The government announced on Monday that it would not seek foreign aid to rebuild areas destroyed by continuous devastating floods as Prime Minister Shehbaz Sharif constituted a committee to assess the damage to crops, shelter and livelihood. Planning Minister Ahsan Iqbal, who announced the government’s decision not to take out foreign loans for reconstruction activities, also said that Pakistan could not take a new loan from China to the mainline-in project because of its inability to repay old loans that are rolled over each year.
"Pakistan will take on the rehabilitation and reconstruction of the damaged areas by using its own financial resources and without taking any external help," Iqbal said while addressing a press conference. The Minister also spoke at the launch ceremony for the monthly development report, prepared by the Chief Economist Office of Planning Commission. The report stated that so far almost 9,200 homes have been damaged, 671 kilometers long roads flushed away and 239 bridges fell. Iqbal said the prime minister on Monday constituted a committee that would assess the damage to crops, homes and infrastructure, and after the rehabilitation and reconstruction needs would be assessed. Ahsan Iqbal is chairman of the committee. He said the real cost of damage can only be known when the water goes back in the next few weeks. His statement came days after Finance Minister Muhammad Aurangzeb said Pakistan failed to prepare invested projects to exploit $ 11 billion, pledged by foreign lenders during the Geneva Conference almost three years ago. "Let’s accept that we couldn’t come up with investable projects to take advantage of the billions of dollars that are pledged in Geneva," Aurangzeb had said. However, Iqbal denied that Pakistan remained unable to fully utilize the Geneva Conference. "There is not even a dollar that remains no obligation as it is the project’s gestation period that takes longer"said the planning minister. Iqbal said the Executive Committee for National Economic Council (ECNEC) has already approved $ 3.7 billion value projects against the $ 6.4 billion project -related obligations. But the Ministry of Economic Affairs informed the Public Accounts Committee (PAC) that out of $ 6.4 billion in project financing information, only $ 2.8 billion was actually paid out. Overall, foreign lenders had promised $ 11 billion – including $ 4.6 billion for oil financing and $ 6.4 billion for rehabilitation and reconstruction – but payouts remained limited due to the absence of credible projects. To a question about the need to have Kalabagh dam, the planning minister said no dam could be built without first achieving national consensus. China Development The Minister said Pakistan and China have agreed to hold the 14th meeting of the Joint Cooperation Committee for CPEC on September 26. He added that it was expected that both parties during the meeting or thereafter sign the financing agreement for the construction of Karakoram-Highway Phase-II. China will provide a loan to KKH-II, equivalent to 85% of project costs, he added. He confirmed that Chinese funding under the CPEC frameworks was not available for the ML-in project. "It is also agreed between Pakistan and China that multilateral funding would be examined for the construction of the ML-in 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) Railway project in Consortium with other multilateral lenders not to secure funding from China.
"It was inappropriate for Pakistan to take more loans to the ML-in project, especially after Exim Bank of China already rolls over old loans each year," said the planning minister while justifying Chinese decision not to give any loan to the only strategically important declared project from CPEC. The country waited almost a decade on China’s 85% financing obligation for the project. The government has now returned to ADB, which was eager to finance in 2016, but retired due to Peking’s insistence on only funding. The Manila-based ADB together with the Asian Infrastructure Investment Bank (AIIB) has shown the will to provide approx. 60% financing for the Karachi-Rohri section, Express Pakinomist had reported earlier. However, Iqbal said China would expand its support to get loans from ADB and AIIB to the ML-in project. He accused the PTI government of delaying the ML-in project and also paid tribute to the SUKKUR-HYDEABAD motorway project. He said the ADB team conducted the study for the construction of the Karachi-Rohri section in ML-I. The government has estimated the section’s costs of $ 2 billion and Rohri-Multan section to $ 1.6 billion, bringing only these two to $ 3.6 billion. However, it is expected that the total costs due to internationally competitive bids will still be less than the expected costs under the bilateral framework. The minister said China has also agreed to consider investing in the mining sector. Both sides also agreed to set up two special economic zones to relocate the Chinese industries, the minister said shortly after returning from Beijing.
