he World Bank-funded Sindh People’s Housing for the Flood Affected project aims to provide crucial housing support to millions displaced by the 2022 floods. However, the long-term financial burden of this initiative has raised eyebrows. The loan used to fund the project will eventually be repaid by Pakistan’s citizens, including the flood victims themselves, through direct or indirect taxes, potentially exacerbating financial stress on the already vulnerable population and economy of the country.

In the wake of the catastrophic floods of 2022, Sindh was the most affected region in Pakistan, with nearly 1.5 million houses destroyed and another 600,000 partially damaged, according to the Sindh Disaster Management Authority. To address this devastation, the provincial government, in collaboration with the World Bank, launched the SPHF programme.

According to SPHF figures, the floods damaged or destroyed 2.1 million houses and displaced over 12.36 million people. The financial toll of the disaster exceeded $5.5 billion. While Sindh’s rural population is approximately 23 million, the SPHF programme targeted around 12 million of the flood-affected residents for housing reconstruction. The burden of loan repayment for the World Bank-funded housing project will ultimately fall on the shoulders of the people including the flood victims it aims to support.

Hussain Jarwar, CEO of Indus Consortium, praises the Sindh government’s World Bank-supported housing initiative, calling it a much-needed effort. “It’s a positive step,” he says, “but it’s crucial to recognise that this is a loan. It will ultimately be paid by poor citizens through regressive taxes.”

Jarwar says debt sustainability is the real issue that was overlooked by the World Bank when approving the loan. “This should have been a concessional loan or part loan, part grant,” he suggests.

He says Pakistan is already a highly indebted country. The repayment of this loan will place an even greater burden on taxpayers. “These are poor people. They are already paying indirect taxes just as houses are being built for them. The loan will only add to their struggles,” Jarwar notes.

Progress the house building front has been slow. Out of the more than two million destroyed homes, only 15 per cent have been completed so far. The remaining (85 per cent) families still await the construction and handover of their houses.

SPHF data show that disbursement of funds for 650,000 houses has been completed. These houses are under various stages of construction. Nearly 300,000 houses have been completed. Post-plinth construction has been completed for 450,000 houses.

The World Bank’s $500 million funding for SPHF has so far yielded limited results. Out of the more than 2 million destroyed homes, only 15 per cent have been completed so far.

“This is the world’s largest housing project, says Sana Khoja, spokesperson for the SPHF, drawing a comparison to Nepal’s post-earthquake reconstruction in 2015 where 800,000 houses were built. “Here, we’re talking about constructing 2.1 million homes for a population of 12.36 million. That’s more people than the entire populations of 154 countries globally. There has been significant progress in a year.”

The World Bank’s Project Information Document reveals that Sindh government had planned to secure $1 billion financing for housing reconstruction through potential donors and financial partners. However, such efforts to bridge the financing gap may eventually burden taxpayers.

“The housing project has attracted a diverse range of partners, including key donors and private sector collaborators. Initially, the project began with a contribution of $227 million from the Sindh government and $500 million from the World Bank. As the project progressed $200 million were provided by the Islamic Development Bank and $400 million by the Asian Development Bank. The project has now secured $2 billion in funding. To ensure transparency and accountability, leading audit firms from the private sector—Ernst & Young, KPMG and Price-waterhouse Coopers (PwC) have also joined as partners. The project’s financial management is under careful scrutiny,” says Khoja.

Many of the potential beneficiaries are frustrated by the slow pace of construction and distribution of cash grants. These setbacks have left many homeless families in limbo, struggling to rebuild their lives.

Zohaib, one of the beneficiaries of the housing scheme, says the project has faced delays due to the late release of funds leading to increased labour and raw material costs. He also says the scheme’s helpline frequently fails to register complaints. “The delays only add to the financial burden,” Zohaib says.

Several women beneficiaries The News on Sunday talked to expressed satisfaction with the progress of the housing project. Some said this had been the first time they had opened a bank account and owned land. The empowerment and the newfound financial independence have given them a sense of security. One of them says, “This is more than just a home. It’s about having control over our future.”

“After the devastation of the floods, I never imagined it would be possible to rebuild my home. With help from the SPHF, I now have an opportunity to construct the house again. Having a home in my name is something I had never dreamt of,” says Sakina Bibi, 60, of Shaheed Benazirabad.

The construction of houses on the massive scale underscores the government’s commitment to rehabilitating those rendered homeless by the floods. However, it is important that the financing burden should not overwhelm the beneficiaries and other citizens.

The author is a Karachi-based journalist. She tweets @ asifaidris