ISLAMABAD, Jan 25: The World Bank has expressed serious concern over obstacles to power sector reforms and national water policy’s approval in Pakistan, and linked the disbursement of the $300 million Poverty Reduction Support Credit (PRSC-II) to tangible progress on these issues.
Informed sources told Dawn on Wednesday that the World Bank had also called for speeding up amendments in labour laws, education reforms and new competition laws. A four-member bank appraisal mission on Wednesday held a meeting with top brass of the ministry of finance to discuss these issues.
They said Secretary Water and Power Ashfaq Mehmood on Wednesday wrote a letter to the Prime Minister’s Secretariat and Cabinet Division to immediately take up National Water Policy for approval.
Unless the water policy was approved by the cabinet and made public, the World Bank covenants would remain uncertain and the bank might ask for its review, he added.
The National Water Policy was approved in principle by the prime minister.
However, cabinet’s approval would set the stage for the World Bank’s funding for major initiatives in Pakistan’s irrigation schemes and big dams under the long-term strategy.
On the question of power sector reforms, the problem primarily revolves around the ministries of finance and water and power because the two ministries have not been able to take a decision on subsidy payments to distribution companies of Wapda.
Since the issue of subsidy remains unresolved, the distribution companies of Wapda could not be given financial autonomy and they continue to be run under a uniform Wapda tariff— a central point of dispute in the power sector reforms. These companies have been registered as separate entities under the 1984 Companies Ordinance, but long delays in the announcement of their separate tariff has been a major problem for three years.
The World Bank has already agreed to abolish the Monopoly Control Authority and replace it with a National Competition Commission to synchronize all regulatory authorities for creating an overall competitive environment in the country.
