Multi billion dollar BRT and water projects face funding bottlenecks

The Ministry of Economic Affairs revealed that foreign funded projects in Karachi and Hyderabad totaling $3.71 billion

Islamabad: The Ministry of Economic Affairs revealed that foreign funded projects in Karachi and Hyderabad totaling $3.71 billion over the last three years face delayed implementation, uneven fund utilization, and lack of transparency in reporting. Lawmakers expressed concern that billions in aid from the World Bank, ADB, AIIB, France, Korea, and Japan are not being fully utilized, potentially undermining urban development, water management, and public transport initiatives.

The National Assembly received Starred Question No. 93, moved by Mr. Muhammad Moin Aamer Pirzada, MNA, requesting details of foreign loans and aid received for development projects in Karachi and Hyderabad over the past three years. The Ministry of Economic Affairs submitted an annex detailing $3.71 billion in committed funds, with $1.18 billion disbursed across 21 major projects, highlighting both utilization and delays.

Among the largest projects is the Karachi Mobility Project (KMP) funded by the World Bank, with a commitment of $539.7 million, of which only $110.4 million has been disbursed. Similarly, the Sindh Water Agriculture Transformation Project valued at $292 million has disbursed $92.3 million to date. The Karachi Solid Waste Emergency and Efficiency Project has utilized $55.6 million of its $100 million allocation.

Controversially, multiple Bus Rapid Transit (BRT) projects have seen significant delays despite substantial funding. The Karachi BRT Red Line, supported by France and AIIB, received $72.15 million and $71.8 million respectively, but disbursement so far is $18.87 million and $14.57 million. The ADB backed Karachi BRT Red Line Project, initially due for completion on 30 June 2024, has been revised to 30 June 2026, with only $52.1 million of the $284 million committed amount utilized.

Officials admitted that the Ministry of Economic Affairs does not track detailed utilization at the project level, as federal, provincial, and executing agencies are responsible for implementation. This has raised concerns among lawmakers about accountability, transparency, and the effectiveness of these multibillion dollar investments.

Other highlighted projects include the Karachi Water and Sewerage Services Improvement Project (KWSSIP-I and II) funded by the World Bank, totaling $280 million, with FY24-FY26 disbursements of $14.1 million. The Establishment of IT Park supported by Korea, with $158.416 million committed, has seen only $4.705 million disbursed. Emergency response projects, including the Emergency Flood Assistance Project in Hyderabad funded by ADB, committed $200 million with $90.23 million disbursed. The Sindh Emergency Housing Reconstruction Project, also ADB backed, has utilized $255.63 million of the $400 million allocation.

The Committee highlighted the cumulative impact of underutilization, pointing out that essential sectors such as water supply, sanitation, transportation, and urban infrastructure continue to face bottlenecks. Officials noted that multilateral donors like the World Bank, ADB, AIIB, France, Korea, and Japan have tied disbursements to specific implementation milestones, which may partially explain the slow pace.

Lawmakers urged the Ministry of Economic Affairs, provincial governments, and executing agencies to enhance coordination, ensure timely submission of utilization reports, and improve monitoring mechanisms. Transparency in fund allocation and adherence to project timelines were emphasized as critical to prevent further delays and ensure that Karachi and Hyderabad residents benefit from foreign funded infrastructure and social development programs.