PESHAWAR, Feb 4: The devolution plan introduced on Aug 14 last year will carry a financial impact of around four billion rupees on the cash-strapped NWFP government.

According to sources, decentralization of the provincial government departments to the district level to set up 23 district and one tribal agency governments would carry an accumulative impact of some four billion rupees on the government.

Arrangement for additional funds to meet the financial requirements of the district governments appears to be a daunting task for the government — already undergoing a financial squeeze due to the reduced payments being made by the federal government on account of the direct federal transfers and shortfall that the province recorded under its net hydel profit account.

Initially, according to the sources, the one-time cost of switching over to the new system was estimated to be three billion rupees, while in another study, conducted by the local government department, the cost was evaluated at around seven billion rupees.

However, in a recently-conducted exercise, said a member of the provincial finance commission, the financial impact of the devolution plan had been found to be of some four billion rupees in the case of the NWFP.

The sources said the recurring and non-recurring cost of the plan was around Rs2.5 billion and another amount of around Rs1.5 billion, which the government required to construct new buildings for the district governments and meet expenses required for renovation/repairs of buildings housing district, tehsil and union councils.

They said the non-recurring cost involved funds, which the government need to arrange vehicles, computers, office equipment, furniture and a colossal amount for constructing buildings to accommodate offices of the district and tehsil governments, where required.

Similarly, considerable funds are required to meet the expenses of the district governments under various heads, including utilities and the POL products.