RAWALPINDI, Aug 26: The scope of the forthcoming Rawalpindi Environmental Improvement Project (REIP) is likely to be reduced as the Asian Development Bank (ADB) is willing to provide only a part of the $60 million loan to the Punjab government on soft terms
, official sources told Dawn on Thursday.
They said the bank was willing to provide only $40 million as soft-term loan, while the remaining $20 million would be made available on 'tougher' conditions. The sources said the provincial government had time and again asked the bank to provide the complete loan on soft terms since it was not in a position to repay the loan on "higher" interest rate.
They said a number of meetings had also taken place recently between the government and the ADB teams in a bid to influence the bank to do some more favour in this regard. But no positive response had been received from the bank so far. However, they said the final loan negotiations would be held within a couple of months".
At the moment, the sources said, the government had no other options but to accept the "mixed" package or reduce the scope of the project to the level of $40 million, which the bank was willing to provide on soft conditions.
The officials said the provincial government's demand was justified because the bank had provided, as soft-term loan, 91 per cent cost of the Rs4 billion phase-I of the REIP, also called Urban Water Supply and Sanitation Project (UWSSP).
But for the execution of Phase-II, the bank wanted to provide more than 33 per cent of its loan on higher interest rate. The officials said the scope of the project mostly consisted of the completion of schemes which were not executed during the UWSSP.
According to the aide memoire signed by the Punjab government and ADB on March 24, 2004, the REIP had to be completed in five years with an amount of $85.71 million, of which the ADB was to provide $60 million as loan. The Punjab government had to facilitate $5 million per year.
Initially, the sources said, the Water and Sanitation Agency (Wasa) was also expecting initiation of work on Daducha and Chirah dams during the execution of the REIP. However, the bank was not willing to provide soft-term loan for the initiation of work on either of the small dams for the time being.
Therefore, the National Engineering Services of Pakistan (Nespak), which was conducting technical study for the REIP, had to drop the proposal of dams at the last moment despite strong objections of Wasa. The water agency wanted the construction of water reservoirs to coup with the ever-increasing water demands of its growing number of consumers.
The scope of the project, as prepared by Nespak, included establishment of a sewerage treatment plant, laying sewerage network and water supply lines, storm water drainage, improving solid waste management of the Tehsil Municipal Administration by providing more vehicles, landfill site for disposal of garbage, shifting slaughter houses from the city areas.
