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| 20 March 2004 | Saturday | 28 Muharram 1425 |
WB, ADB commit funds for water, power projects
ISLAMABAD, March 19: The World Bank and the Asian Development Bank made separate commitments on Friday to take major funding initiatives for Pakistan's infrastructure development with primary focus on water and power sectors.
The World Bank and the Planning Commission would put together a Five-year Action Plan for infrastructure projects, mainly water and irrigation projects, in consultation with relevant ministries and any amount of funding required for the first year of implementation would be provided by the World Bank.
World Bank vice-president Praful C. Patel told a news conference that his bank would also increase its funding to Pakistan from the current level of about $600 million to up to $800-900 million per year.
The ADB would provide $300 million by next year to set up a Public-Private Infrastructure Fund, in which the government of Pakistan and the private sector would contribute to launching big infrastructure projects.
The ADB and the investment and privatisation ministry would finalize plans for setting up this fund with input from relevant ministries, ADB country representative Marshuk Ali Shah said.
Most of the delegates speaking at the concluding session of the Pakistan Development Forum (PDF) expressed concern over poor quality of implementation, corruption in utilization of their funds and lack of policy planning and prioritizing in undertaking big projects.
They were also critical of the fact that in the poverty reduction strategy paper released by the government, central importance was not given to sectors like gender equality, population control, preventive health and rural development.
Some of them demanded that PRSP should be expanded through broad-based participation including input from parliament. They also criticized slow progress in the devolution of powers to the local bodies and the low financial and implementation capacity of the district governments.
Nevertheless, a majority of them praised the government for economic recovery, peace initiative with India and offered their support for governments infrastructure development plan although PDF is not a fund pledging forum.
State Bank Governor Dr Ishrat Hussain said Pakistan's annual requirement for capital investment for infrastructure projects was around $2.5 to $3 billion. He said the government was not in a position to provide such large amounts.
At best it could afford to spend about $1.5 billion while keeping the fiscal targets intact and the rest should come from domestic and international private sector.
Finance Minister Shaukat Aziz said any funding coming from any donor would have to be under the umbrella of PRSP to utilize these funds in an efficient manner. He said all the future World Bank funding would be through a mix of IDA (concessional) and IBRD (normal) terms in projects which have justifiable economic return.
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