KARACHI, June 15: Sindh Senior Minister of Health and Coordination Syed Sardar Ahmad announced in his budget speech on Friday that the government was negotiating $1 billion fresh loan from the Asian Development Bank (ADB) to undertake major development activity in Karachi and six other cities of Sindh, namely Sanghar, Badin, Dadu, Mithi/Islamkot, Khairpur and Naushero Feroze.

Ironically, the minister’s announcement of negotiating a fresh foreign loan from ADB came after he complained in the budget speech of “tremendous increase in external and domestic debt and current liabilities of the government over the years.”

Total amount of all liabilities on Sindh now comes to more than Rs122 billion, according to the figures given by Syed Sardar Ahmad, which include Rs71.34 billion foreign debt, while Rs63.79 billion loans were under grace period of repayment.

Then there is a liability of Rs24.64 billion to the federal government on account of cash development loans that carry interest rates of 17 and 18 per cent and mode of repayment is such that very small amount of the principal loan is adjusted.

Moreover, there exist deferred public liabilities worth Rs26.17 billion, accrued since 1970 on account of general provident fund contributions of the public servants. These funds, he said, have been used by the successive governments to finance development expenditure.

But he justified the government negotiations with ADB for $1 billion (Rs60 billion) loan on the ground that infrastructure and social human development in Sindh has lagged behind other provinces.

“To facilitate modern management, and to provide needed infrastructure and services in this province, which is backbone of Pakistan’s economy, the government has sought assistance from ADB for Mega Development Project and Secondary Cities Programme,” he stressed.

The senior minister also spoke of the initiatives and prudent measures taken to create new funds for meeting future liabilities and informed the Sindh Assembly that by next year a sum of Rs25 billion would have been successfully set aside from public exchequer and invested appropriately on account of public liability and social responsibility.

Recounting all such initiatives he said that Rs7.79 billion cash development loans were retired prematurely in the current fiscal year, which is saving Rs5.57 billion on interest payment.

A total amount of Rs15.58 billion loans were retired since 2002-03, which saved Rs15.93 billion on interest payment.

The Sindh government has created a general provident investment fund with annual seed money of Rs2 billion and annual supplements of net receipts of GP fund.

The senior minister disclosed that deposits in Sindh Pension Fund and Social Relief Fund will exceed Rs23 billion next year.

“This is a remarkable achievement, especially in comparison with the performance of previous governments in 1990s when Sindh was surviving on State Bank’s overdraft,” Syed Sardar Ahmad remarked.