The government of Punjab has failed to utilize the $50 million World Bank Loan for Punjab Tourism for Economic Growth Project (PTEGP) as it has spent only 14 percent of the funds in 4 years (80 percent of the time of the project completion).
Irked by the delay in the execution of the project, the Planning Commission has asked the project sponsor to explain the delay in chronological order of events with full justification for each gap, official documents available with ProPakistani reveal.
The Punjab Tourism for Economic Growth Project (PTEGP) was supposed to be completed in 5 years (60 months). However, after the passage of 4 years (48 months), the progress is very slow, and only Rs. 1,195 million has been utilized, the documents reveal. The sponsors had approached the Planning commission to extend the deadline by further 17 months to 87 months, the documents reveal.
Punjab is procuring a World Bank loan of $50 Million (at a 3.2 percent interest rate) for Punjab Tourism for Economic Growth Project (PTEGP), the project has failed to make any major progress in the last four years. The Loan Grace Period is five years, with a maturity period of 24 years. The interest on the loan is 3.2 percent, while the commitment charges are 0.25 percent.
The World Bank loan for the project is quite expensive, the documents said. Out of the total cost of Rs. 8,525 million, an amount of Rs. 6,347 million is being spent on hard components like roads, public convenience facilities, and tourism-related infrastructure, while the remaining sum of Rs. 2,178 million will be spent on soft items like consultancies, capacity building, internships, institutional and regulatory review, media and outreach, etc. The project has so far utilized an amount of Rs. 1,195 million.
The project was accorded Concept Clearance by CDWP on 21 December 2015 for negotiating financing arrangements with the World Bank wherein it was observed that since the World Bank loan for the project is quite expensive, it should be used with utmost care for getting maximum economic, social, and financial benefits.
Then, the sponsors submitted PC-I costing Rs. 5,775 million, including Rs. 525 million Government of Punjab share. The project was recommended by CDWP to ECNEC on 09 June 2017. ECNEC, in its meeting held on 17 July 2017, approved the project. However, the cost of the project increased to Rs. 8,525 million ($55.0 million), including World Bank loan amounting to Rs. 7,750 million ($50.0 million), and the Government of Punjab share Rs. 775.000 million ($5.0 million).
The Planning Commission raised the observation to the revised PC-I and said that a very little amount had been spent during the last four years, and the pace of work has remained very slow. The sponsors have explained that the delay was caused by the non-finalization of the implementation mechanism and the hiring of a project team. However, these factors do not justify the delay of four years in the implementation of the project. The sponsors may explain the delay in chronological order of events with full justification for each gap.
The Planning Commission has further asked that the Project Management Unit in the original PC-I, the PTEG project be housed in Punjab Reform Management Program (PRMP), and the idea was resource sharing in vehicles, staff, and other necessary support. However, now, a full independent PMU-PTEGP will be established in the Planning and Development Board, Government of Punjab. Therefore, according to the sponsors, complete staff, vehicles, etc., are required.
The total cost of the PMU has gone up from Rs. 393 million to Rs. 570 million. The increase has occurred mainly due to the addition of vehicles amounting to Rs. 49.44 million and an increase in operational expenses from Rs. 15.638 million to Rs. 87.75 million.
The Planning Commission has questioned the number of staff and their salaries. It was observed that the total number of project staff had been increased from 14 to 35 persons. The monthly salaries of the project personnel in the officer cadre range from Rs. 700,000 for Project Director to Rs. 550,000 for Project Manager, Rs. 500,000 for Procurement Specialist, Rs. 400,000 each for Financial Management Specialist, Monitoring and Evaluation Specialist, Environment Specialist, Social Safeguard Specialist, and Tourism Specialist, Rs. 300,000 for Civil Engineer and Rs. 250,000 each for Digital Media and Communication Expert and Program Officer Admin and Accounts.
Moreover, the increase in operational expenses may also be justified. The project approved by CDWP, whose scope includes connectivity roads for improving access to and within the following tourism destinations and heritage sites: Gurdwara Nankana Sahib, Gurdwara Rori Sahib, Gurdwara Sacha Sauda, Katas Raj Temples, Lahore Museum, Mankiala Stupa, Taxila Museum, Bibi Jawindi, Darbar Khawaja Ghulam Fareed, Qila Kohna Qasim Bagh, Rohtas Fort, Badshahi Mosque and Taxila Buddhist Circuit.
The project will provide support for destination planning and identification of scalable investment, particularly for the private sector through Destination Investment and Management Plans (DIMP), Integrated Site Management Plans (ISMP), Museum Management Plans (MMP).
Other major components are tourism promotion, outreach, marketing, capacity building of relevant departments, training of ten thousand youth in tourism-related trades such as tour guide, tour operator, travel agent, interpreter, chef, cook, etc., public convenience facilities, and other tourism-related infrastructure such as restrooms, tourist facilitation centers, food, health/emergency facilities, etc. The existing legal, regulatory, and institutional frameworks will also be reviewed and updated for creating enabling environment for the private sector.