PESHAWAR, July 11: The NWFP government will need to scrap a bigger portion of its annual development programme for the 2003-04 financial year if the province fails to qualify for the second tranche of the World Bank loan, according to sources.

“The future of NWFP’s ADP hangs in the balance as its considerably larger portion depends on the provision of loan by the World Bank,” said a senior development planner of the province.

Sources in a department concerned of the provincial government said that the province might need to drop development schemes involving financial allocations of Rs3.8bn if the province did not get the second tranche.

Officers of the planning and development department and finance department, NWFP, did not rule out the possibility that the province might not qualify for the second tranche of the World Bank loan.

A review mission of the World Bank is expected to visit the provincial capital in the near future to review progress of the provincial government’s reforms programme during the fourth quarter of the last financial year.

The government failed to impress the World Bank by its performance during the first three quarters of the last financial year.

The sources said that a very senior representative of the World Bank had also expressed astonishment over the provincial government’s decision to include a scores of schemes relying on SAC without knowing that the second tranche would be available or not.

“Even if the World Bank decides to extend second tranche of its Structural Adjustment Credit (SAC) facility, the province would not be able to ensure effective and quick utilization of the loan,” said the sources.

Elaborating the point the sources said that even if the provincial government managed to get the loan, the second tranche would be released some time in November or December, almost first half of the financial year would have passed by then.

“In this case, how would the provincial government ensure 100 per cent utilization (in six months) of the funds it would divert from the SAC loan to the ADP,” said the finance manager.

As per NWFP government’s plan, out of the Rs14.696bn total size of its ADP for the 2003-04 financial year, a sum of Rs3.8bn would be diverted from the World Bank’s loan.

The scrapping of the Rs3.8bn portion would make the province to drop the Rs1.24bn Tameer-i-Sarhad Programme under which funds would be provided to the 124 members of the provincial assembly to identify and execute development schemes in their constituency concerned.

Similarly, the development schemes to be executed  in accordance with the directives issued by the provincial chief minister, governor and senior minister of the province would also get slashed. In all, these schemes involve a sum of Rs1.112bn.

Apart from that the Rs3.8bn portion of the ADP to be funded by the SAC tranche also include hundreds of new schemes for which an amount of Rs1.528bn has been specified under the new financial year’s ADP.