War on terror bills: Pakistan forgoes $1.3b claim under CSF

Finance ministry official says amount was ‘overstated’.

Shahbaz Rana July 10, 2012


Pakistan seems to be in a giving mood, not only has it decided to relinquish transit fees for Nato supplies, it has also given up on a huge chunk of another payment from the US.

Contrary to an official statement issued earlier, Pakistan has decided to forgo $1.3 billion of the total $2.5 ‘reconciled’ outstanding amount the US was to pay under war on terror reimbursement claims of the Coalition Support Fund (CSF).

The $1.3 billion has been excluded from the “reconciled claims of $2.5 billion” for the period from July 2010 to April 2011, said a senior official from the finance ministry. The amount is even more than the $900 million the US had refused to pay.

This means the earlier total bill of $3.4 billion was overstated by a whopping $2.22 billion or 65%, and raises serious questions over the credibility of the country’s financial managers.

The official was not willing to say anything more except that the bills were inflated. This is contrary to what senior functionaries had said earlier.

Finance Minister Dr Abdul Hafeez Shaikh had told the media at a news conference the reconciled CSF claims amounted to $2.5 billion. The ministry’s spokesman Rana Assad Amin was not available for comments despite repeated attempts to contact him for three consecutive days.

Recent reports following the reopening of Nato routes suggest the US will now pay only $1.18 billion under the CSF, which Washington disburses after a rigorous 11-stage scrutiny process against expenditures Pakistan has already incurred in its fight against terrorism. The finance ministry official said the money will be released in the next 15 days.

At the same news conference which Dr Hafeez Shaikh had addressed earlier regarding the disbursement of the reconciled amount, he said that prior to the May 2 raid on a compound in Abbottabad the US had started rejecting 35-40% of the amount Pakistan claimed.

Finance ministry officials agreed that while the US would disburse the entire proposed amount in the initial years of the war, it started rejecting 5-10% of the bill soon after.

The US had however stopped disbursing the fund since December 2010 in an attempt to coerce Islamabad into accepting its demands. Up till then the US had disbursed a total amount of $8.6 billion against total claims of $12 billion, said a government functionary requesting anonymity.

Pakistan has also taken back its demand of $5,500 transit fee for each Nato container crossing through its territory. Some reports suggest the move is to dispel the impression that the route was blocked for financial gains and not over the US apology for the Salala air raid.

The $5,500 included $1,000 for repairing roads damaged due to heavy traffic movement, said communication secretary Anwar Ahmad Khan in a testimony to the Public Accounts Committee. The government has not yet divulged how it intends to repair the damaged roads. It is said the national exchequer has already sustained a loss of Rs124 billion on account of Nato containers passing through its territory.

Correction: An earlier version of this article incorrectly stated Rs124 billion as $124 billion. The error is regretted.

Published in The Express Tribune, July 10th, 2012.


Parvez | 9 years ago | Reply

This is why the Americans and others love doing business with Pakistani leaders because everything is negotiable. Its only the Pakistani people who get a raw deal from their leaders.

Jim | 9 years ago | Reply

So what's new? Lying, cheating, denial, misrepresentation, distortion...Pakistan lives in an alternate universe. nothing is what seems. Its rulers live in a make-believe world full of delusion and self-deception. Pity the poor, honest, hardworking people...they were not only handed a moth-eaten state, but now have to contend with a ruling class with moth-eaten brains and no morals...

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