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Karachi Woes: World Bank Provides $652M Loan to Help Make Pakistan’s Economic Powerhouse Livable

Karachi has “highly complex political economy, highly centralized but fragmented governance, land contestation among many government entities, and weak institutional capacity. The city needs $10bn over next 10 years to make it livable.

PKONWEB — The World Bank has approved $652 million soft loan for improving civic and public transport facilities in Karachi – the largest metropolis that needs nearly $10 billion additional investment over 10 years to make it livable– Karachi was ranked among the bottom 10 cities in the Global Livability Index.

The World Bank was committing the loan for three Karachi projects: strengthen institutions, municipal services and infrastructure (roads, water, sewage, solid waste, etc.) in the mega city, according to a handout that the local office of the Washington-based lender issued on Friday. The board of directors of the World Bank approved the loan a day earlier, The Express Tribune reported.

Speaking to PKonweb, PTI stalwart and Sindh Opposition Leader Firdous Naqvi said, “It’s good for Karachi.” However, Naqvi and several observers say the checks and balances are not that great on Aid-related projects. “Consultancy and supervision costs are half the project costs,” Naqvi added. Others add to the list poor governance and politicking.

The country’s economic engine for more than a decade has been experiencing water and sanitation crisis that stems largely from poor governance. Only 55% of water requirements are met daily. Also, no cohesive transportation policy exists for the largest city, even as thousand new vehicles are added to the roads each day.

The World Bank said the approved funding for these projects will focus on urban management, public transport, and safe water and sanitation to enhance Karachi’s livability and competitiveness.

The projects have been approved in light of the findings of the Karachi Transformative Strategy, which estimated that infrastructure needed nearly $10 billion for the city over a period of next 10 years.

The study noted that compared to huge financing needs, the city was not generating enough resources to meet these requirements. The collections of urban immovable property tax from Karachi remained dismal compared to the potential. Punjab collected four times as much in this tax as Sindh every year, it added.

The current infrastructure spending by the public sector, the study said, is well below these requirements, despite large recent increases.

According to the study, the country’s economic powerhouse (with a population of 16 million) has “highly complex political economy, highly centralized but fragmented governance, land contestation among many government entities, and weak institutional capacity that have made it difficult to manage the city’s development”.

It noted that the city is very dense, with more than 20,000 persons per square kilometer, while no cohesive transportation policy exists for Karachi, even as the number of vehicles is geometrically increasing.

Karachi is also experiencing water and sanitation crisis that stems largely from poor governance. Only 55% of water requirements are met daily. The World Bank said that three projects along with another ongoing Karachi Neighborhood Improvement Project worth $85 million will help reduce this resource gap and help the city meet the needs of its women and men.

The World Bank and the Sindh government also plan to spend $1.6 billion for improving water and sanitation services.

The lender also approved $70 million for Khyber Pakhtunkhwa (KP) tourism services. Nearly half a million entrepreneurs and travelers will benefit from upgraded facilities at different tourist destinations. The project will introduce sustainable destination management through infrastructure, facilities and assets. Initial focus will be cover Chitral, Galliyat, Kalam, and Naran.