Debt Inquiry Commission: Details of 400 foreign loans obtained in last 10 years received

ISLAMABAD: The Loan Inquiry Commission has got details of over 400 foreign loans obtained by federal ministries/divisions and departments as well as provinces during last ten years for the purpose of scrutiny of projects financed through loans.

The detailed scrutiny of some mega development projects executed with the help of foreign and domestic loans has been underway to ascertain any wrongdoings.

However, the Inquiry Commission was assigned to ascertain reasons for surge into public debt and liabilities ballooning from Rs6,690 billion in 2008 to Rs30, 846 billion till September 2018. One top official confirmed to The News on Monday that former finance minister Asad Umar had opposed any move to constitute any Loan Inquiry Commission in first few meetings of the Cabinet when PTI-led government came into power after winning last general elections.

First of all, the Finance Ministry was assigned to present a detailed report on surge in public debt and liabilities on which the Ministry told the premier that the debt increased in those fiscal years when twin deficits – including the budget deficit and current account deficit – had witnessed widening gap and the government had to fill it through loans at accelerated pace.

Asad Umar was not in the cabinet meeting when this issue had first come up under the chairmanship of PM Imran Khan. However, Umar had sternly opposed the move arguing that nothing substantial would come out of it so they must not utilise their energies on such issues.

There was argument that the government obtained loans for financing its internal and external gap with the approval of parliament. If anything wrong was done then first of all the Auditor General would point it out through audit paras. If funds were allegedly embezzled or not utilized then the NAB or FIA could launch investigation. This kind of inquiry commission could also be termed as a no confidence in institutions and mechanism placed in the country.

One top official of Loan Inquiry Commission disclosed to The News on Monday that the Commission possessed powers to conduct forensic audit or could also forward any specific case directly to National Accountability Bureau (NAB) or FIA if found any wrongdoing/embezzlement or fraud in any project funded through Public Sector Development Program (PSDP) or provincial Annual Development Plans (ADPs).

“Total number of foreign loans as part of the public debt stands at 413 in last ten years with total dollar inflows of $70.693 billion while outflows of $44.914 billion. We are now in the process of identifying projects where the major chunk of money was utilized in last ten years,” top official sources confirmed to The News here on Monday. The loan amount, the sources said, was largely utilized for infrastructure projects including motorways, roads, hydropower projects and others. So far the Loan Inquiry Commission had got over 50 briefings from respective ministries/departments and provinces.

The total throw-forward of Public Sector Development Program (PSDP) stood at Rs5.5 trillion and a major chunk out of it belonged to just 14 to 20 mega projects. If these over dozen projects are excluded from the PSDP then the overall cost required for completing whole PSDP projects list would be slashed down significantly.

“The major cost of the PSDP is related to Diamer-Bhasha Dam, Dasu Dam, Mohmand Dam, nuclear power projects of Karachi, major motorways portions from Lahore to Karachi and few others,” said one top official who briefed the Inquiry Commission about development programs and placed mechanism. There are some projects where the project cost escalated manifold and one classic example is Neelum-Jhelum hydropower project as its cost escalated from Rs84 billion to over Rs500 billion. The cost of some other projects also witnessed whopping surge so there is need to ascertain facts and fixing responsibility.

In the last cabinet meeting, Ministry of Finance has prepared and submitted a summary for change of members/ secretary of Inquiry Commission but one official source told this scribe that the Commission could co-opt anyone they wanted to take into their fold and they had taken a few to undertake assigned task in professional manner.

“We are not going for witch-hunt against anyone but this opportunity will be used to place a road-map for future so that the loans could be utilised fully and effectively,” said the official and added that if the Commission did not take decision to expand its decision for holding investigation of more projects then the task for accomplishing report could be done before six month period.

Another official said that the decision to constitute the inquiry commission was taken in right direction adding that the habit of acquiring debt on huge scale has sunk the country’s economy. He said that the commission will work efficiently and will point out the lacunae in the system and highlight the wrong decisions and losses incurred to the already fragile economy.