Salaries of staff of Pak hospitals: ECC approves revised mechanism to transfer Rs1bn to Kabul govt

ISLAMABAD: The Economic Coordination Committee (ECC) of the cabinet has approved a revised mechanism to transfer Rs1.009 billion to government of Afghanistan in four tranches for salaries of doctors and staff of three Pakistani hospitals.

The decision to this effect was taken by the ECC meeting presided over by Finance Minister Ishaq Dar dated 3rd January 2022 on a proposal moved by the Ministry of National Health Services and Regulations.

The meeting was informed that government of Pakistan had announced Rs5 billion assistance for Afghanistan (in kind) in October 2021. Subsequently, the Afghanistan Inter-Ministerial Coordination Cell (AICC) in its meeting held in May 2022 proposed the transfer of an amount of Rs1.009 billion in cash as the running cost of three hospitals in Afghanistan through the Ministry of Foreign Affairs, Pakistan embassy in Kabul.

However, the Ministry of Foreign Affairs proposed transfer of funds through banking channels only. The federal cabinet in its meeting held on July 21, 2022 approved the proposal of Foreign Affairs Ministry regarding mechanism/ modalities for transfer of funds to Afghanistan. However, mechanism for transfer of funds could not materialise due to delays involved in transfer of funds through banking channels.

The AICC Apex Committee in its 5th meeting held under the chairmanship of the prime minister on 22nd August 2022 revised mechanism/ modalities for transfer of fund to Afghanistan, as proposed by AICC which included; (i) the total amount already approved by the cabinet for salaries of Rs1.009 billion, should be transferred to Afghanistan in four trenches. The funds were repurposed from the assistance package approved by the government; (ii) the first tranche to be transferred by the Ministry of Finance to the Ministry to National Health Services’ account.

Those funds would be transferred through Foreign Affairs Ministry after conversion in US dollars and sent to Pakistan embassy Kabul. Foreign Affairs Ministry would follow the same procedure which it was currently using for remittances to the embassy in Kabul; (iii) if required the Ministry of NHSR&C would open a separate account with NBP for handling these funds; (iv) Pakistan embassy in Kabul would open an account in Afghanistan International Bank (AID) to deposit the cash remittances.

Salaries to doctors and staff of the hospitals would be disbursed from this account; (v) the Ministry of Finance would authorise the opening of embassy account in AIB Kabul on receipt of a request from Ministry of Foreign Affairs; (v) the remaining three tranches would be transferred through banking channels to the embassy account in AIB opened for the purpose of disbursement of salaries; (vii) the Ministry of NHSR&C would request Citi Bank to seek prior approval from the US regulator in New York for transfer of funds to AIB. Once the approval is received, the Ministry of NHSR&C would request NBP to initiate the remittance. The procedure would be adopted only for 2nd, 3rd and 4th tranches;(viii) if the banking channels failed to provide services for transfer of funds, the entire amount (the remaining tranches) would also be transferred following the procedure mentioned in sub para (ii) above for the first tranche.

The AICC Apex Committee approved the proposal of remitting one-fourth of the amount of cash under guidance of Finance Division and State Bank of Pakistan (SBP) as recommended by the AICC.

The Ministry of NHSR&C sought approval of the ECC for the revised mechanism, modalities for transfer of funds to Afghanistan.