PAKISTAN: World Bank loan to reform Sind infrastructure

18 February 1994

The World Bank is to lend $48.6 million for a structural adjustment and investment programme for Sind province. The aim is to improve the provincial government's economic performance and infrastructure in Karachi and three other cities. The scheme, known as the Sind special development project, will include privatising several companies.

A total of $32.2 million will be invested to remedy urgent infrastructure problems in Karachi. The completion of a flood protection scheme involving dams parallel to the Malir river will cost $14.4 million; $11.3 million will go towards building a railway bridge over a main road and widening and repairing a road bridge over the Lyari river; and traffic circulation at 16 junctions will be improved at a cost of $4.1 million. The loan will also finance studies on Karachi's transport demand and management, and a transport infrastructure improvement plan for the three interior cities of Nawabshad, Larkaba and Mirpurkhas.

The rest of the loan will help the government carry out fiscal and financial reforms aimed at reducing its budget deficit, and liberalise economic regulations. The provincial government is to improve its tax collection to increase revenue, and reduce spending by cutting down on subsidies. Liberalisation measures will include deregulating urban public transport and lifting import restrictions on transport-related products. It will also include privatising Karachi Transport Corporation and several agricultural companies which have been a heavy burden on the Sind government's coffers.

The structural adjustment programme will run for 20 years, and the results will be monitored closely by the World Bank. Any new urban infrastructure loans to Sind will be conditional on the implementation of the adjustment programme.

The loan was approved on 14 December but has to be ratified by the government. Tender documents for the flood protection, the railway bridge and the traffic management schemes are expected within the next year, World Bank officials say.

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