KARACHI: Funds worth billions of rupees allocated in the 2008-09 budget for several mega projects have been held up following signing of loan agreement with IMF which has bound the government to curtail their expenditure both administrative and development drastically.

One of the main features of the IMF conditionalities is a clear and loud message to the federal and provincial governments, to operate within their own means and stop borrowings from the State Bank.

”Now don’t hope for funds from the centre”, advised a senior official in Islamabad while talking to a Sindh government secretary.

Sources in the Sindh government told Dawn that so far there has been no word from the finance department to curtail expenses on mega projects. “But we are anticipating such instructions any time,” one ministry official said.

A series of meetings with senior officials of different ministries revealed that funds for mega projects in agriculture, health and education will not be cut but projects in other sectors such as roads, water and development of infrastructure would be severely trimmed.

An informed official said that for political reasons the PPP government would not formally announce curtailing of funds for mega projects. In the first instance approval of such projects would be delayed, which would ultimately delay completion of these projects for which some funds have already been released.

A senior official of Sindh Agriculture department said that the government had already released its share of funds for two mega projects being executed with the financial support of the federal government. These projects, whose cost is in billions, include improvement of water courses in the province and enhancement of farm productivity. Funds have also been released for several smaller schemes.

Sources at the mines and minerals department said that technical details of mega projects in the mining sector are being processed by the consultants. They ,however, expressed doubt over release of billions of rupees for these projects, which include development of Thar coal mines for the purpose of producing electricity so badly needed by the country.

Meanwhile, foundation of several major projects for which funds were allocated in the annual development programme for 2008-09 could not be launched despite the lapse of six months of the current fiscal year. This would provide an excuse to the government to withhold funds to fulfil the conditions laid down by the IMF.

The release of funds for a mega project for laying water line from Kenjhar Lake to Nooriabad industries is also in doldrums. Though the Sindh industry minister has set several dates for the beginning of work on the project but according to insiders the government has refused to provide the funds asking the ministry to contribute at least 50 per cent to the cost of project from its own resources mainly from its income from sale of lands in industrial estates.

The release of funds reserved for development of the new industrial estates in various cities of the province is also in doubt. Also providing funds for new industrial estates in the province is on the lowest priority list of the government as the existing estates have not contributed to the industrial growth in the province, which presently boasts of a few capital industries like sugar, fertiliser, and cement that too situated in the outskirts of the mega city Karachi.

The Sindh government has already frozen funds of Rs250 million granted to four management development companies each in four major industrial zones namely Korangi, Landhi, Federal B Area and North Karachi for development of infrastructure.

Sources at the Planning and Development Department said that the government had approved few mega road projects for construction of flyovers at Jail Roundabout, Samama Shopping Centre on University Road and near Faisal Air base on Sharea Faisal but funds are awaited to start them.

They said that the Karachi Circular Railway (KCR) project is still far from approval as the Centre has raised several objections on the project. The Karachi Mass Transit project planned by the City District government is still under consideration and a number of technical and financial aspects are to be settled before it reaches the foundation laying stage.