Projects being delayed: Economic decision-makers shuffle files back and forth

Cost of projects also rises as ministry blocks release of funds.


Shahbaz Rana September 12, 2012

ISLAMABAD:


Hundreds of mega projects are facing delays resulting in cost overruns as files seeking required funds roll back and forth between the Finance ministry and Planning Commission (PC) because of the ministry’s persistent refusal to allow the commission to release funds.


The tussle between the ministry and PC over authority to release the funds is also sending the cost of projects higher and adversely affecting their timely completion, say officials.

At present, the PC cannot provide funds of more than Rs50 million for projects and has to seek the ministry’s nod.

“Mostly files remain stuck at the finance ministry,” said Ishfaqullah Khan, the PC spokesperson. Though the ministry recently allowed the PC to release funds up to the limit of Rs50 million, before that requests for small sums of money also needed to be sent to the ministry, he said.

Owing to the cumbersome process, Khan said, the PC’s drive to complete 191 projects by June 2013 had been greatly hampered. Of these, 81 projects were expected to be completed in the next three months.

After becoming prime minister, Raja Pervez Ashraf had asked the PC to complete those projects on priority where 80% or more work had already been done. The PC has earmarked 191 projects that can be completed in the next nine months provided funds are doled out without considering constraints and limits.

According to the ways and means limit imposed by the finance ministry, in the first two quarters of the current fiscal year more than 20% of the allocated funds cannot be released in each quarter and this ceiling goes up to 30% for the next two quarters. However, this condition slows down work on projects which are close to completion and need more and swift financing.

Following the premier’s directives to focus more on near-completion schemes, Secretary Planning Javed Malik is clearing files within three working days, but most of the files then get stuck in the finance ministry.

The secretary has also cleared Rs378 million for the Peshawar Northern Bypass project in an attempt to step up and complete the work, but the project file has not been cleared by the ministry.

However, officials say the finance ministry is not willing to waive the condition under which it exercises control over development budget. The matter has been discussed time and again among the finance minister, deputy chairman of Planning Commission and secretaries of both divisions.

When approached, the finance ministry’s spokesman was not available for comments. Despite enjoying absolute authority over release of funds, the ministry ended up providing Rs14 billion more than the allocated development budget in the last fiscal year, apparently giving in to political pressure. During the year, the government cut the budget for normal schemes and allocated money to projects initiated under the directives of then prime minister Yousaf Raza Gilani.

The issue of release of funds also echoed in a recent meeting of the Public Accounts Committee (PAC). The secretary planning told PAC that “the instrument like ways and means is not an ordinary one and should not be imposed without the cabinet approval.”

He said he was a federal secretary like the secretary finance and his decisions should be trusted, adding his decisions were subject to the finance ministry’s clearance.

Published in The Express Tribune, September 13th, 2012.

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