ISLAMABAD, April 29: The Asian Development Bank (ADB) has accepted the coalition government’s request for $650 million emergency budgetary support.

“We have decided to disburse $650 million on a fast-track basis to help improve the government’s budgetary position and contain fiscal deficit,” ADB’s Country Director Peter L. Fedon told Dawn here on Tuesday.

He said the remaining $1 billion funding, out of the $1.9 billion annual assistance lined up for the calendar year 2008, was being accelerated and maximum funding would be made available before June 30 this year so that the government could manage its financial affairs.

Earlier, Saudi Arabia had pledged $300 million oil facility and China promised to help the new government with $500 million balance of payment support.

According to Finance Minister Ishaq Dar, there was a Rs522 billion ‘over-run expenditure’, which if not arranged by June 30, fiscal deficit would go as high as nine per cent against the target of four per cent set for the current financial year.

He said Rs522 billion was desperately needed to contain the deficit at six per cent of the GDP.

When asked about the over-run expenditure, the ADB country director said the new government understood this issue better. But as far as the ADB was concerned, he said, it would play its role and help the new government by providing timely financial support.

Responding to a question, he said the ADB had proposed a tax on agriculture income and on services sector for new resource mobilisation.

“More taxes or any other measure needed for this purpose will have to be decided by your government and we cannot say anything about it,” Mr Fedon said.

He agreed that the increasing international oil prices would cause more problems for countries like Pakistan. International prices, he said, were intensifying food inflation throughout the world and everybody appeared to be helpless.

Asked about the growing energy problems, he said that his bank had provided $2 billion to Pakistan’s distribution and transmission companies to cope with power pressure. He called for establishing more power plants by the private sector to meet 3000MW of daily electricity shortage. He was of the view that the tariff issue needed to be settled to attract more IPPs in the country.

Answering another question, he said the ADB would provide necessary support to Turkmenistan, Afghanistan, Pakistan and India to help build TAPI gas pipeline.

“We are trying to be an honest broker to push forward the regional cooperation in the shape of the gas pipeline project,” he said.

However, he said, the bank was not responsible for establishing any consortium to arrange funding for the project and that it had to be decided by the countries involved in it.