PESHAWAR, March 25: The NWFP government is expecting to get second tranche of $90 million under the World Bank’s structural adjustment credit (SAC) facility during the financial year 2003-04, according to official sources.

“NWFP is likely to qualify for the second tranche,” said a well-placed official of the MMA-led NWFP government.

The World Bank released the first instalment of $90 million under the SAC to NWFP at the start of the current financial year, entering into an agreement with the last provincial government against its three-year rollover reforms programme.

Under the agreement, a variety of benchmarks have been set for the provincial government to achieve during the current financial year to qualify for the second tranche of equal amount.

The sources said the province was likely to easily qualify for the second tranche in view of “the largely success story” of the provincial reforms programme during its first year of application, i.e. financial year 2002-03.

“In a recently held meeting, the World Bank’s mission, led by its vice-president Niko Nishimuzu, expressed satisfaction viz-a-viz implementation of the provincial reforms programme and performance of the provincial government to achieve the benchmarks set forth for the first year of its implementation,” said the sources.

Official circles told Dawn here on Tuesday that after the provincial government improved the level of utilization of development funds — diverted from the World Bank’s first instalment of $90 million loan — there appeared to be every likelihood that the province would get the second tranche.

In its half yearly review of the reforms programme, the World Bank had expressed some reservations regarding the slow pace of utilization of development funds partly diverted by the provincial government from the SAC.

“That area, too, has successfully been addressed to by adopting fast track approach to utilize the development funds within the proper period of time,” said the official.

Development planners of the province expressed the hope that the review of the progress of development works at the end of the third quarter of the current financial year would further help allay reservations earlier expressed by the World Bank.

The sources said that after the lending agency expressed reservations the provincial government made the planners to prepare PC-I on development schemes at a faster pace and ensured early provision of funds to start execution of development works under the SAC.

They said the province retired about Rs5.7 billion expensive loan from its over Rs70 billion total debt by diverting Rs2 billion for the same purpose from the $90 million SAC tranche released in July last.

“Under the Medium Term Budgetary Framework (MTBF) — forming integral part of the NWFP’s reform programme — the provincial government had not committed to utilizing the SAC funds for retiring provincial debt during the first year of the reforms programme’s implementation, but the province opted for the same and the move would save over Rs800 million during the current financial year,” said the official.