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ISLAMABAD: The Asian Infrastructure Investment Bank (AIIB) has reportedly expressed concerns on undue delay in projects worth billions of dollars, urging concerned authorities to expedite their completion.

The AIIB projects review meeting was co-chaired by Vice President AIIB and Additional Secretary-II Economic Affairs Division (EAD).

On Tarbela 5th Extension Hydropower Project (T5HP), the meeting was informed the project authorities that the civil works commenced in 2021 after award of the contract. The last regulatory issue was resolved on October 1, 20222 after issuance of NOC by the Irsa for closure of canals 5.

During discussion on commitment of $ 300 million financing, Additional Secretary EAD and AIIB highlighted the delays faced by the project since its signing on January 18, 2017. Project authorities were directed to ensure the construction as per the agreed schedule, which will ensure T5HP commissioning in 2025.

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Deliberating on disbursement of $ 57.44 million, it was informed by project authorities that $ 27 million disbursements was expected till June 2023. On a question from the AIIB about the impact of increasing rates of interest, the project authorities replied that it will impact on the project costs and they will see as to how it could eventually be met - potentially through some additional financing.

The meeting decided that the Wapda would share with the EAD and the AAIB the actual milestone based disbursement projects for the rest of the project’s life till June 2025 (commissioning) and until the completion of construction beyond 2025 (raising of intake). The Wapda will specifically intimate both the AIIB and the EAD about commitments.

The Wapda has been directed to analyse the impact of rising prices on the overall cost of the project. It was also directed to expedite implementation and accordingly the disbursement status.

Karachi Water and Sewerage Service Improvement Project: project authorities noted that the project faced delays due to Covid-19. However, procurement has slightly improved post-Covid.

Disbursements, which are presently very slow, are going to be accelerated. The project’s commitment was $ 40 million, of which disbursement was $ 16.01 million (40.3 per cent disbursement).

Two issues pertaining to this project: reforms; and capital works KWSB reforms act has been approved by the cabinet and will be placed before the assembly soon. Key management positions are also under recruitment. They will be filled once the KSWB reforms act is passed by assembly.

It was noted that the $ 5 million disbursements were linked to the opening of LCs for truck parts from Italy. Rest of the capital works procurement is being expedited. Project authorities stated that funds amounting to $ 29 million are being utilized for rehabilitation works after floods and further contended that $ 15.5 million will be further disbursed from the AIIB loan till June, 2023.

Karachi BRT Red Line: Serious concerns were raised by EAD and AIIB on the extremely low disbursements of the project. Project authorities stated that 45 percent of signed civil work contract (Lot 1) were related to the two bus depots that were under the use of Sindh Rangers.

On commitment of $ 71.8 million financing, it was noted that after an agreement with the Rangers, contractor has mobilized on Malir Halt depot site. The consultants are conducting a redesign for the reduced amount of space allocated. For the second depot, summary for allocation of alternate 16 acres of land at former Aladdin Park has been approved by Chief Minister, Sindh.

This land belongs to KMC and handing over of land to Trans-Karachi is expected by the end of the current month, whereas initial work at Malir has started. This will involve a change in design of the transport circulation. It was contended that complex utility relocation process further delays project progress.

The AIIB requested EAD to liaise with GoS to the extent possible for land handover process for the bus depot. The AIIB raised concerns over the appointments made in trans-Karachi Board without prior approval from the co-financiers. The Bank emphasized that any new appointments without prior consent of the co-financiers be avoided.

The meeting directed Trans-Karachi to give realistic timelines for handing over the land for Depot.

Balakot Hydropower Project: the meeting was informed that since EPC contractor forms the major part of civil works the project will be on track in a month’s time. Basic design of project is expected to be approved soon.

The AIIB has made commitment of $ 250 million for the project, of which $ 0.625 million has been disbursed, which is 0.25 percent of total commitment.

The project is to be monitored for possible repurposing in case of non-improvement in disbursements.

Other projects which were discussed are: (i) Khyber Pakhtunkhwa Cities Improvement Project; and (ii) Resilient Institutions Sustainable Economy-II with a commitment of $ 250 million, Karachi Water and Sewerage Services Improvement Project-2 and Lahore Water and Wastewater Management Project.

Copyright Business Recorder, 2023


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