Grants disbursement in KP, Fata to begin as NAB drops probe against WB project

PESHAWAR: The businesses and industries shattered by the years of terrorism in Khyber Pakhtunkhwa and Federally Administered Tribal Areas (Fata) would again receive grants as the National Accountability Bureau (NAB) has closed a probe into the $20 million project of the World Bank designed for economic revitalisation in the province and adjoining tribal areas.
The sources in the Industries Department told The News that the administration of the Economic Revitalisation of Khyber Pakhtunkhwa and Fata (ERKF) would soon restart disbursement of the matching grants under the Multi-Donor Trust Fund’s initiative as the NAB had dropped the inquiry into the allegations of corruption in the project.
Sharing the document, including copies of the letters of the former secretary Industries, World Bank representative and NAB with this scribe, the sources said that NAB had informed the Secretary Industries through a letter on October 16 that it had closed inquiry into the allegations of corruption and corrupt practices against the officials of the ERKF, Small and Medium Enterprises Development Authority (SMEDA) and others.
The ERKF was designed on the basis of the recommendations of the Post-Crisis Needs Assessment (PCNA) for the economic rehabilitation of the areas devastated by the July 2010 floods and militancy in Khyber Pakhtunkhwa and Fata.
The project, being financed by the World Bank through a grant of $20 million, included the component of Small and Medium Enterprises (SME) Development, investment mobilisation and institutional capacity building to foster investment and reforms.
The document shows that the disbursement of the $20 million grants remained suspended for more than a year as the provincial bureaucracy sent 39 cases of grants to the NAB on September 5, 2014 despite the fact that the World Bank on September 3, 2014 rated the project’s performance as satisfactory.
The project remained suspended for a year as NAB and Khyber

Pakhtunkhwa Ehtesab Commission carried out inquiries into the corruption allegations against the project staff and SMEDA officials.
However, after a backbreaking process of inquiry into graft allegations that continued for a year, the NAB closed it at its end and returned the matter to the Industries Department for further action.
The sources said that the SMEs which suffered due to this willful suspension of grant disbursement time and again sought action against the government officials for sending these cases to the NAB merely on the verbal orders of their superiors.
They added that sending the cases to the NAB was aimed at causing delay in the grants disbursement to the devastated businesses as two separate inquires of the project were already conducted under the supervision of chief minister and chief secretary of the province.
Both the inquiries had declared the project free from any kind of financial mismanagement or irregularities, the sources said.
They pointed out that the ex-secretary Industries also bypassed the project steering committee, which was supposed to ensure proper implementation of the project, and sent the cases to the NAB causing a delay of one year in the grant distribution to the affected businesses whose cases had already been approved.
World Bank Operations Advisor for Pakistan, Reynold Duncan, in a letter on
September 3, 2014 directly addressed to Muhammad Ali Shahzada, ex-secretary Industries, wrote that funded entirely by MDTF for Khyber Pakhtunkhwa, Fata and Balochistan the ERKF was doing well and it had already exceeded its performance targets under the SMEs development component by disbursing grants to 887 SMEs across Fata and Khyber Pakhtunkhwa as of June 15, 2014.
The World Bank advisor also lauded the disbursement of matching grants to 20 women entrepreneurs in the province, saying that the project picked up significantly after the Mid-Term Review (MTR) in December 2013 as an additional $4.57 million were disbursed in the province’s designated account.
However, the ex-secretary Industries ignored the World Bank evaluation of the project and sent the 39 grant cases to the NAB for probing the corruption allegations.