ADB turns down request for AJP loan extension
* Soft loan was part of $350 million Access to Justice Programme
* Pakistan to surrender unutilised $10 million after June
By Zafar Bhutta
ISLAMABAD: The Asian Development Bank (ADB) has turned down Pakistan’s request for an extension to the $20 million Technical Assistance Loan programme aimed at providing technical support for the Access to Justice Programme (AJP), sources privy to the developments told Daily Times. Law Minister Farooq H Naik had asked the ADB president in a letter to review the bank’s decision to end the soft loan given at one percent. “In view of the Government of Pakistan’s commitment and the priority accorded to justice reforms, the ADB is ... requested to extend the Technical Assistance Loan for three years until June 30, 2011, which is feasible for implementation,” says a copy of the letter that the sources made available to Daily Times. The sources said the ADB had made the decision to withdraw the loan because the bank was already scheduled to give a $1.9 billion loan at the market rate to the new government in the 2008-09 financial year. The government had no alternative funding plans for the activities previously financed by the programme, they said, and its withdrawal would have serious consequences on the implementation of schemes already in the pipeline. “After the ADB withdraws the Technical Assistance Loan, the government will have to provide funding for technical works such as procurement and monitoring and evaluation,” a source said, adding that the government lacked the finances and the expertise to handle the burden. “The Access to Justice Program may face great difficulties. The government will find it difficult to implement the rest of the programme if its Technical Assistance portion is taken away,” another source said. Responding to the letter, the ADB turned down the minister’s request and declined to extend the programme. Of the $350 million funds for the AJP, $20 million were made available under the Technical Assistance Loan, the sources said, adding that the government had utilised half of the funds and would have to surrender the remaining $10 million after June 30. The bank has, however, extended the remaining AJP sum of $330 million until 2011 and would charge a 7 percent mark-up. Technical Assistance Loan had originally been scheduled to continue as long as the AJP project, “so that it could provide all the necessary professional expertise and assistance for performance of various functions and implementation of schemes”.