Did the World Bank fund Karachi’s nullah evictions?

 $100m SWEEP project in hot water

Buildings along a nullah in Liaquatabad being demolished to widen the waterway ahead of the monsoons in Karachi, March 18, 

2021. Photo: Online/Sabir Mazhar

There are two little stories about international donors that everyone who lives in Karachi should 
know.   

In 1994, the World Bank gave the Sindh government a roadmap to privatise Karachi’s water supply. It 
shortlisted international utility companies as possible private operators. They were International Water, 
Thames Water, Severn Trent Water, Générale des Eaux, Lyonnaise des Eaux and Enron. The KW&SB 
trade unions and civil society challenged the privatisation in court by 1999 and the entire process was 
frozen. The Sindh government formed a committee to look into the matter. It discovered that given the 
change of mood in the city, eventually even the World Bank lost its appetite.

The second story takes place in 1997. The Asian Development Bank wanted to loan Karachi 70 million 
dollars for a $100 million Landhi Korangi Sewerage Project. The Orangi Pilot Project team, including 
Arif Hasan and Perween Rahman, were left scratching their heads at how big the loan was. They sat 
down and took apart the numbers. When they finished, they discovered, and told the Sindh government, 
that the same work could be done in $20 million—one-fifth the cost. No foreign loan was needed. The 
Sindh governor cancelled the project in 1999.

The World Bank stayed away from Karachi’s main issues for roughly twenty years (aside from a 
few port projects, see list at the end).

Nagan Chowrangi after 150mm fell, flooding North Karachi. PHOTO: ONLINE/Sabir Mazhar

The return of the donor dollar

When it returned in 2017, the Sindh government started to sign up for loans for

– Karachi Neighborhood Improvement Project (KNIP)

– Competitive and Livable City of Karachi Project (CLICK)

– Karachi Mobility Project (KMP)

– Karachi Water and Sewerage Services Improvement Project (KWSSIP)

– Solid Waste Emergency and Efficiency Project (SWEEP)

– Second Karachi Water and Sewerage Services Improvement Project (KWSSIP 2)

Today we are $1,078,000,000 in debt to it.

Ironically, just like in 1999, the World Bank is distancing itself from what is happening with one of its 
projects: SWEEP or the Solid Waste Emergency and Efficiency Project.

Heavy monsoon rains triggered floods in Karachi on August 31, 2020. AFP

In a nutshell, urban flooding last monsoon propelled the government to start cleaning the city’s nullahs 
which drain rainwater away into the sea. Because these waterways are clogged, silted up and hemmed 
in by houses on both sides, their paths have to be cleared.

In November the scrapers appeared in Manzoor Colony at the Mehmoodabad nullah where a riot broke 
out. The administration abandoned the nullah widening and cleaning. NED University experts were 
brought in to map and survey “encroachments”. The demolition squads returned in January. Hundreds 
of houses were marked to be torn down. Civil society protests erupted. As people learnt that thousands 
of houses along Orangi and Gujjar nullah were next, the panic grew.

In January, over 250 concrete houses were razed at Manzoor colony. In February, work started at the 
other two drains. An estimated 3,000 structures at Gujjar and over 2,000 at Orangi are on the lists. The 
official line is that KMC is executing the plan with the help of district administrations.

The first installment of compensation to the families is Rs90,000 for six months based on an average 
of Rs15,000 in monthly rent. The total compensation is Rs360,000 for two years.

The retroactive financing mystery

SAMAA Digital acquired a copy of a letter that WB Country Director Najy Benhassine sent Chief 
Minister Murad Ali Shah on April 9 as a follow-up on one of their meetings. He referred to their 
discussion on the ongoing anti-encroachment drive and the government’s “plan to have a framework 
to guide development and equitable resettlement, and the implications for the World Bank’s continued 
engagement in projects in Karachi”.

They agreed that the framework to resettle and rehabilitate the people evicted by the nullah cleaning 
would be made in consultation with stakeholders, particularly those affected, and their representative 
organizations. That framework would be shared with the Sindh Cabinet by April 30 so it could be 
implemented by May 15.

“It was also discussed that under the SWEEP project, retroactive financing would only be possible if 
World Bank’s social and environmental standards are met, as stated in the project’s legal agreements,” 
Benhassine wrote. “In the absence of a Resettlement and Rehabilitation framework, future financing 
for cleanup of nullahs that are not affected by ongoing anti encroachment drive will not be an option 
under SWEEP.”

Benhassine concluded by saying that a senior mission would visit Karachi in the next two weeks.
The World Bank is now saying that demolition along the stormwater drains is not in any way related to 
or financed by any “WB-supported projects”. It is saying that SWEEP was approved in December and 
only became effective in March, so by that measure it was nowhere near the anti-encroachment 
operations.

The problem is that the people who have lost their homes and have nowhere to go have written the 
WB asking for answers. They have loosely organised as the Karachi NGOs Joint Action Committee 
and Karachi Bachao Tehreek.

They said they wanted proper resettlement and compensation and that the government had no proper 
plan. They told the bank that the Sindh government was using the WB’s name when demolishing their 
homes. 

They were told that the WB had nothing to do with what was happening and that the bank did not 
support it either. In fact, WB-supported projects will be prohibited from financing any future investment 
on the affected nullahs.

Photos: Zara Khan, resident and activist at Gujjar nullah

SWEEP’s Project Director Zubair Channa told SAMAA Digital, for his part, as well that there was no 
connection. “Not even a single penny of SWEEP is being used on the current anti-encroachment drives 
on nullahs,” he said. “We have not initiated the project yet.”

He said the World Bank had just asked them to open a bank account a few days ago and the funds had 
not even been transferred yet. Channa, who is also the MD of the Sindh Solid Waste Management 
Board, said they had pointed out encroachments during a meeting after last year’s monsoon rains.

Photo: SAMAA Digital

“It was decided at a Provincial Coordination & Implementation Committee meeting, last year that the 
encroachments over stormwater drains would be removed,” he said. 

KMC senior officer Masood Alam added also that the WB had nothing to do with the work. It is being 
supervised by the National Disaster Management Authority, which pays the Sindh government to 
execute the anti-encroachment operation. He was not able to specify how much money. 

A high-ranking government officer who worked on WB projects was able to tell SAMAA Digital that 
last year the nullah cleaning took around Rs280 million.

And what Zubair Channa is saying is true, except it isn’t the whole truth.

Photos: Zara Khan, resident and activist at Gujjar nullah

“SWEEP’s money has not been released yet by the bank,” said the high-ranking officer who worked 
on the WB projects. The project was indeed finalized and signed much later, on February 25, 2021. 
But: “Last year the nullah desilting and cleaning was done under SWEEP—it was decided that the 
government would provide the funds as the project was under discussion and later the funds would 
be reimbursed.” This method is called bridge-financing.

But this year, the WB backtracked over reimbursing the Sindh government over social concerns. 
“The bank is pissed off with the anti-encroachment drives,” said the officer.

If this is indeed true, it would explain why Benhassine used the words “retroactive financing” in his 
letter to the CM. Just to recall the exact words from his letter to the CM: “It was also discussed that 
under the SWEEP project, retroactive financing would only be possible if World Bank’s social and 
environmental standards are met, as stated in the project’s legal agreements.” (Our italics)

NEDUET’s projected flooding scenarios for rain in 3hrs at the Mehmoodabad nullah.

If Benhassine is referring to his discussion with the CM on “retroactive financing” we can assume 
that the Sindh government asked for it or the WB had offered it. This would be a large sum of money,
 running into the millions of dollars (SWEEP is $100m itself). It is hard to believe a government 
would ask to be reimbursed such a large sum out of the blue unless there had been some prior 
understanding with the donor.  

A 1975 topographic map of Karachi by the Survey of Pakistan showing Manzoor Colony and how Shaheed-e-Millat road cut 

off the river. Courtesy: Sumaira Zafar

So we asked the bank…

For what it is worth, SAMAA Digital put these questions to the World Bank. Had it agreed to bridge 
financing and backed out? “This is not correct,” the bank responded through its External Affairs 
Officer Mariam Sara Altaf.

But she went on to convey in an email: “In view of high flooding risks anticipated before the monsoon 
season in 2020, SWEEP included potential funding under Component 1 for the Government of Sindh 
to finance emergency cleaning of solid waste from nullahs in 2020. The scope of eligible activities 
under this Component 1 was limited to cleaning of solid waste clogging nullahs, transportation of 
dredged material to a disposal site, development of a disposal facility for the dredged waste, and 
interventions to reduce public dumping of waste into nullahs. Eligible interventions do not include 
any removal of encroachments around nullahs.”

Photos: Zara Khan, resident and activist at Gujjar nullah

She added that to be eligible for “potential retroactive financing”, the emergency nullah cleaning had 
to be conducted during the 2020 monsoon season (July-September, 2020) only. No funding was 
available under SWEEP for nullah cleaning beyond 2020.

“Accordingly, none of the activities conducted by the Government of Sindh under any of the 2021 
anti-encroachment drives in the Gujjar nullah, or any other nullahs in Karachi, have been associated 
with, financed under, or conducted in anticipation of SWEEP.” 

SAMAA Digital asked if the bank’s policy on forced resettlement would apply to a borrower like the 
Sindh government in case of any action taken under SWEEP in which people are displaced. It said 
it did.

Map: Orangi Pilot Project RTI

“Yes. As is the case of all World Bank-financed projects, SWEEP was designed and will be implem
ented in accordance with the principles and requirements of the World Bank’s policies on involuntary 
resettlement,” Altaf wrote. This would seem like an admission of guilt, except that a study of the WB 
documents reveals that part of SWEEP involved displacing people—at Karachi’s landfill sites, which 
are part of the picture. So the bank can claim its involuntary resettlement was referring to this. 

Photos: Zara Khan, resident and activist at Gujjar nullah

The missing connection

A long standing critic of the World Bank, architect and town planner Arif Hasan doesn’t buy this 
rhetoric. He argues that the ongoing work at the nullahs are part of SWEEP. For him the connection 
is simple.

SWEEP is for cleaning the nullahs which cannot be done without removing encroachments (houses), 
he told SAMAA Digital. “It is on this basis that I say the removal of poor houses through the anti-
encroachment drives is a part of SWEEP,” he said. The authorities want KMC to do this dirty work 
of demolishing houses constructed on nullahs through anti-encroachment drives and then the nullahs 
have to be cleaned under SWEEP.

How are you supposed to clean drains without removing houses, he said. If you can’t then you have 
two options: either tell the Sindh government you’re taking the loan back since it is in violation of 
your policies or stop the project  until you have a proper resettlement framework.

Hasan said that before the demolition began, the authorities had surveyed the nullahs. He described 
these (NEDUET) satellite surveys as unreliable as they did not factor in surveys on the ground. He 
says that even if the WB wanted to have its policies followed it would not have had the right data. 
The NED survey of the nullahs and housing along them did not include household numbers. “One 
building would have six to seven families,” he said. “It didn’t include the number of stories, family 
size. You can’t have a rehabilitation policy based on this report.”

Empress Market demolition drive. SAMAA TV

He felt that if the bank respected its own rules and procedures it should cancel the loan to the Sindh 
government to remove garbage from the drains. “It is obvious that the WB will be a beneficiary in its 
SWEEP program from the activity being carried out on the nullahs,” he said.

He referred to the destruction caused in Saddar, which was also a World Bank project area for its 
Karachi Neighbourhood Improvement Project. “KNIP. What happened in the Saddar project area? 
Now you should say you won’t fund Saddar and take the loan back,” he said. The entire market and 
informal vendors around Empress Market were razed to the ground in that case.

But at the end of the day, the biggest elephant in the room, a concern overrides all others, is that you 
can desilt the nullahs but unless you ensure the exit points are clear, the water will still have nowhere 
to go. “Where will it go? Why have you not spoken about these things?” He is referring to the outfall 
in DHA, for example, where the Manzoor Colony-Mehmoodabad nullah ends. Its exit into the sea is 
choked. Why did SWEEP not address that?

Jekyll and Hyde WB and the cunning state

There is a lot of writing that criticises the World Bank. One useful study is by Shalini Randeria and 
Ciara Grunder The (Un)Making of Policy in the Shadow of the World Bank: Infrastructure Develop
ment, Urban Resettlement, and the Cunning State in India. And there is a book, Hypocrisy Trap: 
The World Bank and the Poverty of Reform by Catherine Weaver.

Weaver’s book is on the hypocrisy of the World Bank: the contradictions between its “organizational 
talk, decision, and action”. Take the example of its $225 million loan for dam in Uganda in 2001 
which violated numerous of the bank’s own policies: safeguards against the involuntary resettlement 
of indigenous peoples, adequate assessment of the potential environmental impact, disclosure of 
information, a proactive consultation with local “stakeholders” (i.e., the affected population). If you 
ask the people who live along Gujjar, Orangi and Manzoor colony nullahs, you’ll hear the same story: 
evictions, a lack of information sharing, no discussions with the people of the neighbourhood.

Weaver says that the Bank’s harshest critics see cases like these as showing the “Jekyll and Hyde 
character of the Bank”. It “preaches sustainable, participatory, and accountable development while, 
in practice, doing whatever is necessary to get big loans approved and out the door as quickly as 
possible.”

In this old OPP map you can see the Malir River branch off and form a little island marked Manzoor Colony. Image: 

City Press

Perhaps far worse than the hypocrisy that the World Bank is globally accused of, is the problem of the 
governments that it deals with. They are the ones, after all, who invite the bank in and take its loans. 
It is here that the work of Shalini Randeria and Ciara Grunder is helpful.

They studied one project: the Mumbai Urban Transport project. It involved four groups, the World 
Bank, the Mumbai Urban Transport Authority in the shape of the Maharashtra government, real estate 
developers and NGOs. They found that “a proliferation of policy actors leads to a dispersal of power 
and dilution of accountability”. People who suffered because of the project “seek in vain to hold the 
state and the World Bank accountable for problems of resettlement”. In the case of Karachi’s nullah 
cleaning exercise, the same is happening. This is why the Karachi Bachao Tehreek and JAC had to 
write the WB to ask why its name was being used during the demolition drive.

The World Bank and government had strategies to disavow responsibility for policies they decided 
together, Randeria and Grunder wrote. The World Bank took credit for the policy but not its implem-
entation. But most useful is their theory of the “cunning state” that makes it unaccountable to its 
citizens.

In Mumbai when people affected by the plan could not get their elected representatives to help, they 
went to court. The same is happening here in Karachi. In the Mumbai project, new highways and 
railway lines needed land from which people had to be removed.

The World Bank learned from its experience in the 1980s and 1990s with the Sardar Sarovar dam that 
displaced 200,000 people that it had to have a resettlement policy. The World Bank’s Operational 
Policy has to be followed by any borrower for a project that removes people. It says those people need 
to be consulted. Sally Falk Moore describes this as the command of aid conditionalities being couched 
in the language of contract. She called it the dance of the donor and the dependent state.

Farmers protesting the Sardar Sarovar Dam in India. Source: DailyO.in

In the Mumbai case, the government was at odds with the World Bank. The World Bank said that 
anyone evicted or displaced should be compensated. But the government did not want to help people 
who it saw as “illegal encroachers” on land. This is exactly what has played out at Karachi’s nullahs. 
The cunning state remains a central actor in selectively transposing neoliberal policies to the national 
terrain and capitalises on its perceived weakness in order to render itself unaccountable to its citizens.

As things stand, the Sindh government appears to have received the memo that the WB is not having 
anything to do with its nullah cleaning. On Thursday, a handout from CM House announced that 
the government would cough up the cash itself. There are 298 nullahs in seven districts of Karachi 
which would be cleaned starting May 17. This will cost Rs316 million, of which the DMCs would 
spend Rs119 million and the remaining amount Rs 197 million could have to come from the Sindh 
government.

The anti-encroachment drive will continue. Roughly 5,500 houses will be torn down.

Published in SAMAA By Sohail Rab Khan, Mahim Mehar May 06, 2021