Pakistan has received just $2.8 billion under the Kerry-Lugar Bill from the United States during the past three years: About 76 percent of these funds went to off-budget (NGOs) while 24 percent on-budget amount was used through government agencies, National Assembly's Public Accounts Committee was informed on Thursday.
The Ministry Economic Affairs Division (EAD) informed the committee that the US was yet to provide $1.5 billion a year under the Kerry-Lugar Bill but the US extended only $2.8 billion in the past three years, instead of actual $4.5 billion. The PAC was of the view that corruption was rampant in utilisation of foreign loans by ministries, other departments or NGOs. NGOs usually take such loan in the name of capacity-building, skill-development and other purposes.
The Committee was astonished to know that all foreign loans were forwarded to ministries/autonomous bodies/ provincial governments through EAD but there was no check on its utilisation after disbursement. It directed the Ministry of Economic Affairs Division to establish a mechanism for proper monitoring projects funded by foreign loans, besides ensuring a proper mechanism for repayment of these loans taken by various ministries/departments. The committee expressed displeasure on knowing that all departments/ministries defaulted on repayment of foreign loan. The government was paying interest on the loans, commitment charges and variation in foreign exchange rates from Federal Consolidated Funds.
The committee was informed that National Highway Authority (NHA) always failed to repay its loan. Majority of NHA projects were delayed because of land acquisition issues and the government had to pay all charges to donors. Additional Secretary EAD Rao Iftikhar said that EAD had repeatedly told to all departments/ministries to provide details of utilisation of foreign loans, but no one bothered to provide such details.
He also clarified to the PAC that EAD was playing the role of a Post Office, which received/signed loans with donors and disburses them to departments concerned. After the disbursement, it is responsibility of the secretary of the department concerned to monitor proper utilisation of the loan. The PAC directed the EAD Principal Accounting Officer (PAO) to submit a comprehensive report within a month about all departments that failed to repay loans.
Member PAC Khurram Dastgir Khan told the PAC that autonomous bodies such as NHA were a burden on the national exchequer's Federal Consolidated Funds. He claimed that NHA took foreign loans, it also availed subsidy from the federal government in the budget, but it always claimed that it (NHA) did not have any funds for repayment of foreign loans. He questioned NHA's future viability because it was difficult for the government to always repay its liabilities.