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Pak-funded projects in Afghanistan virtually hamstrung

Pak-funded projects in Afghanistan virtually hamstrung

Oct 15, 2015 - 11:18

LAHORE (News Lens Pakistaninfo-icon/Pajhwok): Pakistan’s pledge to take part in Afghanistaninfo-icon’s reconstructioninfo-icon was indeed sensible, but it ran into snag as funding for the development projects nearing completion has been stopped due to mistrust, irregularities and unavailability of a proper banking system.

Analysts had predicted that Pakistan’s strategy to provide Afghanistan with goods and services for development would help it gain a foothold in Afghanistan, while countering the Indian agenda of holding hegemony in the region.

Reports from the Finance Ministry indicate projects worth billions of dollars have been initiated in Afghanistan as a gesture of goodwill. They are earning a bad name, as the government has virtually halted release of money, abruptly. A number of further impediments added to an already tangled situation.

Sources familiar with the situation told News Lens Pakistan on condition the accountant general had put the release of the money on hold after the auditor general of Pakistan (AGP) made some audit paras. Consequently, the Finance Ministry also neglected its responsibilityto ensure the release of funds to contractors in Afghanistan.

The projects most affected by the government’s apathy areRehman Baba High School in Kabulinfo-icon, which is 97% complete in 2013 but not operational as yet, Nishtar Kidney Centre in Jalalabad, completed in 2010 but was not handed over to the Afghan government due to lack of medical equipment, Jinnah Hospital in Kabul, 85% executed in 2013, Naib AmeenullahLogari Hospital in Logar, 70% done in 2013, and the Torkham-Jalalabad road.

Former accountant general of Pakistan Tahir Mehmood dared speak on the issue while the ministries concerned refused to comment. He told News Lens Pakistan the audit of huge amounts of public money fell under the jurisdiction of AGP and the departments concerned were bound to follow its guidelines in accordance with the contracts.

“The release of money was halted after the AGP came across many irregularities and violations of the Pakistan Public Regulatory Authority (PPRA) rules. Who is to blame for the funding cuts?” he asked.

Mehmoodexplained the AGP was not to be blamed for the situation. “Our job is to ensure that the rules and regulations are being obeyed and to see whether the contract is being executed according to the existing applicable laws or not,” he observed.

“We have fulfilled our constitutional obligations and if the Finance Ministry and the Planning Division have objections, they should alter the rules.” The Planning Division had given the contract to Frontier Works Organisation (FWO), he said. Under the contract, subcontractors were to be involved in more than 30% execution of the projects.

“In violation of the PPRA rules, the Planning Division gave 100% execution of projects to subcontractors amidst deteriorating situation in Afghanistan and the FWO was asked to put the development projects on hold,” he noted.

If it really was serious about countering Indian hegemony, the Pakistan government should have employed international contractors and bidders to complete the development projects, which had already consumed billions of rupees.

Another obstruction to the release of money to contractors in Afghanistan is the dearth of a secure banking system for transactions, as most cash is transferred to Afghanistan through hundi. Although it has been 13 years, no government has ever decided on the execution of the transaction system or how to pay contractors and subcontractors.

Several sub-contractors have been arrested at the airport, carrying dollars to pay for the labour cost in Afghanistan. Imran Shaukat, one of them, revealed the money was transferred through hundi with the consent of the government. “I was once arrested at the airport and released after the intervention of the Finance Ministry.”

Analyst Amir Mateen called it a state within a state. “On the one hand, the government is taking measures to curb this menace and on the other, it’s promoting hundi in such sensitive matters,” he lamented.

There are no allocations for foreign exchange in the budget for these projects. Contractors were paid in Pakistani rupees until 2007, as the dollar was stable but once the PPP government came into power, the value of the dollar increased.

The former AGP said it had already been decided the contractors would be paid according to the value of the dollar. “But the SOPs of payments in dollars were not decided. Hence, when NLC and FWO asked the Finance Ministry to pay in dollars, the ministry backed out.”

Reportedly, Foreign Affairs Adviser to the Prime MinisterSartaj Aziz wrote a letter six months ago to Minister of Planning and DevelopmentAhsan Iqbal to resume the transfer of funds for the completion of the development projects in Afghanistan, but his request is yet to be entertained.

When contacted by News Lens Pakistan, Sartaj Azizsaid some amendments had been made to PPRA rules to restore the release of funds for the projects. “The amendments approved in PPRA rules will allow awarding full contracts to subcontractors in Afghanistan.”

However, he noted a meeting, which was scheduled to take place in the first week of November to review the projects, had been deferred for an indefinite period. Regarding the illegal means being used for cash transfers, the advisor said there were no proper banking channels available in Afghanistan.

“Therefore, hundi and remittance are the only means that can be used to provide money to contractors in Afghanistan,” he argued, saying the contractshad been given to the NLC once againto ensure the completion of the schemes.

The development projects were initiated under the Gen. Pervez Musharraf regimein 2002, when Shaukat Aziz was finance minister. Pakistan donated $100 million for the reconstruction and development of Afghanistan. FWO and NLC were contracted to build roads, infrastructure, schools and hospitals.

During his visit to Afghanistan in 2005, Shaukat Aziz announced another $100 million for development projects. The Pakistan government added $50 million at the London Conference on Afghanistan and later announced $50 million more, making the total investment worth $300 million.

When PML-N came into power, Prime Minister Nawaz Sharif added a further $200 million, raising the invested amount to $500 million. Unfortunately, the fate of the Pakistan-funded projects remains uncertain -- thanks in large part to political tensions between the neighbours.


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