ISLAMABAD, July 7: The government is reported to have decided to wind up the Rs25 billion Khushal Pakistan Fund and abandon more than 10,000 community-based poverty reduction and employment generation schemes launched by the previous government.
The KPF was established as a limited company on Sept 19, 2005 under public-private partnership to finance schemes like providing clean drinking water and sanitation, building district link roads and infrastructure and improving health and education facilities.
A finance ministry official told Dawn on Monday that the first meeting to discuss the fund’s future was held on July 3 and to review the legal, administrative and financial ramifications of its closure.
“We have asked the KPF to provide details of schemes before the next meeting,” he said.
The KPF has already spent Rs4 billion on various projects in three provinces and about 7,500 small infrastructure schemes are nearing completion in Balochistan.
The schemes in Balochistan, meant to benefit about a million people, were launched in March 2006 and every district was provided Rs100 million, the official said.
In September 2007, the KPF initiated 2,500 schemes through the Rural Support Programmes in the NWFP and Sindh and the fund was to release the remaining Rs2 billion.
The official said that more than 1,000 schemes had been launched in Sindh after the election, mostly in PPP legislators’ constituencies.
The KPF was ready to launch 6,000 schemes in Punjab for which it had called for allocating Rs15 billion.
The public exchequer might lose Rs342.286 million if the ongoing schemes were not completed through rural support organisations, the official said. Partner organisations might sue the KPF for breach of contracts, he added.
Under the terms of reference, 30 per cent of the operational cost will have to be reimbursed to partner organisations, even if the schemes are not initiated. It might result in a loss of Rs51.5 million because the leftover balance of the committed KPF share was Rs1,715.446 million, the official said.
During a meeting of the Annual Plan Coordination Committee, Rs5 billion was earmarked. But the recommended allocation was deleted on May 31 in the working paper prepared for the National Economic Council meeting held on June 2 by merging the same in People’s Works Programme (formerly called the Khushhal Pakistan Programme).
According to sources, the finance division also froze all KPF accounts last month, which resulted in the shutting down of its logistics and communication facilities because of non-payment of liabilities.