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KP govt saved Rs 5b per annum owing to premature retirement of federal loans

KP govt saved Rs 5b per annum owing to premature retirement of federal loans

PESHAWAR: The KP Government has allocated Rs 8.637billion for debt servicing in year 2015-16 in order to prematurely retire federal loans and foreign exchange loans, said an official paper.

Realizing the heavy debt servicing liabilities on the provincial budget, the KP Government has decided as part of its debt management strategy to retire expensive loans of the federal government.

The KP Govt started repayment of the expensive federal loans from financial year 2002-03 and as such Rs 22.374billion has been repaid prematurely to the federal government up to 2013-14 financial year.

As result of this premature retirement of the federal loans, the KP Govt has made saving of Rs 5.125b per annum since 2002-03 to 2013-14.

The outstanding liability on account of foreign loans against the KP Govt is Rs 87.401billion as on first July 2015.

The confirmation of outstanding balances of a number of foreign loans is under verification between the federal and provincial govts as the disbursement under these loans are ongoing to the projects executed agencies. The outstanding balance disbursed up to June 30, 2015 is Rs 28.686billion against allocated share of the KP.

The outstanding debt liability of the provincial government on account of federal loans is Rs 5.103billion as on July 1, 2015.