Senate panel concerned over diversion of flood rehabilitation funds in KP

A Senate committee on Tuesday raised concerns over how foreign loans and grants meant for flood rehabilitation in Khyber Pakhtunkhwa were being used, saying reconstruction work appeared to have been shifted to less-affected or unaffected areas for political reasons.

The issue came up before the Senate Standing Committee on Economic Affairs, which reviewed foreign-funded uplift projects with a particular focus on road, flood rehabilitation and irrigation schemes in KP. The meeting was chaired by Senator Saifullah Abro.

During the briefing, officials from KP’s Communication and Works Department outlined district road projects, flood rehabilitation efforts, externally funded infrastructure schemes and irrigation work supported by development partners. But senators questioned the criteria used to pick road schemes in flood-hit districts, saying there were clear disparities between the areas most damaged by floods and the projects actually carried out.

The committee noted that Mardan had received the largest number of road projects even though it was not among the worst-affected districts. By contrast, Upper Dir, Lower Dir and Chitral, which were described as severely affected, had comparatively fewer road projects. Senator Rubina Khalid said 16 roads had been built in Mardan, while only 12 kilometres of roads were constructed in Dir despite substantial flood damage.

Senator Hidayatullah also questioned why nine roads had been built in Peshawar, which he said had not suffered flood damage, and asked officials to explain the basis for selecting those schemes. Other members said reconstruction had not been carried out where it was genuinely needed, while projects were being executed in areas with little or no need.

The committee expressed concern that donor agencies may have been given a misleading picture of project priorities, leaving deserving areas without rehabilitation while work was diverted elsewhere. Senator Waqar Mehdi said similar concerns were relevant to other foreign-funded schemes as well.

Officials from the Ministry of Economic Affairs told the committee that once foreign loans were transferred to provinces, implementation and ownership became the responsibility of the provincial governments. They said the ministry continued to facilitate disbursement and help resolve bottlenecks when needed.

Senator Abro said it was troubling that Pakistan continued to accumulate external debt while resources were not being spent where they were most needed. He said delays in completion and poor utilisation were worsening the financial burden.

KP C&W officials said work on district road projects was moving quickly and that several schemes had reached full completion. They said projects were completed in Swat, Peshawar, Mardan and Nowshera, while work on 63 district road projects across the province was nearing completion. They added that the total length of district roads had reached 488 kilometres and that more than Rs10.9 billion had been spent on construction and rehabilitation.

The committee recommended that any province receiving grants or loans should have clear safeguards to ensure funds are used only for the purposes they were approved for.

The panel also reviewed a separate concern about alleged interference by the World Bank’s local representative in the Sindh Water and Agriculture Transformation Project. According to the official account of the meeting, Senator Abro said the lender could approve or reject financing, but should not dictate how a project is run. He said implementation was the responsibility of local authorities, while the lender’s role was limited to financing and recovery.

Officials told the committee that the project cost had doubled. Senator Abro said Sindh could save about Rs14 billion if unnecessary changes were resisted, and he referred to a similar issue involving the Peshawar-Torkham project and an amount of $890