WB dubs progress on trade facilitation project unsatisfactory
Planning Commission and ministry of commerce point fingers at each other.
ISLAMABAD:
The World Bank (WB) has dubbed Pakistan’s multi-million-dollar international trade facilitation project “unsatisfactory” due to a lack of ownership and bureaucratic wrangling amongst government bodies.
A WB report on the “Trade and Transport Facilitation Project II” is the tip of the iceberg, as there are hundreds of such projects where millions of dollars are being spent on consultancies without any optimal outcome. The government is also paying out interest on loans for these projects at a time when other projects, which are needed more, are suffering from lack of funding.
The Washington-based donor agency has said that the project is not en route to achieving the primary goal – the improvement in the performance of trade and transport logistics by diagnosing weak areas.
The latest implementation report on the $25 million project has shown that out of 14 indicators, 10 are completely off the track and three have shown partial improvement.
The project has two components - the $19 million National Trade Corridor Management Unit under the Planning Commission (PC) and the Trade and Transport Facilitation Unit under the ministry of commerce. The entire amount of the project will be consumed by consultancy fees, conduct of studies and purchase of vehicles for the two project directors and senior consultants.
Administrative and infrastructure bottlenecks are considered the main hurdles in the development of a regional trade corridor. A component of the project is designed to reduce the cost of doing business, which is one of the main reasons that Pakistan is unable to fully exploit its potential in global markets.
Despite the fact that a major portion of the funding is for the trade corridor management unit, the official spokesperson of the PC, Dr Asif Shaikh, said that the PC was not responsible for the unsatisfactory status since the project is stationed with the ministry of commerce.
“Due to the vested interests of PC’s former members of infrastructure, the project got delayed for two years,” said Irtaqa Zaidi, the project director of the trade and transport facilitation component. He said the PC had cleared the project cycle-1 (PC-1) of the project in 2006 and the then member infrastructure Syed Asad Ali Shah decided to retain the position of project director. Later on, his successor Akram Malik too retained the position which compelled the WB to delay the disbursements for a couple of years.
“After a WB threat to cancel the loan, the then deputy chairman of the PC, Salman Farooqi, appointed a regular employee as the project director,” said Zaidi. He said the WB has given a satisfactory report on his component and the overall negative report was due to the PC.
One of the former two members of the PC denied that they were responsible for the delay. A former member, who is also a retired federal secretary, said on condition of anonymity that he was never the project director of the PC’s component. He said the PC did issue a notification to that effect but he refused to become the project director.
A PC official said that both government bodies and the WB were responsible for the unsatisfactory status. He said that the ministry took longer than expected to appoint consultants for conducting studies. “The WB also took longer than usual for the appointment of the consultants,” he added.
According to the status report, “there has been a lack of clarity over the role of the National Trade Corridor Management Unit, which has affected their ability to undertake the coordinating role, (which is) so crucial in the programme.”
The report says that Pakistan has not been able to reduce import time. It takes 18 days to import a consignment which is well below international standards. It also failed to reduce cost of import and export during the last two years. Similarly, the documentation needed could also not be minimised. An exporter requires nine documents and an importer needs eight as of now.
The report says that the authorities have yet to initiate measures to rationalise port-related tariffs. The only indicator that showed some progress was a reduction in export time. In January 2009, it took an average of 24 days to export a consignment which have now been reduced to 21 days, says the report.
Published in The Express Tribune, November 25th, 2010.
The World Bank (WB) has dubbed Pakistan’s multi-million-dollar international trade facilitation project “unsatisfactory” due to a lack of ownership and bureaucratic wrangling amongst government bodies.
A WB report on the “Trade and Transport Facilitation Project II” is the tip of the iceberg, as there are hundreds of such projects where millions of dollars are being spent on consultancies without any optimal outcome. The government is also paying out interest on loans for these projects at a time when other projects, which are needed more, are suffering from lack of funding.
The Washington-based donor agency has said that the project is not en route to achieving the primary goal – the improvement in the performance of trade and transport logistics by diagnosing weak areas.
The latest implementation report on the $25 million project has shown that out of 14 indicators, 10 are completely off the track and three have shown partial improvement.
The project has two components - the $19 million National Trade Corridor Management Unit under the Planning Commission (PC) and the Trade and Transport Facilitation Unit under the ministry of commerce. The entire amount of the project will be consumed by consultancy fees, conduct of studies and purchase of vehicles for the two project directors and senior consultants.
Administrative and infrastructure bottlenecks are considered the main hurdles in the development of a regional trade corridor. A component of the project is designed to reduce the cost of doing business, which is one of the main reasons that Pakistan is unable to fully exploit its potential in global markets.
Despite the fact that a major portion of the funding is for the trade corridor management unit, the official spokesperson of the PC, Dr Asif Shaikh, said that the PC was not responsible for the unsatisfactory status since the project is stationed with the ministry of commerce.
“Due to the vested interests of PC’s former members of infrastructure, the project got delayed for two years,” said Irtaqa Zaidi, the project director of the trade and transport facilitation component. He said the PC had cleared the project cycle-1 (PC-1) of the project in 2006 and the then member infrastructure Syed Asad Ali Shah decided to retain the position of project director. Later on, his successor Akram Malik too retained the position which compelled the WB to delay the disbursements for a couple of years.
“After a WB threat to cancel the loan, the then deputy chairman of the PC, Salman Farooqi, appointed a regular employee as the project director,” said Zaidi. He said the WB has given a satisfactory report on his component and the overall negative report was due to the PC.
One of the former two members of the PC denied that they were responsible for the delay. A former member, who is also a retired federal secretary, said on condition of anonymity that he was never the project director of the PC’s component. He said the PC did issue a notification to that effect but he refused to become the project director.
A PC official said that both government bodies and the WB were responsible for the unsatisfactory status. He said that the ministry took longer than expected to appoint consultants for conducting studies. “The WB also took longer than usual for the appointment of the consultants,” he added.
According to the status report, “there has been a lack of clarity over the role of the National Trade Corridor Management Unit, which has affected their ability to undertake the coordinating role, (which is) so crucial in the programme.”
The report says that Pakistan has not been able to reduce import time. It takes 18 days to import a consignment which is well below international standards. It also failed to reduce cost of import and export during the last two years. Similarly, the documentation needed could also not be minimised. An exporter requires nine documents and an importer needs eight as of now.
The report says that the authorities have yet to initiate measures to rationalise port-related tariffs. The only indicator that showed some progress was a reduction in export time. In January 2009, it took an average of 24 days to export a consignment which have now been reduced to 21 days, says the report.
Published in The Express Tribune, November 25th, 2010.