The Asian Development Bank (ADB) has cut $350 million loan for the Karachi Mega City Project (KMCP), owing to official indifferences. Well-placed sources told Business Recorder on Thursday that ADB, in collaboration with Government of Sindh (GoS) and the City District Government Karachi (CDGK), had chalked out a multi-sector program some four years back for Karachi, comprising physical investments and management in water, sewerage, urban transport and low income housing sectors.
The estimated cost of the project was $1.1billion and ADB had earlier agreed to grant $800 million, but owing to lack of official concern, ADB has decided to annul all agreements in this connection. They said that the ADB delegation expressed grave concern over the issue during several meetings with the GoS, CDGK and other relevant agencies and stopped all processing due to delay in PC-1 approval, which puts the KMCP at risk.
To overcome the situation, GoS has decided to go for urban transport sector only and has dropped water, sewerage and low housing projects aimed at regaining ADB loan, they said.
The team, comprising Nazar Hussain, Additional Chief Secretary, Planning and Development Department, Ghulam Ali Pasha, Additional Chief Secretary, Finance Department, Malik Islam, Project Director, KMCP and other officials have also been to ADB head office to convince them not to stop loans for the project.
These officials visited to Manila with their families, which made the tour rather a "honeymoon journey" than an official visit, sources revealed. They said that ADB officials had finally convinced the concerned agencies and agreed to sanction only $450 million loan for the project. To a question, they said that the loan has been cut owing to reallocations for other eligible projects because of late processing by the concerned departments and added that if the government would not commence the work on project, soon, the sanctioned amount could also be assigned to any other projects, whether in Pakistan or elsewhere.
They said that ADB officials gave assurance of their support in the development of the city, saying that, "ADB has committed to support Karachi programmes, but the government needs to consider the practical options and present their case to ADB in a practical way only then it would be reconsidered".
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