ISLAMABAD, Nov 13: The Asian Development Bank (ADB) and the United Kingdom have decided to offer $210 million to Pakistan for improving social services but linked the proposed assistance to a transparent use of funds and accountability.

Official sources told Dawn on Saturday that a three-year funding programme, mainly for Punjab, would be formally approved by the ADB's board of directors on Nov 19 at Manila.

The programme will be from March 31, 2005 to March 31, 2008. The first, second and third tranches amounting to $80 million, $55 million and $45 million, respectively, will be made available in "compliance with tranche release conditions following loan effectiveness".

The ADB loan will be provided under the Ordinary Capital Resources programme, while Britain's Department of International Development will extend $30 million in grant.

The loan and grant are meant for the proposed Punjab Devolved Social Services Programme aimed at improving health, education, water supply and sanitation services in the province. It is the first ADB-supported programme loan for the social sector of Punjab.

Sources said that although ADB president Tadao Chino had made recommendations for $180 million loan, he had sought assurances from the government of Pakistan that funds would not be misused and that Islamabad would keep vigilance over the planning, budgeting and monitoring processes with a view to improving social services.

Following are some of the assurances that have been sought by the ADB: The Punjab government will ensure fiscal decentralization.

* It will commit to increase the social sector allocation in line with the PRSP (Poverty Reduction Strategy Paper) and target the social sector expenditures as a percentage of total allocations every year of the programme period at the provincial, district governments and the tehsil municipal administration levels.

* It will commit to create greater fiscal space for the district governments and the tehsil municipal administrations and will ensure that their capability for financial management is enhanced by improving accounting, auditing and reporting mechanisms.