The World Bank and the ADB have jointly offered around $800 million to help undertake a five-year Mega City Renewal Programme (MCRP) to rehabilitate Karachi, Lahore, Rawalpindi and Peshawar.

These international financing institutions (IFIs) have, according to press reports, agreed to help stop the running down of these important cities. The ADB Country Director has been quoted saying that the infrastructure of these four cities was in a bad shape which needed to be urgently restored.

One would wonder why Quetta has not been included in the list of mega cities picked up for rehabilitation. An ADB team visited Quetta recently and a tripartite meeting between the officials of Balochistan, the ADB and the PPTA consultants' team, was held. The main aim of the meeting was to reach overall understanding on the programme objective pertaining to Balochistan Resource Management Programme (BRMP).

The joint offer of around $800 million to help Pakistan undertake a five-year MCRP to rehabilitate Karachi, Lahore, Rawalpindi and Peshawar has generated interest. Besides the joint offer, the ADB has been exploring a programme for development of Balochistan through a loan of about $120 million for multiyear BRMP during 2004.

The loan funds jointly offered for MCRP as well as the ADB offer of loan for BRMP, would eventually add to the overall foreign debt. In addition, there are a number of development projects in the pipeline for possible financing from the IFIs and other sources.

Besides the federal and provincial government projects, the City District Governments of Karachi and Lahore as well as the public sector enterprises (PSEs) such as Pakistan Steel have their own development projects, for realization of which they will also be availing loan facilities from different sources including the IFIs.

Naturally, this would enhance the overall foreign currency debt stock as well as the debt servicing burden; possibly to the levels that are not sustainable. The government might carefully review and prioritize each project and consider taking up with the IFIs only selected components of the high priority projects, which otherwise cannot be financed locally or through other more appropriate foreign funding.

The federal government might have to devise appropriate criteria for prioritizing and selection of urban infrastructure projects for loan financing from the IFIs.

Karachi, Lahore, Rawalpindi and Peshawar, selected for MCRP have suffered in the past due to common reasons such as shortage of funds, wastage of resources, internal bickering and petty politics, carefree attitude of the people in power, red tape and vested-interest, pressure on utilities due to migration of people from rural areas, etc.

The cities also suffered as many of the city stakeholders were enjoying the benefits but were not contributing for building or maintaining the city infrastructure.

It is only recently that the Karachi Port Trust (KPT) has started taking more interest in the planning and implementation of infrastructure development projects. Situation in Karachi and for that matter in other selected cities would improve fast if other stakeholders also join in the effort and help develop and finance the physical infrastructure.

The reasons mentioned above can be removed if all of us do the soul searching and initiating corrective measures. The federal government might consider a joint meeting of all these cities and the concerned officials and asked to improve operations through remedial measures.

The mega cities in the country are suffering from shortages of water, electricity, gas, transportation and housing, besides problems of sewerage, waste disposal and sanitation.

Roads are in a very bad shape and absence of link roads, overhead bridges / underpasses cause traffic congestions at a high economic cost. One point of view is to discourage migration of population from the rural areas.

The inflow could be brought down if rural areas are provided with more economic opportunities and a socio-economic infrastructure on a priority basis. However, it might not be very practicable now as the government does not have the resources for that.

Inflow of population has beneficial aspects as well. City dwellers generally loath hard physical labour for building infrastructure projects. Moreover, many migrating people bring capital, knowledge and expertise, all of which are in high demand internationally even in the capitals of the developed countries.

The inflow might be taken into account in the planning process and all new projects and utilities should be designed accordingly. Through frank discussions the situation in each city can be better understood.

This process might help chalk out future course of action including the programme components for which financial / technical assistance from the IFIs would be beneficial.

In the absence of a duly approved master plan and without proper home-work by the concerned authorities, the discussion might not be meaningful for further planning or seeking assistance from the IFIs.

All cities are in bad shape more due to poor collection of solid/municipal waste, overflowing sewerages with no or little arrangement for treatment of municipal or industrial effluents.

This has mostly contaminated potable water being distributed in the cities. Compost plants for processing of solid waste or waste to energy plants are being considered in different cities but actual progress has been slow. It is proposed that rehabilitation of these areas might be prioritized.

Under the MCRP, the two IFIs would reportedly be holding high level talks with the government to finalize the Action Plan, which would aim at removing air pollution and rehabilitating roads and important buildings.

In addition, details would be discussed on how to help improve water supply, sewerage, sanitation and solid waste management of these four cities. It is suggested that institutional and organizational arrangements might be considered and improved by the government prior to start of discussions with the IFIs.

Officers from the three tiers of the government might attend the meeting and decide on the priorities of project elements for each of the mega city. It is possible that many of the things under MCRP can be locally financed for which the government might consider to induce the banking sector to come forward.

In the meantime the government might consider setting up the Municipal Bank in each province to assist the government in matters to be taken up with the IFIs. These banks in due course would be financing some of the needs of the mega cities. These banks would be concentrating on financing development needs of the cities presently not included for rehabilitation under MCRP.

Of all the cities included under the MCRP, Peshawar is said to be really in worst shape and therefore needs rehabilitation on urgent basis. However, the ADB Country Director has been quoted saying that Lahore and Karachi would be considered for early rehabilitation.

It is suggested that work on rehabilitation of all cities might be started concurrently. Also, Quetta and Hyderabad being the most under-developed cities might also be made a part of MCRP.

The city/district governments generally have real or perceived differences with the provincial governments on matters such as allocation of functions, delegation of powers, sharing of funds, transfer of institutions/utilities in the spirit of power devolution, etc.

The nature and severity of difference might not be the same in all the areas but it appears the relations are not as harmonious as desirable for accelerated development of the cities.

The stakeholders are urged to amicably resolve the differences, if any, prior to start of discussion with the IFIs and their consultants on the MCRP and the BRMP. The ADB team with PPTA consultants has already met the Chief Secretary, Government of Balochistan on April 21, 2004.

It has been said that a team of consultants would be travelling throughout Balochistan over the coming weeks to conduct technical studies and hold wide-ranging consultations on the design of the proposed programme, of which one major focus is to find ways to improve the provincial government's financial position and to support better arrangements for the planning and financing of delivery of key services like health, education and water supply at local government levels.

This appears to be a wide-ranging programme spread over many areas of critical importance. The government might consider giving more attention to BRMP and transfer experienced officers for supporting the provincial authorities.

Further, there might be the need to induct Pakistani consultants for many of the programme components, financed by the federal government. The government might consider urging the trade, industry and institutions from other provinces to undertake in Balochistan welfare projects such as schools, colleges, health units and water schemes, etc for supporting the provincial authorities and improving the life of the people.

Normally, achievement of project objectives is directly linked to the value-for-money achieved in implementation. Higher the value for money achieved the better impact on the quality of life of the affected people.

The implementation of MCRP and BRMP should be made through good governance more efficient and orderly, with proper monitoring of the pace and quality of work and strict auditing of the expenditure.

The aim should be to keep wastage and leakages to the minimum and make the entire process cost-effective. The cities might be required to improve operations through good governance.

As part of the MCRP, the cities might be asked to raise own resources by rationalization of charges for water, sewerage, fire, waste collection, property taxes and better recovery.

The cities might be required to submit cash flow projections in support of their loan request for rehabilitation project and should demonstrate that they will be in a position to service the debt from own cash generation and would not be dependent on the government.

If any land is to be sold to generate funds, the sale should be advertised well in advance and sale to be made in a transparent and fair manner. The cities might be asked to confirm that status of land allocated for amenity projects would not be changed under any circumstances.