The Asian Development Bank (ADB) has proposed to establish Karachi Infrastructure Development Fund (KIDF) for the development of the city on fast track, it was learnt reliably on Thursday. Well-placed sources disclosed to Business Recorder that the idea was floated in a meeting between officials of the bank and higher-ups of the City District Government Karachi (CDGK) a day back. "The fund may be established with sharing of all stakeholders in collaboration of other donor agencies to ward off the lengthy and cumbersome procedure for getting the loan from any of donor agency, sources quoting the representative of the ADB said.
The procedure, sources maintained, for approval of loan for a particular project or components of the CDGK or provincial government from the ADB is lengthy and cumbersome, which often delays the projects.
Similarly at the execution level, the projects are delayed due to inadequate handling and lack of required expertise by the executing agencies or slow flow of funds, sources added.
"To overcome this bottleneck, it has been proposed that KIDF may be established with sharing of all stakeholders and involvement of other donor agencies to undertake the development works in the metropolis at fast pace, sources said.
It was informed that the meeting between officials of ADB and high authorities of CDGK was basically convened to discuss the proposed technical assistance (TA) loan facility of ADB for mega development of the city.
Mr Hun Kim, who headed the ADB mission briefing about the concept of TA facility, told that a loan amounting to 400 million dollars is scheduled to commence in 2006.
Giving the timeframe of different component facility, Kim explained that TA loan of 10 million dollars is scheduled to be released in the year 2005-06 to evaluate the technical and financial capabilities and requirements of the CDGK, while there is a small component $150,000 as technical grant to evaluate the requirements of the city government.
But City Nazim Naimatullah Khan is reportedly expressed his disagreement with the offer of 10 million dollars as TA loan and asked the mission give it as grant instead of loan.
However, the head of the ADB mission, sources revealed, pointed out that the city government do not have the required capacity to manage huge amounts under this loan.
Therefore, he proposed to form a joint venture company with sharing of all stakeholders federal, provincial and city governments and the private investors.
"The main objective of this company, may be named "Intermediary Finance Company" to get various financing options under public private partnership and to support sustainable projects for the development of infrastructure and other mega projects for the city, which could not be initiated by the city government due to scarcity of resources", Mr Hun Kim reported to be said this during the meeting.
To further strengthen this company, World Bank, JICA and JBIC could also be asked to joint hands for financing in it, sources said adding that the ADB has expressed its commitment to provide support to this intermediary company.
The proposed KIDF will assess the proposed projects of the city government from technical and financial point of view to uplift infrastructure, afterward it would be decided to fund the suitable projects.
Sources said that ADB has appointed the consultants for this loan facility and they would be visiting the city in June 2005 for preparing the reports and evaluation of the projects identified by the city government.
After thorough deliberations on loan facility, the meeting outlined different projects for this loan facility. Some of the priority projects, in which ADB is more willing to finance, include mass transit project, elevated roads, master plan, urban transport, capacity building of financing management of the city government officials and to conduct a feasibility study for built, operate, own (BOO) and built, operate and transfer (BOT) projects.
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