Punjab eying Rs20.5 billion foreign money

Province sticks to claim to not take aid or grants, but plans to go for loans.

ISLAMABAD:

Punjab is eying over Rs20 billion in foreign assistance to finance various projects next year, which is 163 per cent more than what the province received this year.

The latest revelation comes on the heel of the provincial government’s demand from the federation to allow it to borrow from international lenders, which has not been accepted due to serious financial consequences.

Official documents show that the Punjab government has estimated to receive Rs20.5 billion in foreign assistance in financial year 2011-12 against actual disbursements of Rs7.8 billion in the outgoing financial year.

The estimated amount is Rs12.8 billion or 163 per cent more than this year’s assistance. Out of Rs20.5 billion, the provincial government is estimating that it will receive Rs18.6 billion in loans and Rs1.9 billion in grants.

In May, Punjab Chief Minister Mian Shahbaz Sharif had denounced foreign aid, terming it an act amounting to compromising sovereignty of the country. He had announced that he would break the “begging bowl”.

Senator Pervaiz Rasheed, chief spokesman for the Pakistan Muslim League-Nawaz, defended his party’s decision to borrow money. “The Punjab government would not accept any loan or grant that is attached with political strings but it is open to all types of foreign assistance that is not linked with conditions,” he said.

A close look at the projects show that the Punjab government is accepting nominal assistance even for projects that otherwise could be managed domestically. The Punjab government would accept Rs5 million in grants from the European Union under the Access to Justice for Poor project. It is also expected to receive Rs14 million in grants from Australia for optimising canal and ground water management project.

Furthermore, Japan is to give Rs974 million for sewerage and drainage system and Lahore and Water and Sanitation Academy projects. The provincial government has also estimated to receive Rs900 million for Punjab Economic Opportunities Programme.

Loans

The Punjab government would take Rs2.5 billion in loans from the International Development Agency, the concessionary loan arm of the World Bank (WB), for Land Records Management and Information System Programme.

The WB’s commercial loan arm would also extend Rs3.5 billion - Rs2.3 billion for rehabilitation and modernisation of Islam head works and Rs1.5 billion for Punjab Municipal Services. Another multilateral donor, the Asian Development Bank would extend Rs6.2 billion in loans and a major chunk of Rs4.2 billion would go for Punjab Irrigated Agriculture Development project. For the outgoing fiscal year, the ADB had committed a total of Rs5.8 billion but gave only Rs2.2 billion.

For sustainable livelihood in Barani areas, Rs650 million has been committed by the ADB. For government efficiency programme, a Rs200 million installment would be released next year. For renewable energy development programme, a Rs870 million commitment is on the table.

The Punjab government would also take Rs3.5 billion loan from Japan. The money is sought for two projects – Lower Chenab System Rehabilitation project and improvement for irrigation system. The provincial government is eying Rs2.3 billion loan from France for water resources in Faisalabad and construction of waste water treatment plant in Lahore.

An amount of Rs180 million is to be obtained from the Organisation of Petroleum Exporting Countries for establishment of government institute of emerging technologies at Raiwind Road, Lahore.

Published in The Express Tribune, June 8^th, 2011.