A spokesman of the Ministry of Finance has refuted the claim of Sindh Chief Minister Qaim Ali Shah that the federal government has not issued sovereign guarantee for Sind-Engro Power Project, to Chinese financiers for nearly two and half years.
The fact is that the government had agreed from the outset to issue the sovereign guarantee as soon as the Sindh Government agrees on giving a counter-guarantee, as the project is a public-private partnership between Sindh government and a private party (Engro).
The spokesman said that the Sindh government took a long time to agree to this condition and as soon as they consented, the Government of Pakistan approved the issuance of the sovereign guarantee after proper documentation.
This is therefore a settled matter. About a week ago, the spokesman said, the financiers approached the ministry for approval of terms of financing for the rupee portion ($500 million) and issuance of guarantee for foreign currency portion ($200 million), which are being processed for early approval in the Ministry.
The spokesman said that the federal government has not only agreed to issue the sovereign guarantee but has also constantly included the Thar Coal Power project among the early harvest projects under the CPEC. Despite this outstanding support, it is quite regretful that the Sindh chief minister has chosen unwarranted language against the federal government.
Regarding the releases for K-4 project, the spokesman stated that the Sindh government has not released any amount for this project so far. However, during 2014-15, against a budget estimate of Rs 200 million, the federal government had released Rs 2.2 billion for this scheme. For current fiscal year 2015-16, another Rs 500 million is budgeted. It is strange that the Sindh CM has disregarded both these facts, i.e. that his government has not expended any expenditure and that federal government has released such a large amount for the project, which he has not even acknowledged. Given the significance of this scheme for the residents of Karachi, the federal government assures the Sindh government that as much as they will spend on this scheme, the federal government will release matching grants.
The spokesman added there is no basis in the assertion that the prime minister had announced a package of Rs12 billion for fight against terrorism. Equally baseless is the claim that the Sindh government is fighting this war alone from its own resources. He said the prime minister had not announced any such package. More importantly, law and order is the responsibility of provincial governments and they are receiving a significant portion of national revenues for fulfilling such obligations. Yet, realising the gravity of the situation, Sindh Rangers, a part of federal civil armed forces, has been deployed in Karachi and is leading the war against terror. All expenses of this force are borne by the federal government, the spokesman concluded.
