US contractors to get large share of aid bill
Pakistan will receive only about $1 billion under the Kerry-Lugar Act in the first year because a large portion of the earmarked $1.5 billion is likely to be used to meet intermediary expenditures.
Finance ministry officials said most of the disbursement during 2010, the first year of the five-year aid package, would be made through contractors approved by the US government.
“The intermediary costs of these contractors are between 40 and 60 per cent of the total cost,” an official said, adding that they include consultancy costs, insurance and other implementation expenditures.
The official said it was the policy of the US administration and other donors to implement projects through their contractors to ensure transparency. Minister of State for Finance Hina Rabbani Khar confirmed that development projects of only $500 million would be implemented through the official machinery during the year.
Khar said the disbursements would increase by up to 50 per cent from the second year.
“Besides, the bill would help develop our monitoring and audit systems,” she said, adding that it would also help in clearance of other bills.
Opposition parliamentarians have criticised the government for accepting the aid bill.
“The amount was already inadequate and the western consultants and contractors would take millions of dollars because their charges are higher than those of local consultants,” said MNA Hanif Abbasi of the Pakistan Muslim League-N. The overall amount, he said, was just peanuts keeping in view what the people of Pakistan had suffered in the American war.
He said it would be unlikely that the bill's benefit would trickle down to the masses. It would only benefit influential people, he said.