International Development Association (IDA) will provide $130 million "Additional Financing for Pakistan Earthquake Emergency Programme" to reduce the immediate suffering resulting from the effects of the earthquake and restore livelihoods destroyed by the earthquake.
In update project report, Raja Rehan Arshad, Sr Technical Specialist of World Bank mentioned that this financing would restore basic services to the affected population and rebuild public infrastructure, and to start the recovery and reconstruction process.
He said that the additional proposed amount of $130 million will fund part of the present financing gap in GOP's Rural Housing Reconstruction Programme. This additional financing will fund the reconstruction of an additional approximately 40,000 destroyed houses and the repair/retrofitting of an additional approximately 10,600 partially destroyed/damaged houses.
Raja Rehan Arshad explained that the original project objectives have remained unchanged under this additional financing for scaling up of the ERP. The proposed additional financing will further help enhance the achievement of the original objectives.
The relevant outcome related to the additional financing is that as a result of owner-driven, seismic-resistant reconstruction, homeowners will be sensitised, willing, and enabled to reconstruct their homes to seismic-resistant construction standards. The benefits of this shift towards seismic resistant construction techniques and technologies are expected to go beyond the project period to create a culture of seismic-resistant construction, he added.
Raja Rehan Arshad mentioned that outputs and outcomes related to the original ERP and this additional financing project will be monitored through a result framework prepared as part of the additional financing appraisal.
Data for the listed indicators/outcomes will be provided by the comprehensive Reporting, Monitoring and Evaluation (RME) System established by ERRA - which provides for both integrated and UC-level disaggregated monitoring of major programme output.
The original $400 million ERP supports the Government of Pakistan (GoP) in its post-earthquake recovery programme in: (a) grants to beneficiaries for the reconstruction and rehabilitation of their destroyed/damaged houses; (b) livelihoods support cash grants; (c) import financing, and; (d) related technical assistance and institutional capacity building, he added.
Raja Rehan Arshad said that the project has proven to be extremely quick disbursing, with almost 90 percent of the credit disbursed within eighteen months of project effectiveness. GoP requested additional IDA funds to meet the estimated financing gaps in its post-disaster Rural Housing Reconstruction Program (RHRP), which is in part being financed under the original ERP.
Currently, the ERP is funding about 15% of the RHRP in the nine earthquake affected districts of the North West Frontier Province (NWFP) and the State of Azad Jammu & Kashmir (AJK).
Impressive Reconstruction Progress under the Housing Program - The RHRP has shown impressive reconstruction start-up rates. According to the latest Earthquake Reconstruction and Rehabilitation Authority (ERRA) surveys, close to 250,000 houses have begun to be reconstructed, which is about 70 percent of the approximately 350,000 rural houses found eligible for the Reconstruction Grant.
Out of these, approximately 168,000 houses have passed plinth level inspections and 32,000 have passed lintel level inspections by ERRA. Within the former group, third tranche payments have been disbursed to 131,150 compliant beneficiaries.
Of the latter, fourth and final grant tranches have been paid to around 12,000 beneficiaries who have substantially completed their houses (most with under-construction roofs), in compliance with seismic-resistant standards. He said that these achievements are very impressive considering that 2007 represents the first full reconstruction season.
Reducing Fiscal Strain on PSDP - to support this rapid pace of reconstruction, disbursements of grant amounts to the tune of around US $975 million have been made through the RHRP in the one and half year period between November 2005 to May 2007, out of which a significant sum has come from the GOP.
This has significantly shifted away funds meant for developmental spending and poverty reduction through the Public Sector Development Program (PSDP) towards the RHRP, which constitutes one third of GOP's overall earthquake reconstruction program.
The government stands firmly committed to bridging any financing gaps through its own resources, but would prefer additional financing through IDA funds to protect the PRSP reformprogram, he added.
He said that the CAS fully supports major Bank financing for both early recovery projects, and longer term hazard management strategies. It in fact forecasts that 'given the magnitude of resources needed for the rehabilitation of earthquake affected areas, it is unlikely that the government would be able to fully absorb the fiscal impact of the earthquake without significantly affecting public sector development activities'.
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