Report of the First 60 days (April, May 2008)
Government of Sindh

This document summarizes the performance and activities of the Government of Sindh, after Syed Qaim Ali Shah took over as Chief Minister of the Province on April 8, 2008.

Chief Minister Sindh Syed Qaim Ali Shah took oath on April 8, 2008 and the first batch of Cabinet took oath on April 11, 2008. In his First Formal Speech before the Assembly after taking vote of confidence, he highlighted the priorities of the new Government. These priority initiatives were taken from the PPP Manifesto, significant policy initiatives and promises made by Shaheeed Benazir Bhutto.

Improving Governance and Effectiveness of Sindh Government

This is a gigantic task and given the fact that state structures have weakened and mis-governance has crept in each and every component of Government functioning, hence it would require a very careful handling and containment. In order to set the direction right, following major steps have been taken:
• Cancellation of all Contractual re-employment of retired government employees who were working on extension subsequent to retirement in accordance with a unanimous Cabinet Decision
• Cancellation of all postings to higher grades on “Own Pay Scales” (OPS) basis for streamlining postings in accordance with grades. An exception was considered for DCOs and Senior Police positions in lieu of shortage of officers in higher grades. This was also approved by Sindh Cabinet.
• Services Department has been assigned to get compliance of these orders and while there are still a few anomalies at least the ealier general trend has been contained to a great extent.
• Sindh Public Services Commission has been re-constituted.. The Commission has already initiated the process of recruitment in line with the Government Policy.
• In contrast to the past practices when the powers were mostly concentrated in the office of the Chief Minister, empowerment has been made to Ministers and other officials in order to enhance the efficiency and speed of decision making.

Employment situation in Sindh

Although employment in the public sector will not be able to eradicate unemployment, and the answer for addressing employment issue lies in expanding our manufacturing and services sectors in the private sector, this problem has been compounded by not filling significant number of vacancies in the past decade or so in the government. There are approximately 50,000 posts vacant in different departments of the provincial government and we are creating nearly 8,000 new jobs in Police, and other departments in 2008-09. The government will initiate filling these vacancies immediately after the budget.

Ban on employment in government has been lifted, posts have been advertised & interviews held for grades 1 to 9 in education, health, population welfare departments. Interviews will be held for jobs in other departments shortly.

Law & Order
In terms of governance, the most important factor was strengthening the effectiveness of Police for moving towards a more robust security environment. For this purpose, the peoples government has already made changes in the top hierarchy of officials in line with policy of putting right people on the right jobs. The postings of people of good reputation with respect to integrity and competence, especially in Karachi have created good impact.
Government is in the process of providing necessary resources and training to enhance the effectiveness of police. For this, a series of meetings have been held with the Home Department and Police. Their requirements on account of additional workforce, armaments, vehicles, POL; security systems etc. have been accommodated to a large extent by providing at least Rs. 2.5 billion over and above normal outlays. Sindh Government has also support from the Federal Government in this regard.

Wheat Crisis

On the subject of wheat prices, it may be recalled that wheat prices were raised on the request of Government of Sindh and it was on the orders of the Co Chairman that borders were sealed for stopping wheat smuggling. We have consistently held meetings and under the supervision of Minister Food almost 86% of Wheat procurement has been achieved.

Progress on Government’s Major New Initiatives
Benazir Bhutto Shaheed Youth Development Program
As announced in his very first speech by the Chief Minister in Sindh Assembly, the Government of Sindh is initiating a major skill development program dedicated to the promise of Great Leader, titled, “Benazir Bhutto Shaheed Youth Development Program”. This is an urgent relief measure both for Skill Development of poor educated youth in Sindh, who would not be able to find jobs in the market unless they are not equipped with appropriate skills. During their training, they will also be paid stipend ranging from Rs. 4000 to Rs. 7000.

While the program is targeted to provide training to 100,000 people, the government has already made preparations to implement this program with 61,000 educated and semi literate Youth in five departments in various trades and vocations as follows:

o over 40,000 matriculates and below will be trained in construction, and industrial skills for 3 to 12 months and then linked to job market
o Approximately 8000 youth will be trained in Agriculture, Livestock, Fisheries extension and other trades
o 3800 youth will be trained as paramedics and in midwife courses
o Around 7000 youth will be trained in IT and related fields.

Additionally, the education and some other departments are in process of designing similar programs. Government of Sindh is also in process of developing contacts with private sector organizations to develop a public private partnership for extending this program covering textiles, automotives and various other disciplines.

The Government has allocated Rs. 4 billion for this program under a separate Fund titled “Benazir Bhutto Shaheed Youth Development Fund”. GoS is also be seeking assistance of Federal Government for expanding this further. It will also request the business community to support this initiative through donations and also providing training in their organizations and will request Federal Government to provide necessary tax exemption for donations made to this Fund.

Establishing Sindh TEVTA

o In order to institutionalize Skill Development on a sustainable basis GoS is in the process of setting up Sindh Technical and Vocational Training Authority (Sindh TEVTA) for undertaking modern technical training in accordance with market demand so as to facilitate greater availability of skilled people in this province for their employment.

Low cost Housing For the Poor

A second major intervention will be providing Housing For the Poor. Under this program, GoS is planning to establish Low Cost Housing Schemes in all the District Headquarters of the Province in phases. This would be implemented in coordination with Federal Government’s Housing Program. Following decisions were taken in a meeting chaired by the Chief Minister Sindh on June 9, 2008.
o A Steering committee headed by the Chief Minister, with the Chief Secretary as Vice Chairman and heads of P&D, Finance, Local Govt, BOR, Development Authorities and chairmen of ABAD, URC and Saiban shall be notified to take policy decisions.
o DCOs shall personally visit the pieces of land already identified by the Cell at Karachi, Thatta, Larkana, Nawabshah and Khairpur Districts and confirm land availability and suitability within a week.
o Sindh Housing Authority will be established by the Steering Committee through an Act of Privincial Assembly. District Committees as desired by the Federal Govt. shall also be established early.
o A Peoples Housing Cell has already been set up under Mr. Zia ul Islam appointed as Special Assistant to CM for this Program and for CMIT.
o Rs. 2 billion allocated for a Revolving Fund and GoS would be seeking federal support for this program

Revitalization of Rural Economy

A third major intervention is towards, “Revitalization of Rural Economy and a Rural Reform Program”. This is a multi pronged program and it will be implemented with the support of Asian Development bank. It will have following major features:

o Distribution of state land to land less haris. For this Revenue Department has provided details of 2,12,864 acres of land in different districts’. Of this 1, 36,784 acres is Barrage land which can be distributed among the poor landless haris of the same Deh. A detailed implementation plan is under preparation. In order to ensure sustainable living for this segment of population, GoS is also evolving a support package which will include multiple interventions such as micro finance, subsizidized agricultural inputs, credit etc.

o An important component would be to enhance Agriculture productivity. With the steep rise in food commodity prices in the international market, this matter has achieved critical importance. GoS needs to take urgent steps for enhancing the productivity of agriculture not only to address current food crisis but also to reduce rural poverty, as 75% of the poor live in the rural areas connected with agriculture.

Following steps are envisaged:
o A task force comprising of people from private sector is being established to review the existing policy, strategy and investments so as to focus on interventions that give immediate gains.

o Two major interventions will be quickly improving extension services and facilitating availability of quality seed & research in agriculture.

o Investments in Livestock and Fisheries are being enhanced and focus is on raising productivity and evolving pro poor interventions

Fouth major intervention would be ‘Scaling-up availability of Micro Finance for Poor’. A detailed presentation was given by Mr. Shoaib Sultan Khan. The proposal envisages multiple interventions for various levels of poor at a UC level. The proposal is seemingly sound and can go a long way in reducing rural poverty. Chief Secretary Sindh has beenasked to examine the viability of this initiative. This could prove to be a major poverty alleviative initiative.

Strengthening Social Sector Investment and Improving Service Delivery
Health and Education Sectors will be a central priority area for the Government. Thorough discussions have been held and some of the major components of next year’s programs include:
i. “Health insurance for the poor”. Under this 100,000 poor households would be provided Health Insurance in the first phase. Funding has been provided, a committee has been formed and the, Peoples Primary Health Initiative Program has been assigned this task.

ii. The program of handing over RHCs and BHUs to Peoples Primary Health Initiative will be expanded for ensuring better services at BHU and RHC level.

iii. A provincial program for fighting Hepatitis has been finalized and included in ADP with a cost of Rs. 5 billion.

iv. Program for rehabilitation of all District Headquarter Hospitals and Taluka Hospitals has been approved.

v. Chandka Medical College is being upgraded to University Level and this would be Benazir Bhutto Shaheed Medical University. Draft Law has been prepared and very soon a technical feasibility would be prepared and the relevant law will be passed by the Assembly.

Education sector
Chief Minister Sindh has taken a detailed briefing on Education and two sessions with the World Bank staff including the World Bank Vice President, Mr. Praful Patel have been held. GoS stands deeply committed to Education and we strongly believe that without turning around the Public Sector Education system we will not be able to secure the future of Sindh’s children. GoS has made the following commitments to the World Bank, which are consistent with its commitment to secure the future of Sindh:.

• While very high levels of investments are needed but then GoS has to improve governance including overall Education Management. Towards this GoS stands committed to hiring teachers on merit, improving teacher training programs; creating separate Management Cadres; drastically improving examination system etc. so as to bring in better access and quality of education.
? A hefty amount is being allocated for Education Reforms including Free Textbooks; Stipends for Girl Students; Funds for SMCs, a big School Rehabilitation portfolio; Support to low cost private schools

? 3 Engineering Colleges and one College for arts and Design and an Institute of Business Administration will be set in different cities of Sindh

? The Education City Project of Karachi is being examined and after scrutiny GoS has decided to make a dedicated Education City Authority for undertaking outer development works for facilitating an enclave of high standards. This place is expected to house many institutions of higher learning and Health and will trigger tremendous amount of economic activity and job creation.
Urban Revitalization & Development of Karachi
Without working on the matter of Urban Revitalization and Upg-radation of atleast major Cities of Sindh, Sindh’s prosperity and prospects of investment will remain weak. Karachi is definitely the major economic growth engine not only for Sindh but the country as a whole. Government of Sindh would continue to accord priority to Karachi both for infrastructure as well as strengthening of Institutions.

? The existing Mega City Development Program (US $ 800 m) is being Up- Scaled and this would now specifically attend to Transport Sector. New strategy is to go for Mass Transit such as Light Rail that can provide solutions to traffic congestions for next few decades. GoS has agreed to change program design and to scale it up to a few billion dollars against existing 800 million dollars. The matter has to be further discussed with coalition partners and with Asian Development Bank.
? GoS is allocating Rs. 2 billion package for Karachi package.

? Towards Urban Development, Larkana, the city of late leader Shaheed Benazir will receive high priority. Federal Government has committed Rs. 5 billion package and the Government of Sindh has allocated Rs. 2 billion for Larkana Development.

? With the support of Asian Development Bank, GoS is embarking upon a Sindh Cities Development Program. This program involves institutional reforms , which will first be piloted in northern Sindh and then expanded to other Cities in central and South region

Facilitating Investment and Growth
For encouraging industrialization, Government intends to undertake following urgent steps:

? Revitalization of Sukkur and Kotri SITEs. This will be done by adopting the Sundar Model of industrialization where Management and Development companies be formed for improving infrastructure and taking care of maintenance of these estates. Special allocations have been made

? New Industrial Estates such as; Mineral City at Sonda; China City near Northern By Pass; Agro-Based Industrial Estates in north Sindh have been submitted to Federal Government for placing in Pak China Development Program

? Similarly Projects for Bridges over Indus from Nawabshah junction also sent for inclusion in Pak China Program

Development of Coal Resources for power generation
Sindh has been blessed with huge natural resources. The resources in Thar are estimated at 175 billion tons, which is considered one of the largest coal reserves in the world, but unfortunately, despite acute power shortage and huge adverse impact of imported fuel on the country’s balance of payments, the previous governments failed to exploit this resource. Major projects for development of Thar Coal and Keti Bandar initiated by the previous PPP government under the leadership of Shaheed Benazir Bhutto in 1996 were also stalled by subsequent regimes.
Keeping in view the unprecedented shortage of power and escalating fuel prices, Thar Coal provides an excellent opportunity for establishing Coal based power projects. It is unfortunate that the previous government failed to announce appropriate up-front tariff and refused to allow meager tariff of 5.7 cents per kWh to a major Chinese company which offered to establish 600 MW power project on Thar Coal. Currently, the WAPDA is paying approximately 15 cents per kWh to existing power projects, and based on the Tariff approved for expansion project of Hubco, the estimated cost per kWh for the new power projects under development, based on current fuel prices would be over 18 cents. Based on our estimates, the Country is expected to pay additional opportunity cost of around US $ 1 billion per year due to delay in developing Thar Coal.
The Government of Sindh has already taken the initiative of inviting proposals for a joint venture on Thar Coal and based on the initial contacts, we are expecting an enthusiastic response from several reputed private sector groups. We have also received an offer from Sino Coal, the largest technical corporation in China, for technical collaboration.
Following steps are planned for development of Coal resources:
? Preparation of feasibilities for Thar and Sonda, with a cost of Rs. 360 m
? Development of Coal Mining through Public Private Partnership with a cost of Rs. 6 bn
? Establishment of Training Institute in Mechanized Mining in collaboration with some Foreign Institute at a cost of Rs. 600 m
? Introduction of Improved Mining in Small Scale Mining at a cost of Rs. 2.5 bn.

Fiscal Initiatives and a record Development Program
Government of Sindh, in order to meet the expectations of people, is embarking on a major development program. The Annual Development Program for the next year is being pitched at Rs. 67 billion, which will be nearly 35% more than the previous year.
In order to address some of the critical issues, following matters have been taken up with the Federal Government, which are expected to have significant impact on the provincial finances in the ensuing years.

• Distribution of Sales Tax on Services in accordance with law. It’s a provincial law and proceeds are being distributed on population basis rather than collection basis. Based on preliminary meeting with the Federal Finance Minister and Finance Secretary, Sindh’s position has been accepted in principle. Sindh was also able to convince the other three provinces in a recent meeting of the Finance Ministers that this tax be give back to the provinces.
• Cash Development Loans on Scarp Projects require major reconciliation as Rs. 20 billion booked against Sindh for which over Rs. 33 billion already paid as interest and repayment where as actual expenditure in Sindh as per WAPDA data is not more than Rs. 5 to Rs. 6 billion. In the meeting with the Federal Finance Minister and Finance Secretary, for the first time, the federal government has agreed for a reconciliation after the budget.