WB may cancel $38m water loan

ISLAMABAD: The World Bank has warned of cancelling its soft loan of $38 million to support the management and development of water resources in the Indus River, after finding little progress on the project since its approval in 2008.

The credit from Interna­tional Development Associa­­tion (IDA) for the water sector capacity building and advisory services project was aimed at improving the management of water resources and strengthen those federal institutions involved in water resource planning, management and development. The loan has a maturity period of 35 years with a 10-year grace period.

The mid-term review of the project has been planned to be undertaken in June this year, and if this review does not find significant improvement in implementation process and disbursement of project funds, partial or even full cancellation of the credit will need to be considered, to enable these funds to be more usefully deployed within Pakis­tan, a report of the bank said.

The project steering committee met early last month after a long hiatus, and the key decisions taken inclu­ded the approval of the inclusion of key new activities in the project plan, including the establishment of ‘policy implementation cells’ within the relevant ministry to implement the National Water Policy and National Flood Protection.

Procurement for improvement in water resource management and development has progressed reasonably with two key Wapda-led acti­vities advancing to signed contracts. These are a major flow forecasting study and supply and installation of new automatic weather stations and other hydromet stations.

The PC-II of the project was being revised to address new high priority areas and will be submitted to the Planning Commission.