LAHORE, May 31: The fate of the $700 million National Drainage Programme (NDP) hangs in the balance as the Japan Bank International Credit (JBIC) has also threatened to cut off funds due to “the slow pace of institutional reforms” two years after the World Bank’s decision to do so.

According to sources in the Punjab Irrigation Development Authority (PIDA) —- created to reform the irrigation department, the JBIC had been suspicious of the level of Punjab government’s commitment to the originally agreed reforms plan.

In order to ascertain the level of government’s commitment, the JBIC has sent an independent team, which is expected to finalize its report by mid-June. The fate of the loan would be determined in the light of the report.

Meanwhile, a World Bank team is also due in the first week of June to re-assess the whole plan.

The government had agreed to form the PIDA to carry out institutional reforms in the Punjab Irrigation Department and ultimately do away with it when the farmers take over management of canals in the Punjab.

The NDP plan hit snags when the Punjab government decided to change it mid-stream. Launched in 1997, the plan envisaged complete transfer of the authority to maintain and manage water courses and canals to farmers. For the purpose, water boards and Nehar (canal) and Khal (water courses) Panchayats were to be formed. The Panchayats were also expected to collect Aabyana and any other taxes and finalize a timetable for the use of water by farmers.

However, after three years of reforms, the Punjab government realised that the model was not workable in its entirety, and tried to amend it to bring it closer to the Indian version of the reform plan which stipulates a participatory model rather than total transfer of power to farmers. The shift offended the World Bank which cut off loan disbursement two years ago.

“The Punjab government is neither against the reforms nor is trying to block them,” says a former employee of PIDA. “It is only trying to bring the model closer to ground realities. Farmers in Pakistan have not achieved the kind of maturity required for managing the irrigation system on their own. They need some training under the participatory model. Three canals that were privatized in Bahawalnagar district as a pilot project have suffered problems on three accounts: collection of funds, management of water and maintenance of canals,” he said.

“The government had tried to convince, with some measure of success, both the World bank and the JBIC that it should be allowed to apply the participatory model for at least two to three years,” says another official involved in the process. However, the sticking point is that the JBIC wants a cut-off date for the experiment. It wants complete transfer of power when the first phase ends whereas the Punjab is insisting on evaluating the experiment and then deciding the future course of action, he said.