World Bank cancels $100 million loan for Pakistan

[Ryuzaki]

ISLAMABAD: The World Bank has cancelled a $100 million loan to Pakistan for a natural gas efficiency project due to no progress in achieving the development objectives and a lack of interest on the part of the gas distribution company.

The project, which was to be carried out by Sui Southern Gas Company (SSGC) in its distribution areas in Karachi, interior Sindh and Balochistan, was aimed at enhancing the supply of natural gas by reducing physical and commercial losses of gas in the pipeline system.

A World Bank report said the failure of the project led to its closure and, as a result, the levels of unaccounted-for gas (UFG) remained high while continuing to drain the precious natural resource, the Dawn reported.

Illegal connections, one of the drivers of UFG, were increasing at a rate faster than the countervailing reduction of technical losses.

Justifying its rating of "unsatisfactory", the World Bank report said it should have exercised caution and not proceeded with a project that did not receive sustained interest from the board and management of SSGC, which had insufficient ownership in the project.

Against the original commitment of $200m, the bank had disbursed only $0.25m.

The ministry of petroleum and natural gas was keen on the reduction of UFG, which was on the rise at the time of the project preparation and increased further during the project implementation phase.

Oil and Gas Regulatory Authority (Ogra) had imposed a penalty on gas companies for UFG beyond the benchmark of 4.5 per cent.
Bureaucratic processes within SSGC also contributed to procurement delays and bid expiration. The SSGC management attributed the failure of the project to the procurement process.
Most of UFG comes from dilapidated or deteriorating pipelines, leaking joints, gas theft in the form of tampered-with metres, illegal connections and malfunctioning metering equipment.


The World Bank undertook a strategic review of the project, which identified strong implementation challenges with no progress towards achieving the development objectives of the project as well as no disbursement against project-related activities.

http://timesofindia.indiatimes.com/...on-loan-for-Pakistan/articleshow/55873422.cms

 

[monitor]

Yeah, but they have CPEC.

why you are mocking ?? WB have canceled the loan for non efficiency/non interest from user not for animosity /reluctance from WB . btw thanks you return after long break welcome back .

 

[Jugger]

Corruption is rampant in Pakistan, I dont think many companies care about the greater good of the country and people.
This is one such example of gross mismanagement.

 

[Foggy_Bottom]

CPEC will change everything. Russia, Iran, Europe already joined CPEC.
.

You are perhaps ignorant of the fact that an obscure. one time, off the cuff statement made to the media from some Russian body, translated into English, is enough for our Pakistani friends to assume an "actual joining" into CPEC.

BTW I have not figured out what it means to join CPEC. CPEC is a project that none of these other presumed partners will fund- so how could they "join" CPEC. But let's not burst that bubble for the crowd.

 

[rashid.sarwar]

No more loans.....
No more loans.....
No more loans.....
plz
No more loans.....

 

[Jugger]

No more loans.....
No more loans.....
No more loans.....
plz
No more loans.....

Without loans even some families can't run let alone countries.

 

[xyxmt]

You are perhaps ignorant of the fact that an obscure. one time, off the cuff statement made to the media from some Russian body, translated into English, is enough for our Pakistani friends to assume an "actual joining" into CPEC.

BTW I have not figured out what it means to join CPEC. CPEC is a project that none of these other presumed partners will fund- so how could they "join" CPEC. But let's not burst that bubble for the crowd.

why don't you and Indians sit together and figure it out, seems like non-related parties are more concerned about it

 

[Ram Mahadev]

No more loans.....
No more loans.....
No more loans.....
plz
No more loans.....

That's what they just said

 

[saiyan0321]

First of all @waz @Irfan Baloch @WAJsal

This should be in the economy section bcz the massive inability of the OP to understand the news and how its not related to strategic affairs but to economy.

Secondly I would also Implore you to remove the troll posts of illiterate posters who have brought CPEC into this.

Clearly the world bank has cited reasons for this and it has simply to do with corruption and negligence on our part which is indeed unforgivable.

The main issue was UFG which is unaccounted for gas and the high rate of illegal connections forced the world bank to call it quits. We have to understand that a bank is a business and it will close down hard on projects which will create issues for it.

In the mean time

PESHAWAR: The PTI-led provincial government has come out with all guns blazing to finish its tenure on a high note as it has decided in principle to obtain Rs70 billion International Development Association’s loan from the World Bank, according to sources.

http://www.dawn.com/news/1300529/kp-govt-to-get-rs70bn-world-bank-loan-to-whip-up-development

Its all economics and profits gentlemen but the dregs can't help but make snide remarks.


In 2012 it was highlighted that Pakistan's greatest issue is power and security. Solve these and we will recover our economy but it was a blanket statement. It is without a doubt true that our economy took a hit like nothing before due to massive power outages and terrorism but after increasing security and creating relative peace along with reducing the power outages greatly, we now stand at the crux of the next step and the need of the hour is to solve the next problem to make sure our economy continuous this growth. The step is combat corruption. Easier said than done but our battle now begins with corruption and it is a war that we must win at all costs otherwise we will never have a great economy if its core is rotten with corruption.

The news is corruption. We must combat it.

 

[Sully3]

bharatis are getting desperate these days.

awful thread by the OP

 

[maximuswarrior]

Corruption is rampant in Pakistan, I dont think many companies care about the greater good of the country and people.
This is one such example of gross mismanagement.

Corruption is rampant everywhere and even more so in India. You know it. This has nothing to do with Pakistan. Unfortunately, corruption exists everywhere. No country on this planet is free from corruption.

 

[Parwez Khuri]

corruption ruin all this south asia reason growth. We need to get rid of this. The biggest enemy of india success is "CORRUPTION". but These corrupt politicians and bureaucrats not even want to accept it. We all should need to get rid of this.

 

[maximuswarrior]

ISLAMABAD: The World Bank has cancelled a $100 million loan to Pakistan for a natural gas efficiency project due to no progress in achieving the development objectives and a lack of interest on the part of the gas distribution company.

The project, which was to be carried out by Sui Southern Gas Company (SSGC) in its distribution areas in Karachi, interior Sindh and Balochistan, was aimed at enhancing the supply of natural gas by reducing physical and commercial losses of gas in the pipeline system.

A World Bank report said the failure of the project led to its closure and, as a result, the levels of unaccounted-for gas (UFG) remained high while continuing to drain the precious natural resource, the Dawn reported.

Illegal connections, one of the drivers of UFG, were increasing at a rate faster than the countervailing reduction of technical losses.

Justifying its rating of "unsatisfactory", the World Bank report said it should have exercised caution and not proceeded with a project that did not receive sustained interest from the board and management of SSGC, which had insufficient ownership in the project.

Against the original commitment of $200m, the bank had disbursed only $0.25m.

The ministry of petroleum and natural gas was keen on the reduction of UFG, which was on the rise at the time of the project preparation and increased further during the project implementation phase.

Oil and Gas Regulatory Authority (Ogra) had imposed a penalty on gas companies for UFG beyond the benchmark of 4.5 per cent.
Bureaucratic processes within SSGC also contributed to procurement delays and bid expiration. The SSGC management attributed the failure of the project to the procurement process.
Most of UFG comes from dilapidated or deteriorating pipelines, leaking joints, gas theft in the form of tampered-with metres, illegal connections and malfunctioning metering equipment.


The World Bank undertook a strategic review of the project, which identified strong implementation challenges with no progress towards achieving the development objectives of the project as well as no disbursement against project-related activities.

http://timesofindia.indiatimes.com/...on-loan-for-Pakistan/articleshow/55873422.cms

Entirely possible that the WB assessment is accurate. Corruption is indeed rampant in Pakistan. I'm not a fan of loans from the IMF and the WB, but that is a separate debate. The Sharif government should do much more to tackle corruption. Unfortunately, the current government has been accused of being part of mass corruption.

 

[Finer]

100 million dollar loans is cancelled, but more than 50 billion dollars is not cancelled. Oh no, Pakistan is ruined.

Only in India media is reporting that world bank has cancelled $100 million dollars loan. Never ever trust Indian medias given their integrity that is at all-time low.

In neutral source especially the direct source of World Bank, they issued more than 35 million dollars for water sector and climate, energy and climate. This year, more than 1 billion dollars is approved due to economical reform, and because of that, more than 300 million dollars is cleared in advanced for Punjab education sectors. 500 million dollars in policy loans, 100 million dollars for reduction of flood and drought risks, and 420 million dollars for international markets [investments i presume].

If Pakistan keeps it up with the thriving economy and with CPEC on board as well as energy sectors are completed, soon Pakistan will be independence and free from needing loans ever again. That's when India should worry about. Pointless thread.

 

[marbella]

100 million dollar loans is cancelled, but more than 50 billion dollars is not cancelled. Oh no, Pakistan is ruined.

Only in India media is reporting that world bank has cancelled $100 million dollars loan. Never ever trust Indian medias given their integrity that is at all-time low.

In neutral source especially the direct source of World Bank, they issued more than 35 million dollars for water sector and climate, energy and climate. This year, more than 1 billion dollars is approved due to economical reform, and because of that, more than 300 million dollars is cleared in advanced for Punjab education sectors. 500 million dollars in policy loans, 100 million dollars for reduction of flood and drought risks, and 420 million dollars for international markets [investments i presume].

If Pakistan keeps it up with the thriving economy and with CPEC on board as well as energy sectors are completed, soon Pakistan will be independence and free from needing loans ever again. That's when India should worry about. Pointless thread.

Not an economist but all countries of world need loan including china, turkey and russia. so its okay to have loans. cpec itself is a partial loan. Don't bother to be a loan free nation. Try to be a prosperous nation.Independence has little to do with loans nowadays.