PROGRESS ON INFRASTRUCTURE PROJECTS FOR SOUTH

C O N F I D E N T I A L SECTION 01 OF 03 ISLAMABAD 000307

SIPDIS

E.O. 12958: DECL: 02/08/2020
TAGS: EAID MOPS PGOV PK PREL
SUBJECT: PROGRESS ON INFRASTRUCTURE PROJECTS FOR SOUTH
WAZIRISTAN

REF: A. 09 ISLAMABAD 2963

B. 09 ISLAMABAD 2837

C. 09 PESHAWAR 218

D. 09 PESHAWAR 213

Classified By: Ambassador Anne W. Patterson for reasons 1.4 (b) and (d)
.

Summary
--------------


1. (C) In a January 28 meeting with U.S. Economic and
Development Assistance Coordinator Raphel, Army Director
General of Staff Duties Lt. General Zubair and Federally
Administered Tribal Area (FATA) Secretariat Director General
of Projects Fakre Alam reported on the progress toward
implementation of the U.S.-funded $55 million infrastructure
rehabilitation program for South Waziristan Agency. General
Zubair noted, as a sign of GOP commitment, that the Frontier
Works Organization had already deployed to the area and was
ready to begin work in a matter of days, even without advance
U.S. funding. Fakre Alam reported that the FATA Secretariat
now has the authority to approve projects costing up to 1
billion Pakistani rupees (USD $11,818,000 at 84 rupees/USD),
without going through the National Planning Commission Board.
Once the project planning documents are completed, USAID
will advance 15 percent of the cost on a project by project
basis. General Zubair reiterated his guarantee of access for
USG contractors who will monitor and evaluate the projects.
Border Coordinator Elizabeth Richard, USAID Director Bob
Wilson, and Khashayar Ghashghai also attended the meeting.
End Summary.

Pakistanis Moving Forward
--------------


2. (C) General Zubair told Ambassador Raphel, that survey
work was already underway in preparation of reconstruction
efforts ahead of the receipt of USG funding. He reported
that issues slowing the approval process were settled during
a meeting with the Prime Minister. He explained that the
Federally Administered Tribal Areas (FATA) Secretariat
selected the Frontier Works Organization (FWO),a para-statal
organization, to implement projects in the South Waziristan
Agency (SWA). To help organize FWO efforts, a "Field Fusion"
headquarters has been set up in DI Khan. The office is
staffed by three five-person consultant groups from Lahore
whose mission is to disseminate and coordinate information.
A FWO unit of some 612 soldiers/specialists stationed in
Quetta has moved to DI Khan to assist in building efforts.

FATA Secretariat's New Role
--------------


4. (C) FATA Secretariat Director General of Projects Fakre
Alam lauded Pakistani military support for simplifying the
PC1 approval process (the bureaucratic process through which
projects in Pakistan are approved),noting that multiple
steps in the process have been eliminated. He explained that
the FATA Secretariat now has the ability to approve projects
costing up to 1 billion Pakistani rupees (USD $11,818,000 at
84 rupees/USD) without referring to the National Planning
Commission and other federal offices. With the new cap for
project approval, reconstruction projects in the SWA are
being divided up into segments costing less than 1 billion
rupees to avoid lengthy delays in the Federal Government
project approval process.


5. (C) A project management unit (PMU) is being established
within the FATA Secretariat to monitor this and other
reconstruction projects. The funding for the PMU is coming
directly from a line item in the FATA Secretariat's budget.
Alam reported that a project manager from the North-West
Frontier Province (NWFP) Government Planning and Development
Ministry will be in place the first week of February with
further staffing to be hired by the end of February.

Reconstruction Status
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6. (C) The FWO has designs for the road, is completing
surveys, and will begin construction in the near future. The
first PC1, covering work between Sararogha and Jandola, is
expected to be completed by middle February.


7. (C) General Zubair's staff said that teams are currently
carrying out feasibility and political surveys for potential
dam sites. They stated that the surveys should be completed
the first week of February. Steps to assess electricity
needs are also under way. Two PC1s, one for the up-gradation
of the current electrical grid and one for the creation of a
new electrical grid, are in process.

Funding
--------------


8. (C) USAID Mission Director reiterated the USG commitment
to fund programs in South Waziristan, but explained that
before funds can be released, accounting and monitoring
systems needed to be put in place. Fakre Alam explained a
new multi-step system for setting up bank accounts for FATA
projects to receive USG funding. First, the FATA Secretariat
would request a new account from the Federal Ministry of
Finance. The Ministry of Finance would then pass on the
request to the Federal Controller of Accounts who would then
verify the request. Once verified, the Federal Controller of
Accounts would tell the State Bank of Pakistan to open a new
account. Each PC1 would go through this process and have its
own separate account.


9. (C) Ambassador Raphel verified that the advance amount of
funding would be 15% of each project's cost, and not 15% of
the total promised USG assistance. As previously agreed,
funds would be provided on a fixed reimbursement basis for
work that was agreed to in plans and confirmed by the USG.
General Zubair and his staff stated that they understood and
agreed.

Monitoring
--------------


10. (C) Ambassador Raphel also reemphasized the need for
direct USG monitoring and verification of work within South
Waziristan. She noted that USAID has hired a Pakistani firm,
Associates in Development (AID),to monitor projects in South
Waziristan. Fakre Alam reported that AID has already met
with the FWO. Both have agreed to a verification methodology,
and the FWO has retained the services of a retired Pakistani
Colonel to act as a liaison between the two. He also noted
that the signed fixed amount reimbursement agreement states
that work must be completed and then verified. General
Zubair said that ensuring USG access for monitoring was one
of their priorities.

Possible Causes for Delay
--------------


11. (C) When asked what could go wrong, General Zubair noted
three possible causes for delay: 1. a deterioration in
security; 2. technical problems; 3. a lack of cash flow.
Fakre Alam was concerned about the number of bureaucratic
hurdles that still needed to be overcome. He was
particularly concerned about the speed at which the federal
government assigned accounts and transferred money, stating
that this was an area that needed to be watched closely.
General Zubair, in response, asked to be informed if
something was wrong, implying he would address any issues
holding work up.

Comment
--------------


12. (C) All parties agreed that progress on initiating the
SWA reconstruction projects has moved unusually quickly. The
FATA Secretariat's ability to approve PC1s with price tags
less than 1 billion Pakistani rupees is a welcome development
that could serve as a useful precedent in other areas. While
there are sure to be some delays in the coming weeks, the
current pace of GOP action and the close cooperation between
the civilians and the military are encouraging. We will

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continue to review progress with all parties in an effort to
maintain this impressive momentum. End Comment.
PATTERSON