Islamabad: Pakistan has turned down a USD 2 billion loan from the Asian Development Bank (ADB) and another USD 1 billion loan from the World Bank to reconstruct infrastructure destroyed by the devastating floods. Islamabad has now decided to rebuild "from its own resources".
The News International cited sources as saying that the move stunned the ADB in particular.
The multibillion credit lines were meant for the reconstruction of the public sector infrastructure destroyed by the floods that uprooted nearly 20 million people and left 1,700 dead.
Finance Minister Hafeez A Sheikh has conveyed to both the development banks that the government was not interested in using the loans for rebuilding infrastructure.
He told the banks that Pakistan would prefer to use the approximate amount of USD 1.5 billion to USD 2 billion, being received from the UN and other sources, for relief and speedy recovery of the flood-hit areas.
"And as far as rebuilding of the flood destroyed infrastructure is concerned, the government shall do it from its own resources," a source quoted the minister as saying.
Minister of State for Finance, Hina Rabbani Khar, told the daily that the "government has changed its policy" and it won`t use the loans offered by the WB and the ADB for the reconstruction of the infrastructure; instead, it would use the other grants of USD 1.5 billion to USD 2 billion.
She said the federal and provincial governments would divert their resources to reconstruct the infrastructure hit by the floods.
She added that the federal government was yet to take the provinces into confidence over its decision not to use the ADB and the World Bank loans amounting to USD 3 billion for the reconstruction phase.
The media report said Islamabad, Khyber-Pakhtunkwha and the Punjab had expressed their opposition to the loan, whereas Sindh, which supported the loans, was the exception.
"The government`s decision not to use the loan of USD 3 billion has really perturbed both the World Bank and the Asian Development Bank, as their targets to market their loans in Pakistan would suffer," sources in both the banks told the daily.
Ismail Khan, who deals with the media in the ADB, declined to either confirm or reject the news and only said that the ADB`s country director was not available for comments as he had gone to Manila.