July 15, 2008	Tuesday	Rajab 11, 1429

KARACHI, July 14: The City District Government Karachi and all the 18 towns are being faced with a serious financial crisis reportedly owing to the inordinate delay in the release of funds and a massive cut in the Octroi Zila Tax (OZT) share by the Sindh government.

Well-placed sources told Dawn that the gravity of the situation could be gauged by the fact that payment of salaries to thousands of employees working in the various towns of the city and many departments of the city government had been delayed. Besides, they added, work on several ongoing development projects across the city had come to a halt owing to the non-payment of the outstanding dues to the relevant contractors.

The sources said that the provincial government had not released around Rs260 million under the head of OZT share and the salaries of the town’s employees pertaining to the month of June to the city government, thus causing a record shortfall of Rs1.05 billion.

A senior official of the finance and planning department said that it would be very difficult for the city government to disburse salaries for the month of July to thousands of its employees.

“Around 20 per cent budget reserved for the salaries of the employees had been deducted and next month the city government would have to spend 20 per cent more on the payment of salaries to its employees,” he added.

Sources said that all the 18 towns of the city were also facing a similar crisis as they did not have sufficient revenue to disburse salaries to their employees or carry out any development work.

Interestingly, all the town nazims whether backed by the Muttahida Qaumi Movement (MQM) or by the Pakistan People’s Party (PPP) are unanimous in criticising the Sindh government over the slashing of their funds, which has reportedly shaken all their estimates.

“The Sindh government has deducted Rs10.4 million (50 per cent) under the head of OZT share to the towns for the month of June,” said Malir Town Nazim Sharafat Ali.

“The salaries of employees and prices of petroleum products have also been increased and under such circumstances how could we pay salaries or carry out development work in the town from next month.”

He said that the provincial government cited no reason for the massive deduction in the town’s grant. “We are approaching the provincial government to get our full share released otherwise we would be left with no other option but to wind up all kinds of work,” the town nazim said.

Sharing similar views the PPP-backed nazim of Gadap Town, Ghulam Murtaza Baloch, said that his town was one of the most affected towns as the provincial government had slashed 35 per cent OZT share in April, 37 per cent in May and for the month of June the deduction reached 52 per cent, which was the highest deduction among all the towns.

He said that he had stopped all development work in the town as it was getting to bear fuel expenses of the town’s vehicles. “We have managed to disburse salaries of our employees but if the situation persists it would not be possible for the town administration to pay salaries with a 20 per cent increase,” he added.

Mr Baloch said that he along with some other town nazims had approached the Sindh finance department but the authorities had failed to come up with a satisfactory reply regarding what he describes as an unjust deduction.

The sources said that work on a number of development projects had been stopped due to non-payment of dues to the contractors. However, they said that the city government contributed Rs170 million from its own resources to complete Nagan Chowrangi flyover, which was all set to open for vehicular traffic within a week.

They said that in the absence of a fully-fledged finance minister the situation was worsening with each passing day and the provincial government would have to take serious measures to deal with the current financial crisis.