ISLAMABAD: The government has requested the World Bank for restructuring of “Competitive and Livable City of Karachi” project worth $230 million, after facing slow start due to the impact of the COVID-19 pandemic, monsoon rains and flooding, as well as the amendment to the local government law.
Official documents revealed that the World Bank loan of $230 million for the Competitive and Livable City of Karachi (CLICK) Project was approved on June 27, 2019, and became effective on November 26, 2019. The closing date of the loan is June 30, 2024.
The Project Development Objective (PDO) is to improve urban management, service delivery and business environment in Karachi and provide immediate and effective response to an Eligible Crisis or Emergency.
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The project comprises five components: Component 1 - Performance-based Grants to Local Councils and Capacity Building; Component 2 - Modernizing Urban Property Tax Administration and Systems; Component 3 – Improvement of City Competitiveness and Business Environment; Component 4 -Technical Assistance for Solid Waste Management; and Component 5 – Contingent Emergency Response Component (CERC). The Project has so far been restructured three times: (i) on May 18, 2022, when implementation responsibility for Component 2 – Modernizing Urban Property Tax Administration and Systems was transferred from the Excise, Taxation and Narcotics Department (E&TD) to the Local Government Department (LGD); (ii) on September 20, 2022, when Component 5- CERC was added; and (iii) on January 26, 2023, when the CERC was activated and funds were reallocated to the CERC.
As of April 8, 2024, disbursement from the loan was $77.25 million (34 percent of the loan).
The Project had a slow start due to the impact of the COVID-19 pandemic since March 2020, the monsoon rains and flooding in 2020, as well as the amendment to the Local Government Law on November 26, 2021, which increased the number of urban local councils (LCs) from eight to 26.
The Project must now coordinate with 26 LCs, i.e., the 25 newly notified Town Municipal Corporations (TMCs) and the Karachi Metropolitan Corporation (KMC).
As of June 19, 2023, the twenty-five TMCs have replaced the District Municipal Councils (DMCs) and elected TMC Chairmen/Vice Chairmen are currently in place. Provincial and District Transition Teams supported the transition from DMCs to TMCs between June and September 2023.
However, involvement of TMCs in the project has been paused until completion of the proposed restructuring.
Progress toward achieving the PDO is currently rated Moderately Satisfactory, and overall implementation progress is currently rated Moderately Unsatisfactory.
These ratings are explained by implementation progress (especially Component 1) being stalled due to the change from DMCs to TMCs. The provincial government remains committed to achieving the PDO.
Government of Pakistan requested on April 2, 2024, to (i) extend loan closing date, (ii) include 25 TMCs in the project and (iii) allow CLICK PMU to procure on behalf of TMCs. The project was designed to build the capacity of eight Local Councils (seven DMCs and the KMC) and disburse Performance-based Grants to them.
The amendment to the Local Government Law and the notification of twenty-five TMCs to replace the seven DMCs has resulted in the project having to liaise with twenty-five TMCs and the KMC. Moreover, the capacities of the TMCs are weaker than those of the now defunct DMCs and many of the earlier agreed PMs would not be achievable.
Further, the uncertainty around the transition from DMCs to TMCs during November 2021 to June 2023 delayed implementation of planned project activities.
Centralizing the implementation arrangements for Component 1 - Performance-based Grants to Local Councils and Capacity Building and allowing the PMU to implement the Performance-based Grants on behalf of the TMCs will significantly streamline implementation and improve disbursement performance.
The loan closing date will also need to be extended by 23 months to allow sufficient time to complete project activities and achieve the PDO.
In addition, the targets in the results framework need to be updated to reflect the revised number of LCs and the change in the loan closing date.
Copyright Business Recorder, 2024
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