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RCB struggles to pay its share of foreign loans

June 08, 2013

RAWALPINDI, June 7: The Rawalpindi Cantonment Board (RCB) has sought help of the federal government to clear its share of foreign loan procured by the centre for provision of water to Rawalpindi and Islamabad from Khanpur Dam.

The RCB contacted the federal government for help when the finance division directed it to clear its share against the loan.

The board has to pay Rs2 billion in installments and the first installment of Rs635 million is due by June end.

The federal government had obtained foreign loans worth Rs6.82 billion for Khanpur Dam Project (Metropolitan Water Supply Project) from Japan International Cooperation Agency (Jica) in 1998.

Under the agreement, the Capital Development Authority (CDA), Water and Sanitation Agency (Wasa) and Rawalpindi Cantonment Board (RCB) will have to pay their share of foreign loan with interest.

CDA is paying its share regularly, but the RCB and Wasa had not paid their share due to shortage of funds. “We are paying our share to the federal government after six months,” said Sanaullah Aman, member engineering, Capital Development Authority (CDA), while talking to Dawn.

He said that the RCB had to pay approximately Rs2 billion and Wasa more than Rs500 million outstanding for the last few years.

Wasa Managing Director Akram Soban admitted that the civic agency had to pay Rs510 million for the payment of its share for the Khanpur Dam foreign loan.

“We are facing financial problem and the Punjab government agreed to give financial help to Wasa to clear its dues to the federal government,” he said.

Mr Soban said that the provincial government has made commitment to the civic agency and it would pay the amount on its behalf in next fiscal year. He said that the Wasa was regularly paying Rs81.200 million per year to Capital Development Authority for the Operational and Maintenance (O&M) charges for Khanpur Dam.

He said the O&M charges were provided to the civic agency of Islamabad as the filtration plant of Khanpur at Sangjani was managed by CDA. “Under an agreement, the dam was supposed to supply 14 million gallon of water daily (MGD) but it releases 6.5 MGD water to Rawalpindi city,” he said.

When approached, RCB Cantonment Executive Officer Rana Manzoor Ahmed Khan said the finance division had asked the RCB to pay Rs635 million to clear the outstanding amount of Rs2 billion.

“The RCB is running its day to day affairs and development projects from the taxes and fees on different subjects; there is no direct funding from the federal government and the funds available with the civic body are not enough to pay foreign loans and simultaneously accomplish development projects,” he said.

He said the loan was obtained by the federal government and burdened the civic agencies.

“We requested the federal government to pay additional funds or pay on behalf of the RCB for the improvement of cantonment areas,” he said.