Project delays could cost Pakistan $2.3B in ADB funds

A crane used at construction sites. Pakistan could lose $2.3 billion meant for key development projects because of delays. Photo by: Robert Linder

The Asian Development Bank’s patience with Pakistan is growing thin. If it runs out, the country could lose $2.3 billion of committed loans meant for key development projects — and more.

The funding agency is reportedly “irked” on the delays of its many funded projects in Pakistan, currently totaling 21. Sources from the finance ministry who were not identified said ADB has already asked Pakistan to get the projects back on track. Otherwise, the agency will stop releasing any more funds for the country.

ADB spokesperson Ismail Khan refused to confirm or deny the threat, according to the The Express Tribune.

One of ADB’s concerns involves the slow implementation of a $1.3 billion power grid project by the National Transmission and Dispatch Company, the state-owned firm that operates and maintains the national power grid. NTDC officials have reportedly been delaying procurement, design finalization and contract awarding, and has allegedly leaked information on bids to competitors in return for favors.

The same issues apply with the National Highway Authority, where officials allegedly conspire with contractors to up project costs. NHA Chairman Mohammad Ali Gardazi, however, said most of the projects are delayed because of ADB’s stringent land acquisition policies.

These delays could hamper the country’s future negotiations for fresh loans and could lead to more financial troubles. It has already forfeited $3.7 billion from the International Monetary Fund in August last year.

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About the author

  • Jenny Lei Ravelo

    Jenny Lei Ravelo is a Devex Senior Reporter based in Manila. She covers global health, with a particular focus on the World Health Organization, and other development and humanitarian aid trends in Asia Pacific. Prior to Devex, she wrote for ABS-CBN, one of the largest broadcasting networks in the Philippines, and was a copy editor for various international scientific journals. She received her journalism degree from the University of Santo Tomas.