ISLAMABAD: The centre accused the Sindh government on Sunday of delaying a Thar Coal-based power project and said it had not utilised funds provided by the federal government for the Karachi Greater Water Supply project (K-4).

The federal government hit back at Sindh Chief Minister Qaim Ali Shah also for “using unwarranted language against the centre” to defend the failures of his own government.

At a public function organised by the Karachi Chamber of Commerce and Industry (KCCI), Mr Shah had accused Prime Minister Nawaz Sharif of backtracking on promises to provide funds for the war against terror and delaying major provincial projects.

Also read: Qaim takes a swipe at PM over unmet promises

On Sunday, the finance ministry reacted to the Sindh CM’s complaints, saying the provincial leaders’ statements “were not based on facts” and made it clear that the funds disbursed by the federal government for the K-4 project had not been utilised by the provincial government, hence more funds would not be issued until previous disbursements were effectively spent.

The finance minister’s office refuted the CM’s claims that the federal government had not issued sovereign guarantees for the 1,200MW Sindh-Engro Power Project to Chinese financiers for nearly two and a half years.

It said the centre had agreed at the outset of the project to issue the sovereign guarantee as soon as the Sindh government agreed to provide a counter-guarantee, as the project was a public-private partnership between the government of Sindh and a private party, Engro.

The finance ministry said that the Sindh government had taken a long time to agree to this condition. “As soon as they consented, the government of Pakistan approved the issuance of the sovereign guarantee after proper documentation. This is, therefore, a settled matter,” the finance ministry said.

It said the project’s financiers had approached the ministry a week ago for approval of the terms of financing for the rupee portion ($500 million) and issuance of guarantees for the foreign currency portion ($200 million), which were being processed.

The ministry also made it clear that the centre had not only agreed to issue the sovereign guarantee, but had also constantly included the Thar Coal power project among ‘early harvest projects under the China-Pakistan Economic Corridor (CPEC)’.

“Despite this outstanding support, it is quite regretful that the Sindh Chief Minister has chosen [to use] unwarranted language against federal government,” the ministry said.

Referring to the release of funds for K-4 project, the ministry said the Sindh government had not released any amount for this project so far.

The federal government, on the other hand, had released Rs2.2 billion against a budget allocation of Rs200 million during fiscal year 2014-15. For current fiscal year (2015-16), another Rs500 million has been allocated in the federal budget.

“It is strange that the Sindh CM has disregarded both these facts, i.e. that his government has not expended any expenditure and that federal government has released such a large amount for the project,” the finance ministry said.

Given the significance of this scheme for the residents of Karachi, the federal government would like to assure the government and the people of Sindh that the centre would release grants matching whatever the provincial government was able to spend on this scheme.

The finance ministry said there was also no basis for the assertion that the PM had announced a package of Rs12 billion for the fight against terrorism. “Equally baseless is the claim that the government of Sindh is fighting this war alone from its own resources,” it added.

Law and order remained the provincial responsibility and the province is receiving a significant portion of national revenues for fulfilling such obligations. “Yet, realising the gravity of the situation, Sindh Rangers, a part of federal civil armed forces, had been deployed in Karachi and was leading the war against terror. “All expenses of this force are borne by the federal government,” the ministry added.

Published in Dawn, November 9th, 2015

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