delay, we failed to pay the staff salaries and had to terminate their services, but they went to the court and sought stay orders,” he said.

“It has been decided that the PC-1s will be approved during the March 9 meeting of the Fata Development Working Party (FDWP) and sent to the World Bank,” he added.

Mohammad Zahoor, who leads the MDTF’s Governance Support Project in Fata, told Dawn that both PC-1s would have been approved on Feb 16, but were delayed due to certain amendments.

“We have added some water supply schemes and other projects for community welfare and now it is expected that the PC-1s will be approved on March 9,” he said.

In an email response to a set of questions asked by Dawn, World Bank’s communications officer Mehreen Saeed said: “The World Bank regularly communicates with federal and provincial governments and state institutions on its programme[s]. This includes the Fata Secretariat with whom we closely collaborate to assist the people of the area. The implementation of livelihood activities is an important priority, including its acceleration through swift decisions.”

Fata Additional Chief Secretary Fida Wazir could not be reached for comment, despite several attempts.

Published in Dawn, February 27th, 2017