ISLAMABAD - Despite continuous outcry of media and various government and international organisations, the city managers continue to extend their unwavering support for a cryptic multibillion project of installation of light emitting diode (LED) lights across the federal capital.

Reliable sources informed TheNation that after Asian Development Bank’s refusal to fund Rs 6.5 billion project of replacement of traditional streetlights with the LED lights, now even the federal government has refused to provide Cash Development Loan (CDL) amounting to Rs 1.6 billion (approximately 25 per cent of the total cost of Rs 6.5 billion project) to CDA.

“The federal government has not accorded approval to CDA to move any summary to Ministry of Finance in this regard owing to paucity of funds,” informed an official, adding that Cabinet Division has also sought explanation from CDA over several alleged irregularities pointed out by the Transparency International Pakistan, Asian Development Bank and the Planning Commission of Pakistan.

The sources added that after federal government’s decision to not provide soft loan to CDA now city managers are left with no other option but to contribute its share of Rs 1.6 billion through its own resources.

Chairman CDA Engineer Farkhand Iqbal while talking to TheNation confirmed that as per new arrangements CDA will itself fund 25 per cent of the project. “Over the period of time now the Authority is in a position to fund its part of share in the project, while rest 75 per cent (Rs 4.8 billion) by obtaining export credit finance from Italy. Iqbal said that federal government does not have funds to provide cash development loan to the authority.

The firm Oslo, that has been given the contract of the project in a dubious manner, would arrange this loan that the Authority would clear within a period of 11 years.

On Thursday, Chairman CDA has also given a presentation to the Prime Minister Yousuf Raza Gilani over the project. “As the minutes of the meeting are yet to be approved, so I can’t tell you about the outcome and decision of this presentation,” Chairman CDA said.

Chairman Prime Minister’s Task Force on CDA Faisal Sakhi Butt was also present on the occasion. Faisal Butt, a close aide of Prime Minister, has managed to get arranged this meeting where PM okayed the project, the sources said.

It was the Chairman CDA who, in near past, was of the view that CDA does not have funds to pay monthly salaries to its employees and that how CDA could arrange Rs 1.6 billion for the project, but today after federal government’s refusal the situation is otherwise.

“Today, CDA is in a position to invest its part of Rs6.5 billion, and it is because of my dynamic chairmanship,” Iqbal proudly said. Responding a question regarding Cabinet Division’s letter to CDA, he said, “Cabinet Division has directed CDA to give presentation regarding the project and we did so by giving presentation to the Prime Minister.”

The chairman said now authority was waiting for go-ahead signal from Economic Affairs Division as project involves foreign loan component amounting to Rs 4.8 billion.

The CDA has already issued Letter of Intent (LoI) to firm M/s Oslo for Rs 6524.45 million project. As per arrangements CDA would pledge it immovable property and Blue Area’s identified property with the lending institution - that would provide Rs 4.9 billion (75 per cent) of the total cost of the project.

Planning Commission has already returned the PC-I document of the project saying the unit price of LED light is very high and that economic/financial rate of return of the project is not favourable. While Asian Development Bank has also raised several objections before rejecting this project.

The CDA committee that had evaluated the finical bid of M/s Oslo has also objected the quotation of rates by the firm in foreign currency, saying the practice would result in payment of additional sum in shape of fluctuation in the exchange rate when CDA would payback the loan.