The government on Monday announced that it would not seek foreign aid to rebuild areas destroyed by ongoing devastating floods, as Prime Minister Shehbaz Sharif constituted a committee to assess the damages to crops, shelter and livelihoods.
Planning Minister Ahsan Iqbal who announced the government's decision not to take foreign loans for reconstruction activities, also said that Pakistan could not take a new loan from China for the Mainline-I project due to its inability to pay back old loans that are rolled over every year.
"Pakistan will undertake rehabilitation and reconstruction of the damaged areas by using its own financial resources and without taking any external assistance," Iqbal said, while addressing a press conference.
The minister also spoke at the launching ceremony of the monthly development report, prepared by the chief economist office of the Planning Commission. The report stated that so far nearly 9,200 homes have been damaged, 671 kilometres long roads washed away and 239 bridges fallen.
Iqbal said that the prime minister on Monday constituted a committee that would assess the damages to the crops, homes and infrastructure and after that the rehabilitation and reconstruction needs would be assessed.
Ahsan Iqbal will chair the committee. He said that the real cost of damages can only be known once the water recedes in the next couple of weeks.
His statement came days after Finance Minister Muhammad Aurangzeb said that Pakistan failed to prepare investable projects to utilise $11 billion, pledged by foreign lenders during the Geneva conference nearly three years ago. "Let's accept that we could not come up with investable projects to benefit from the billions of dollars pledged in Geneva," Aurangzeb had said.
However, Iqbal denied that Pakistan remained unable to fully utilise the Geneva conference pledges. "There is not even one dollar that remains uncommitted, as it is the project gestation period that takes longer time", said the planning minister.
Iqbal said that the Executive Committee of the National Economic Council (Ecnec) has already approved $3.7 billion worth projects as against the $6.4 billion project related commitments.
But the Economic Affairs Ministry informed the Public Accounts Committee (PAC) that out of $6.4 billion in project financing pledges, only $2.8 billion was actually disbursed.
Overall, foreign lenders had pledged $11 billion – including $4.6 billion for oil financing and $6.4 billion for rehabilitation and reconstruction – but disbursements remained limited due to the absence of credible projects.
To a question about the need of having Kalabagh dam, the planning minister said that no dam could be built without first achieving national consensus.
China development
The minister said that Pakistan and China have agreed to hold the 14th meeting of the Joint Cooperation Committee of the CPEC on September 26th. He added that it was expected that during the meeting or after that both sides would sign financing agreement for the construction of Karakoram-Highway phase-II. China will give a loan for the KKH-II equal to 85% of the project cost, he added.
He confirmed that Chinese financing under the CPEC framework was not available for the ML-I project. "It has also been agreed between Pakistan and China that multilateral financing would be explored for the construction of the ML-I project," said the minister.
His statement came days after Islamabad requested the Asian Development Bank (ADB) to fully finance the nearly $7 billion Mainline-I (ML-I) railways project in consortium with other multilateral lenders after failing to secure funding from China.
"It was inappropriate for Pakistan to take more loans for the ML-I project, particularly after the Exim Bank of China is already rolling over old loans every year," said the planning minister, while justifying the Chinese's decision not to give any loan for the only strategically important declared project of the CPEC.
The country waited almost a decade for China's 85% financing commitment for the project. The government has now returned to the ADB, which was keen to fund in 2016 but withdrew due to Beijing's insistence on sole financing.
The Manila-based ADB, along with the Asian Infrastructure Investment Bank (AIIB), has shown willingness to provide about 60% funding for the Karachi-Rohri section, The Express Tribune had reported earlier.
However, Iqbal said that China would extend its support to get loans from the ADB and the AIIB for the ML-I project. He blamed the PTI government for delaying the ML-I project and also shelving the Sukkur-Hyderabad motorway project.
He said that the ADB team was conducting the survey for the construction of the Karachi-Rohri section of the ML-I. The government has estimated the section's cost at $2 billion and the Rohri-Multan section at $1.6 billion, bringing just these two to $3.6 billion.
However, it is expected that due to international competitive bidding, the total cost will still be less than the projected cost under the bilateral framework.
The minister said that China has also agreed to consider making investment in the mining sector. Both sides also agreed to set up two special economic zones for relocation of the Chinese industries, said the Minister soon after returning from Beijing.
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