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Demand-driven procedure for foreign aid planned

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ISLAMABAD: The government has taken appropriate measures for getting foreign assistance from international financial institutions on the basis of demand-driven and government-identified level and not by the donors-driven.
Sources in Planning Commission (PC) told Daily Times most of the donors proposed projects of their choice based on the studies undertaken by the consultants appointed by them. This practice needs to be restricted and the projects should be demand-driven. World Bank (WB) and Asian Development Bank (ADB) have already prepared 2-3 year lending programmes.
The WB programme contains in-built consultancies whereas the ADB has separate programme for consultancies. The consultancies are substantially higher and need to be properly examined. The projects included in the donors proposed lending programmes should be thoroughly scrutinised and approved by the competent forums before starting any further negotiations with these donors.
Only the projects which fall under economic framework as laid down in the long/medium term/annual plans and polices of the government should be sponsored for foreign assistance and that, too, only after the approval of their PC-I by the competent forum. Development projects should be identified by the sponsoring agencies strictly on need basis and the donors should not be allowed to determine the priorities of the country.
In case of a project where there is delay in the preparation/approval of PC-I and there is extreme urgency for exploring foreign assistance, concept clearance may be accorded by the Concept Clearance Committee of the Planning and Development Division. However, the process of Concept Clearance should be discouraged and considered on merit only in exceptional and unavoidable circumstances, the sources maintained. In case Concept Clearance is allowed it should only be valid for a period of 12 months during which time the approval of the project should be obtained from the competent forum.
The sponsoring agency while submitting the proposal for Concept Clearance should, therefore, state in the forwarding letter ‘the exceptional and unavoidable circumstances’ for concept clearance. Without this statement the proposal for Concept Clearance will be returned without any further examination in Planning and Development Division. It may be noted Concept Clearance is accorded only to explore the foreign assistance and on the basis of this, any kind of MoU/agreement/commitment letter etc cannot be signed by the Economic Affairs Division/Sponsoring Agency. Such agreement etc can only be signed after approval of PC-I/ PC-II by the competent forum and completing other procedural requirements.
In case where 25 percent or more of the total cost of the project is in foreign exchange or foreign assistance, the approving forum will be Central Development Working Party (CDWP)/Executive Committee of the National Economic Council (ECNEC) irrespective of the fact the total cost of the project falls within the sanctioning competence of DDWP/PDWP. Therefore, such projects could be sponsored for foreign assistance only after approval of PC-I/PC-II by the competent forum (i.e CDWP/ ECNEC). Projects involving less than 25 percent foreign exchange or foreign assistance of the total cost falling within the sanctioning competence of federal ministries/provincial governments may be sponsored for foreign assistance after approval of PC-I/ PC-II by the DDWP/PDWP.
The projects should not be initiated/negotiated by any federal/provincial agency without the approval of Planning and Development Division as the case may be, the sources claimed.

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