Pak pays nearly $100 million penalty to ADB for not implementing projects on time: Report

In another blow to the Imran Khan-led Pakistan government, the Asian Development Bank has charged a penalty of approximately $100 million to Islamabad for not implementing the projects on time. According to a report by a Pakistan-based English daily, The News, the government has paid the penalty amount for showcasing a classic example of "bad governance" for not implementing "donor-funded" projects in the country. The report said that various governments in the country paid foreign exchange reserves of approximately $100 million since 2006.

"The ADB imposed 0.15 per cent amount as commitment charges on signed projects if the executing agencies failed to deliver on the implementation of projects within the stipulated time-frame and signed loan amount was not disbursed," The News quoted top official sources as saying.

According to Pakistan-based English daily, an amount of $900 million was approved by the ADB - a regional development bank established to promote social and economic development in Asia - for the Jamshoro Power project in order to generate 660MW of electricity through coal fire technology in 2014. The regional bank had asked Islamabad to complete the project by 2019, but the government has not completed the project yet. 

Some projects approved five years ago yet to start

The newspaper reported that the bank has disbursed less than 50% amount ranging around $313 million and therefore it noted that Islamabad is entitled to pay the penalty as commitment charges. Meanwhile, the country has also another set of examples that could prove "bad governance" in the country. The ADB had funded a project in 2015-16 in order to establish a smart metering system in the country. Despite getting approval nearly five years ago, the said project has not been started yet. 

The total amount Pakistan has paid as the commitment charges in pockets every year starting from 2006 till June 2021 amount to nearly $100 million in the last 15 years, revealed The News. 

Pakistan paid over ₹ 26 billion to China amid increasing debt

Pakistan has had to pay over ₹ 26 billion in interest cost to China to repay a maturing debt in the fiscal year 2020-21, reported ANI citing local media and other sources. According to the annual financial statement that was released by the State Bank of Pakistan (SBP) on October 30, the bank tapped the $4.5 billion or 30 billion yuan trade finance under the China-Pakistan swap arrangement. Reportedly, the already drowning in debt country is facing scores of "hidden debts" totalling $385 billion due to China's Belt and Road Initiative (BRI) project. According to a report by AidData, an international development research lab based at the College of William and Mary in Virginia, China has used debt rather than an aid to establish a dominant position in the international development finance market. 

With inputs from ANI

Image: AP