17 July 2004	Saturday	28 Jamadi-ul-Awwal 1425

ISLAMABAD, July 16: The government told the National Assembly on Friday it was seeking new loans worth $872 million from the World Bank in fiscal 2004-05 - a plan immediately questioned by the opposition.

Replying to a question on behalf of Finance Minister Shaukat Aziz, parliamentary secretary for finance Omar Ayub said the new loans would be used for development projects relating to water, irrigation, agriculture, health, education, tax reforms and financial sectors.

Opposition members questioned the move in view of recent statements by the finance minister that no new loans would be taken due to an economic turn around. MNAs Maulana Abdul Akbar Chitrali of the MMA and Zafar Ali Shah of the PPP sought explanation of the rationale for taking new loans worth $872 million when the finance minister had declared that the present government had broken the proverbial begging bowl.

In response to a question by Maulana Chitrali, Mr Ayub said the new credits or loans from the World Bank would be obtained on soft terms to get fiscal space. He said the last tranche of Poverty Reduction and Growth Facility (PRGF) from IMF equivalent to $255 million was expected to be released towards mid-November.

He said with the successful completion of PRGF in December, Pakistan did not intend to enter into any new arrangement with the IMF.

NWFP LOANS: Mrs Ayub refused to apologise to the house on the demand of MMA leaders who accused him of making a misleading statement that there were no outstanding NWFP dues owed by the federal government.

Mr Ayub was responding to a question by MNA Akbar Chitrali about the total amount of loans obtained by the NWFP from the federal government, and the interest rate charged thereon, as well as the total outstanding dues of NWFP's various heads against the federal government.

Mr Ayub said the NWFP obtained loans amounting to Rs27,386 million from the federal government till July this year. "There are no outstanding dues of NWFP against the Federal Government as on 13th July 2004," he said.

Mr Ayub's contention that NWFP had no proof of a claim against the federal government was challenged by MMA leaders who quoted article 161 of the Constitution and demanded an apology from the young parliamentarian for allegedly misleading the House.

MMA's Liaquat Baloch said that under article 161, provinces have a right to royalty from gas and electricity. He said NWFP's claims are on record and the federal government was not giving the royalty fee to NWFP. "He (Omer Ayub) should apologise," he said.

At this, speaker Chaudhry Amir Hussain asked Mr Baloch to move a privilege motion against Mr Ayub and not agitate the issue on a point of order. On a point of personal explanation, Mr Ayub said he stuck to his earlier stance but then hastened to say that hydel profits was an issue to be resolved by the NFC.

Speaking on a point of order, opposition leader Maulana Fazlur Reman said the NWFP was providing electricity to the entire country but some of its areas were being deliberately deprived of electricity under a plan to create a law and order situation for the provincial government.

Karachi Shipyard: Privatization Minister Dr Hafeez Shaikh informed the House that former prime minister Zafarullah Khan Jamali had stopped the privatisation of Karachi Shipyard during November 2003.

He said a cabinet committee had given approval for the privatisation of Karachi Shipyard whose accumulated losses were more than Rs1 billion. He said the prime minister cancelled the decision to privatise due to strategic defence and security concerns given by the ministry of defence.

NBP Hong Kong: In a written response to a question by MMA's Asadullah Bhutto about alleged corruption and misappropriation of $110 million in the sale of currency bonds by the National Bank of Pakistan in Hong Kong, unearthed by auditors, the finance minister said certain irregularities were pointed out but a detailed inquiry did not substantiate the audit findings.

Funds on PM's directives: The finance minister, in a written reply, told the House that Rs7652.271 million were released to the provinces on the directives of the prime minister for the years 2002-2003 and 2003-2004 for a wide range of development and non-development activities.

Of the total amount released to the provinces on the directive of the prime minister, Punjab received Rs4831.095 million, Sindh Rs489.907 million, NWFP Rs501.925 million, Balochistan Rs1361.214 million and "others" Rs468.127 million.