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World Bank aided provincial projects — a review

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Special Correspondent, Islamabad
Jan 17 - 23, 2000

Although the overall quality of the portfolio continues to be generally satisfactory, a review of provincial portfolios indicate varied performance of projects in the four provinces. While Punjab is performing better than the rest of the provinces, and implementations improving in Sindh and NWFP, performance of projects in Balochistan has deteriorated significantly during the last one year. The Balochistan portfolio as a whole is suffering due to overall political, governance, and economic environment in the province and special efforts are needed to bring about a major turn-around in the portfolio. Below is a summary of World Bank aided projects being undertaken by the provinces.


The Balochistan portfolio consists of eight projects for which the bank has provided worth US $221 million (including three national projects Social Action Progarm 2, Population Welfare, and National Drainage Project). Of the total net commitments, US $124 million has been disbursed, while US $96 million remains undisbursed. Three projects in the portfolio are currently rated as 'actual problem' projects (Balochistan Primary Education, Rural Water Supply and Sanitation Project, and Social Action Programe Project 2-Balochistan component), one has been a problem project in the past (Balochistan Natural Resource Management Project), while the rest are slow moving and also faced with governance related problems such as misuse of vehicles, financial mismanagement, etc. During FY 99, about US $20 million was cancelled from three projects to bring the projects in line with the implementation capacity and the remaining time left in closing. The Bank suspended project disbursements of the Balochistan Primary Education Project on August 3, 1999 due to serious implementation and governance related problems relating to civil works, vehicle misuse, recruitment of key technical staff, and non-compliance with merit based criteria for school sitting and teacher recruitment. The bank, during the portfolio reviews, have strongly urged Government of Balochistan to take necessary project specific actions in order to improve implementation performance of the projects, However, limited actions have been taken so far, and most of the projects continue to perform poorly and are unlikely to meet their development objectives. The Bank team, led by the Country Director, also held a meeting with the Chief Minister and his team in May 1999 to seek his support for improvement in the overall implementation climate in the province, while at the same time alerting him of the negative consequences of continued poor performance of the portfolio. The bank is awaiting an Action Plan by the Government of Balochistan, highlighting key steps being taken to resolve generic and project specific implementation issues in Balochistan. Being the poorest province in Pakistan, Balochistan has an immense need for Bank assistance, particularly in the social sectors, agriculture, and infrastructure. However, unless things improve drastically and there is a major turn-around in the overall implementation climate in the province, the Bank will have no option but to limit its assistance and rethink its strategy for future assistance to the province.


The Sindh portfolio consist of five projects for which the Bank has provided $225 million (including three national projects: SAPP 2, Population Welfare, and NDP). Of the total net commitment, $68 million has been disbursed to date while $156 million remains undisbursed. Three projects worth $367 million closed in June, 1999 (Karachi Water and Sanitation, Sindh Primary Education Project, and Sindh Special Development Project). The portfolio, which was performing poorly a year ago by Government of Sindh demonstrate its commitment to overcome key implementation issues with a view to achieve the intended benefits. The Sindh Primary Education Project (problem project in the past) improved during FY99, especially in the quality components. The Sindh Special Development Project, faced with weak project design, was restructured in December, 1998 and original project objectives were revised with emphasis on high priority activities. The Karachi Water Supply and Sanitation Project made a significant impact by increasing water supply 30 per cent to the population of Karachi, along with major institutional improvements. However, the net effects was offset by a drying up of another major source of supply, i.e Hub river, an unforeseen 'natural disaster', due to which the organisation has delayed implementation of agreed financial covenant ( a critical step toward sustainability of the organization). Performance of the on-going Rural Water Supply and Sanitation project have also improved during the last one year: however electrification remain slow. While there has been some progress in SAPP, continued high level management attention is required. In addition, a number of critical improvements are needed to sustain overall progress (which is still fragile) and to enable the programs to have their full impact. In particular, implementation of the national Drainage Program, which is lagging behind other provinces, SAPP-2, and the Family Health project needs close monitoring and high level oversight to avoid slipping into problem status.


The Punjab portfolio consists of eight projects for which the Bank has provided US $418 million (including three national projects SAPP2, Population Welfare, and NDP). Of the total net commitment, US $151 million has been disbursed to date while US $261 million remains undisbursed. The Government of Punjab has taken bold and decisive actions during FY 99 to improve implementation of projects in the province, particularly two projects which were faced with serious implementation difficulties in the past (Punjab Middle Schooling Project and Punjab Forest Sector Development). Government of Punjab is also moving ahead of other provinces in the implementation of strategic areas of SAPP and NDP, and further efforts are being made towards improving performance of other projects in the portfolio. In addition, Government of Punjab has taken concrete steps to resolve key generic issues which have impaired project implementation in the past, such as financial management, project management etc.


The NWFP portfolio consists of six projects for which the Bank has provided US $233 million (including three national projects, SAPP 2, Population Welfare, and NDP). Of the total net commitment, US $79 million has been disbursed to date, while US $146 million remains undisbursed. While the portfolio in NWFP suffered from severe implementation problems in the past, performance has improved in the last several months. In particular, there has been discernable improvement in the implementation performance of the NWFP Primary Education project, which was a chronic problem project a year ago. The Government of NWFP has also taken several steps to remedy implementation issues pertaining to the Family Health I Project, including strengthening financial management. Although, implementation of the NWFP Community Infrastructure project has also improved, significant cancellations could take place unless Government of NWFP puts in place a credible plan to expedite inclusion of new sites and implementation of projects at these sites. While there has been progress in number of areas of the SAPP, it requires continued management attention to ensure focus on priority areas of the program. Implementation of the National Drainage program has also been slow in the province.