World Bank to reduce loan for Punjab’s health sector

Province’s ‘moderately satisfactory’ performance in project implementation will affect 18 districts

ISLAMABAD: The World Bank is likely to cut the intended loan for health sector reforms in Punjab by $20 million owing to slow progress and frequent administrative changes at the top level, depriving people in 18 low-performing districts from its intended benefits.

The $120-million loan, which was to help Punjab in implementing reforms and reach districts that were deprived of access to healthcare, has been faced with delays and inconsistent policies, much to the dismay of the World Bank that has deemed the progress only “moderately satisfactory”. It has now decided that it will cancel the $20 million grant it had sanctioned for the project.



Additionally, the World Bank has also decided to reduce the pace of disbursements of the $100 million cheap loan that the bank approved for the project in May 2013.



After a lapse of over two years, the provincial government could utilise only $27.3 million and the country is paying commitment charges on the remaining unutilised amount.

The World Bank had approved an IDA loan, which is the cheapest money coming at around 1% interest rate, and every country has a fixed quota. Punjab’s failure to fully utilise these funds has also denied the country the benefits it could have availed by investing the loan elsewhere.

World Bank’s position

“Substantial and frequent changes in the Department of Health (DOH) management have severely affected the overall progress of the reform programme during the first year of the project implementation,” stated the latest project implementation status report of the World Bank. The project had a very slow start with changes in the senior management of the department and elections, it added.

During the project implementation period, the Punjab chief minister changed over half a dozen health secretaries, which delayed full operationalisation of the project. There is also no full time Health Minister in Punjab.



Some reforms initially proposed under the project have been dropped and a $20 million grant for reforms will be cancelled, said Dr Tayyub, Senior Health Specialist of the World Bank.

One important goal of the project was to ensure that 75% children of up to two years of age receive the basic package of nutrition. The baseline was only 10% and actual results are not available.

The World Bank also wants to increase coverage area in the 18 districts.

Dr Tayyub said that the project will now be restructured and the Bank has increased its focus on nutrition. He said that even after restructuring, the project would take at least six more months before it starts picking up pace.

The development will affect 18 districts including D.G Khan, Rajanpur, Muzaffargarh, Jhang, Bhakkar, R.Y Khan, Narowal, Bahawalnagar, Bahawalpur, Pakpattan, Kasur, Vehari, Lodhran, Chiniot, Khanewal, Okara, Hafizabad and Layyah.

As a result of restructuring, the project closing date will be extended by one year - against the original date of December 2017. The report shows that most indicators remain behind deadlines.

It said that Punjab government and the World Bank have agreed to carry out restructuring of the project by September 2016. It will be second restructuring, as the first restructuring was done even before the project became effective.

The bifurcation of Punjab health department into two has caused delay in implementation of the project, said Mohammad Khan Ranjha, project director of the Punjab government. He admitted that frequent administrative changes were the main reason behind the delay.

Published in The Express Tribune, September 9^th, 2016.

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