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| May 24, 2005 | Tuesday | Rabi-us-Sani 15, 1426 |
WB sets conditions for credit
ISLAMABAD, May 23: The World Bank on Monday set a series of five major conditions to consider approval of a $350 million second phase of the Poverty Reduction Support Credit (PRSC-II) for Pakistan. The conditionalities are broad-based covering almost all areas, from governance to legislation, reforms in water and power sectors and implementation of decisions of the National Electric Power Regulatory Authority (Nepra).
“The World Bank has clearly told the government that unless these conditions are met, the executive board of the World Bank scheduled to meet in July 2005 would not consider the PRSC-II,” said a senior government official.
This was the outcome of a meeting here on Monday between a high-level team of the World Bank and representatives of federal government led by adviser to the prime minister on finance and revenue Dr Salman Shah.
An official announcement confirmed that the bank expressed the need to complete some policy actions in various sectors in order to submit PRSC-II to the World Bank Board in July 2005.
These included issuance of tariff notification for distribution companies, steps for the corporatization of unbundled entities of Wapda, revision of labour legislation, approval of national water policy by the federal cabinet and introduction of civil service reforms in order to submit PRSC-II to the WB Board in July 2005.
The World Bank team held discussions with Dr Salman Shah and reviewed progress on prior actions for the credit programme.
The team expressed its appreciation of the government’s polices for improvement in the macro-economic indicators particularly GDP growth and emphasized the need to control increasing inflation.
The team expressed satisfaction over timely implementation of many of the PRSC-II prior actions.
The WB was very critical of the government for not implementing Nepra’s tariff determinations, saying the government should agree to the regulator as early as possible on the process of determination and notification of tariffs for individual Discos.
It said that such notifications were necessary for the new entities to have their own independent financial flows and to resume all other financial responsibilities.
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