World Bank keen to finance $10 billion water projects

Society Pakistan & World Affairs
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ISLAMABAD (November 23 2003): The World Bank has shown willingness on the government request to accommodate a 10-year water sector plan to finance overall projects worth $ 10 billion, sources told Business Recorder.

However, the World Bank sources have said that the bank is already considering assistance to Pakistan to the tune of $ 1 billion annually including infrastructure projects.

Though, during the last ten years, the assistance to Pakistan has crossed $ 5 billion, but in high case scenario (best performance in implementing reforms), Pakistan could be given $ 1 billion annually for next three years, according to the country assistance strategy.

The World Bank is also reviewing Pakistan’s request for its water and power sector including its 10-25 years plans and assistance for mega projects.

But these projects some times take much longer time to complete as is the case with Ghazi Barotha whose preparation was started in early '80s, but the project was approved in late '80s and commissioned in 2003.

Moreover, in a $ 1 billion annual assistance, the most likely portion of water and power sector could be near $ 300 million (30 percent).

Sources also said that Pafuel Patel, the new head of the South Asia region in the World Bank, would arrive here soon to present the bank’s views on water and power sector.

Pakistan had already asked for a power sector structural adjustment credit.

According to a press release of Ministry of Water and Power, the World Bank “would support Pakistan’s water sector to the tune of $ 10 billion over a period of 10 years”.

This massive support programme is offered due to the potential of this sector to alleviate poverty and gear up economic growth.

It also said that a committee comprising the secretary and additional secretary of Ministry of Water and Power and two representatives of Ministry of Food, Agriculture and Livestock would prepare a concept paper on the proposed projects in water sector.

The bank also agreed to support Wapda’s water wing and Indus River System Authority for greater transparency and developing trust among the provinces.

The visit was a follow-up of a request made by Pakistan for water sector assistance.

The mission visited the Punjab and Sindh during current visit and shall visit NWFP and Balochistan on their next trip to Pakistan.

The Minister of Water and Power Aftab Ahmed Khan Sherpao informed the visiting delegation that the two committees are already formed to see the issue of water in national perspective.

One, Parliamentary Committee, constituted for water sector, has already held one meeting and will be meeting again on December 9-10.

The technical committee has also been notified and shall give technical input to build consensus at a national level, he added.

“We need a treaty with Afghanistan on the pattern of Indus Basin Treaty,” Aftab Sherpao said and solicited bank’s support. He also solicited bank’s support for capacity building and infrastructure development of water sector.

The minister said we also need to think about the water sector projects outside the Indus Basin.

The World Bank termed the 1991 Water Accord as major achievement for building trust among the provinces.

The bank also showed interest in the proposed National Water Council as envisaged in the forthcoming national water policy.

Pakistan faces major challenges in managing its large surface water irrigation system as it has only 45 percent efficiency level.

http://www.brecorder.com/story.php?id=66565&currPageNo=1&query=&search=&term=&supDate=

We definitely need at least 3 large dams in the near future. They will not only solve the water problem but also provide jobs to hundreds of thousands of men and industries.

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This $10 billion water project sounds good on paper.

But question is, is this another $10 billion loan with huge intrest payments to be repayed back.

Because if it is then this will be more of a burden then a help!

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Remember who came to Pakistan's rescue when India stopped the flow of water? It was world bank that came up with the project and provided Pakistan the support to develop one of worlds largest irrigation systems. The present repayment plans are divided over such long periods that they are extremely easy to pay.

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Let me get this straight. We talking about a grant here or a loan? Or tied aid? What exactly do they mean that the World Bank will fund it? And even then will they fund all of it? Or just a portion?

The article is scant on facts, and superficious in detauil to provide a good image of the project. What exactly are these "water projects"? Are they needed? What is the cost and benefit of the projects?

10 billion dollars in debt more. Good grief. First bring down the current debt to managable levels before incurring more debt at higher interest rates.

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It’s a great move, and I Pakistan has been seeking major world bank investment in Vision 2025 program. I think, it’s a clear signal to put the construction of Kalabagh and Bhasha dams in high gears :jhanda:

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guys, pakistan is in dire need to infrastructure improvement in water supply, drainage and power sector..as anyone who has lived there would know. why does this topic keep coming up..because of shorter term fixes rather than long term solutions pursued.

I am very familiar with world bank funded water supply projects. My dad had done the feasibility analysis based on 30 year planning.

the challenge was that in 1980's when the major water projects were startedm, the govt decided that it wanted a shorter term fix, which would decrease the current expense. my dad had argued against it because although the immediate expense will be reduced the overall cost to repeat the same 10 years later and 20 years later would add up to more than twice the amount if the whole thing was done properly the first time.

Just a note, since he was the liaison between WB and the govt and evaluating work bids etc etc, he was put under considerable pressure to award teh contract to some minister's cronies, to a point that there were kidnap threats against myself and my siblings. I think that the current situation is different and the that govt will make teh right decisionsfor longer term solutions.

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This issue of investing in the infrastructure of pakistan is not anything new pakistan needs investment into the infrastructure of IT & Comms, Roads, Sewage, Electric Supplies etc.

The question that still has not been answered by anyone is if this $10 billion is a loan with huge intrest repayments, especially since this is from the World Bank known for exploitation and interference in Government policies.

Because i cannot see how on earth pakistan can afford that with $40 billion external debt already !

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[QUOTE]
*Originally posted by ak47: *
This issue of investing in the infrastructure of pakistan is not anything new pakistan needs investment into the infrastructure of IT & Comms, Roads, Sewage, Electric Supplies etc.

The question that still has not been answered by anyone is if this $10 billion is a loan with huge intrest repayments, especially since this is from the World Bank known for exploitation and interference in Government policies.

Because i cannot see how on earth pakistan can afford that with $40 billion external debt already !
[/QUOTE]

First of all, Pakistan's external debt is not $40 bn. If you claim that it is, then you must provide proof.

Secondly, noone has replied to the question because nobody knows the answer as yet. If there were more details available you'd find them here. How difficult is that to understand?

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Chtonic

If they mentioned details of the project then they should also mention the funding and when where and how it will happen.

You don’t need to get upset if people question the funding because this is natural, pakistan had huge debt problem and nobody wants that to get worse.

You will need acrobat reader for the Pak external debt stats

http://www.sbp.org.pk/ecodata/pakdebt.pdf

http://www.statpak.gov.pk/depts/fbs/publications/pocket_book2003/chapter11.pdf

It currently stands at around $35,474 billion this figure does not include debt servicing charges!

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Good. Now that you’ve found your way to the SBP website, I’ll tell you that the total external debt of Pakistan is not $35,474 billion (which is basically $35 trillion), and neither $35.474bn. That would be the number for total external liabilites which includes figures other than debt. Pakistan’s total external debt is $33.352 bn. read carefully before you post.

Lastly, I was not upset with your question dear. I was upset with your claim that Pakistan’s external debt was $40bn.

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ak47 here is a simpler question.

people need water,. a basic necessity

storm water drainage, general sewerage, and water treatment is necessary from a public health perspective.

now

here is a decision tree

1) we dont spend to fix the infrastructure
2) we spend the money

I am assuming for everyone the answer will be 2, after all its logical

now, the second series of questions

where do we get the money

There are two options here, either we borrow the money from the world bank

or we change how we spend in Pakistan, which would mean spending less on defense, which I am okay with as well.

since situation #2 is not on the horizon, we have to depend on situation #1, i.e. borrow.

as far as exploitative loans by the IMF, do you know what rate they are charging?

I would be more than happy if Pakistan and India settle their differences, resolve teh kashmir issue once and for all and just go on and spend more on citizens than on weaponry. But until that happens do we ignore the needs of the population.

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$35 billion or $40 billion of external debt regardless that is a stupendous amount.

and if you really want to get upset than you better add $26 billion internal debt making a grand total of $61 billion debt total.

Not exactly healthy is it!

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No one is saying that is an ideal or optimal solution, but it is a feasible and effective solution.

our other option is to not provide the basic service of water and sewerage to the population.

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[QUOTE]
*Originally posted by ak47: *
$35 billion or $40 billion of external debt regardless that is a stupendous amount.

and if you really want to get upset than you better add $26 billion internal debt making a grand total of $61 billion debt total.

Not exactly healthy is it!
[/QUOTE]

You're off the mark once again. I'll repeat for one last time. Pakistan's external debt is neither $35bn nor $40 bn. Its $33bn.

I am not upset by whatever debt bumbers you're throwing at me for three reasons:

1) Musharraf's track record in the debt area has been excellent. Never before has any govt. been able to achieve what he has in terms of external and internal debt situation.

2) WB's intereference is relatively little compared to IMF. WB, and ADB charge more interest on their loans but interfere less. IMF charges less on and interferes more.

3) Neither do you present any alternative source of funding, nor do you suggest any other means to resolve the water problem. lets hear some suggestions firom your part before you start criticising because its easier to criticise than present solutions.

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[QUOTE]
*Originally posted by ChthonicPowers: *
lets hear some suggestions firom your part before you start criticising because its easier to criticise than present solutions.
[/QUOTE]

Brother

when we have khilafah, we will noy need loans (thought i would get to this before soemone else does)

:)

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Chtonic

you have a figure of $61 billion debt ok this is external and internal ok lets start at that point forget the semantics of external debt is 33 billion or 34billion or 35 billion external you know and i know its a huge figure.

Adding $10 billion is not feasable in the current situation.

Simple analogy you have problem with malaria you do not import more mosquitos because that will increase your malaria problem.

Same with World Bank or IMF they both offer you more loans to increase your debt, who are the IMF and World bank these are the multinational banks of the West also include japan in that. They seek countries who they can loan money to and get multiple returns in intrest.

As muslims we cannot take riba in the first place and secondly with a figure of $61 billion it is ridiculous to think about taking $10 billion more. First problem first is clear the debt!

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Lack of fresh water in Pakistan is still the leading cause of death, so measures must be made to curtail it effectively. If this is completed, it will add to the achievements of this regime.