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January 2, 2015

$568m grant lapses, PAC panel told


January 2, 2015

ISLAMABAD: The Implementation Committee of the Public Accounts Committee (PAC) learnt to its shock on Thursday that a grant of $568 million expired as the government failed to utilise it between year 2000 and 2008.
Audit officials told the committee that during the audit of Economic Affairs Division (EAD) for the year 2007-08, it was found that the EAD’s negotiation, coordination and monitoring mechanism was not working effectively and this reflected in the fact that a grant of $568 million could not be disbursed during January 2000 and June 30, 2008.
The committee met here with its chairman Rana Afzal in the chair to review the implementation status of PAC directives on the audit paras of EAD and the Establishment Division.The committee was told that 85 percent of grants were lost during January 2006 to June 30, 2008 as donors in general do not disburse grants when relevant government agencies fail to comply with counterpart requirements articulated in their commitment.
Secretary Economic Affairs Division Saleem Sethi told the committee that the funds in question lapsed as they meant for the projects which were not conceived. “These loans are not demand-driven but donors-driven,” he told the committee.
He further told the committee that the government had sent a draft of Foreign Assistance Policy Framework to the provinces to seek their suggestions and once they got feedback from the provinces the draft would be sent to the cabinet for approval so that it could be tabled in Parliament for enactment of the act.
“Under the proposed act only demand-driven grants and loans would be achieved rather than donor-driven grants and to eliminate the grants which were provided without planning of the projects,” he told the committee.
The committee expressed dismay at the audit official revelation’s that the state-owned enterprises including Wapda, NHA and IDBP (Industrial Development Bank of Pakistan) had not returned their loans worth billions

of rupees.
The audit officials told the committee that Wapda owned Rs6.63 billion, NHA Rs12.40 billion and IDBP Rs358.7 million which were availed of in the decade 2000 but yet not returned.The committee directed the presence of officials of Wapda, NHA and IDBP in the next meeting and also directed the department concerned to recover loans from these state-owned enterprises within one month.

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