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Our correspondent, Tahir Dhindsa states that the World Bank proposed loan for railways privatisation dropped from the bank's lending programme for the coming years not as a result of a meeting alone that took place on Feb 14, 2000, at the Privatisation Commission, but was the culmination of a consultative process during which the bank suspended the idea of offering loan.

The fact of the matter is that some conditions attached to the loan were not acceptable.

The railways secretary, as well PR management, found the strings attached to $100 million loan against national interest. Secretary Javed Ashraf told this to a bank delegation in December-January. According to the secretary, the bank had proposed that out of $ 100 million, $ 30 million should be used for railways rehabilitation, $ 50 million for the golden hand-shake and $ 20 million as consultants' fee. And, the railways should be privatised right away.

Both these conditions were against the national interest, the secretary told Business Recorder on Thursday. Instead, he demanded that all $ 100 million should be given to the PR for its rehabilitation. "It was loan and not supplier's credit," which the secretary added," has to be paid back through the tax payers money."

On the second conditionality, the secretary said the railways should be offered for privatisation when it is fully functional and is in a reasonable shape.

"And in any case the infrastructure should be retained by the government," he said. The bank was informed about all three reservations of PR management.

The secretary said now the World Bank has sent a model for giving concessions on present infrastructure to the private parties.

"This will be replied to after we receive and study the proposal in detail," he concluded.