PHOTO: TARIQ HASSAN/EXPRESS
LAHORE: The people are hoping their new prime minister will roll out high-profile projects that became his party's trademark in Punjab, but the nation's dire finances threaten the optimism.
The Pakistan Muslim League-N (PML-N) won huge popularity and a reputation for getting things done with a series of big-ticket schemes over the past five years in Punjab.
A metro bus system in Lahore - the first such scheme in the country's 65-year history - free laptops and solar energy panels for students and a network of high-quality schools in poor rural areas made Punjab the envy of Pakistan.
In the campaign for the May 11 general election, PML-N chief and now Prime Minister Nawaz Sharif and his younger brother Punjab Chief Minister Shahbaz Sharif, promised similar schemes for the whole country.
After five years of listless government under the Pakistan People's Party (PPP), voters responded to the promise of action and handed the party a majority.
In Lahore, the Metro Bus which opened in February has revolutionised travel around the city, a traffic-clogged mishmash of colonial-era buildings, cheap housing and newer, more upmarket suburbs.
The 27-station network of buses running on dedicated lanes and elevated roadways, run by a Turkish company and carrying 120,000 passengers a day, was built at a cost of $300 million.
Terminals offer a computerised fare system and commuters can use smart cards to avoid the hassle of queueing - a welcome use of technology in a bureaucratic land where paperwork, preferably in triplicate, is still king.
Hira Farhat, a pharmacy student at the University of Punjab, was delighted with the service.
"It's comfortable and quicker than other means of transport. It has cooling system and takes me to my university in 15 minutes. The government must start it in other cities also," she said.
The PML-N has promised to take the metro bus to Karachi and Islamabad.
Nawaz's first speech in his third term as PM last week was strong on talk of investment in infrastructure, particularly a road and rail network to link northern neighbour China to Gwadar, recently taken over by Beijing.
"All development projects will be completed before the completion of our five-years term so that people can get the fruits," said Nawaz.
But populist projects do not come cheap and Pakistan is in a dire financial predicament, with a fiscal deficit in 2012 of 8.5% of GDP and growth in 2013 forecast at 3.5% - half what economists say is needed to absorb the growing young population into the workforce.
More pressingly, foreign exchange reserves are dwindling, to just $6.6 billion in late May, or less than two months' export cover, down from $11.3 billion a year earlier.
The opposition in Punjab said the PML-N's flagship projects were marred by corruption and ran hugely overbudget, leaving other cities and districts under-resourced.
"The Punjab government crossed the initial estimates for Metro Bus and spent 70 billion rupees instead of 30 billion rupees," claimed Raja Riaz, former PPP opposition leader in Punjab.
"They cut the development funds of other cities for this one project and also diverted the finances of much more important departments like education and health."
Islamabad is due to repay the International Monetary Fund more than $4 billion by the end of 2014, putting further pressure on currency reserves, and many observers expect Pakistan to have to ask for another loan.
That would come with a host of tough conditions, including boosting Pakistan's wretched tax collection, which currently brings in less than 10% of GDP.
Nawaz has said he would welcome help from the likes of Turkey and China as he seeks to boost the economy, but analysts are warning the PML-N's projects could create extra burdens.
"These are good projects but at the same time the government should also be in the business of mobilising resources," said Ashfaq Hassan Khan, principal of the National University of Science and Technology Business School.
"If resources are not mobilised and yet we go for financing all these kinds of projects nationally, it will lead to a larger budget deficit and accumulation of more debt."
Economist Kaiser Bengali agreed, saying there was scope to improve existing infrastructure at much lower cost than beginning new schemes.
"For example, we have already a network of circular railway in Karachi and government can use it for better transportation of commuters instead of working on a new project," he told AFP.
"But our rulers go for new fancy projects and they want to spend money on new schemes."
COMMENTS (22)
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The reason our politicians especially the PML-N folks like to spend on Big projects is that it gives them access to more money that can be handed out to friends and family members through awarded contracts etc... Not to mention benefits of filling one's own pockets become endless as well. At the end of the day, they get rich and have a white elephant to show to the people and get votes for the next time. No wonder our Awaam keep thinking why are things not getting any better despite all these big projects etc... Our conditions will only improve when our scarce resources are used for the best interest of our people and not for one's own selfish and illusioned agenda.
World over they are building underground Metros. In Pakistan people going gaga over some Metro bus. lol.
@Falcon: Agreed, but even if the subsidy is withdrawn, it was estimated that the ticketing price would go upto 37 Rs. now 37 PKR for 27KM is around 1.30 PKR/KM is still pretty affordable given the facilities of Metero Bus Service. They can determine stop to stop and minimum rates based on this.
@ahmad: We have an active war going on within the borders of Pakistan in the FATA. Increasing the defence budget is a necessity and not based on the hogwash that you term "Khaki corruption".
When our troops are engaged in combat and we are taking casualties, how do you suppose the government would fund the care of the family members of the dead and the care of the wounded troops? How do you expect the government to fund the use of ammunition and the wear and tear on equipment?
All of the above costs money and if Pakistan is to survive as an "Islamic Republic" and not as the "Islamic emirate of the Taliban", such expenses are needed!
I think its very important for the Nawaz govt to realize that it is as important for the country what not to do as you plan what to do for the future due to limited finances available for the next five years. Lets not get into mega projects as we need to improve our railway tracks and run decent service by private companies. We do not need a brand new circular rail system in karachi and the existing one can be upgraded and used for the karachi population. Lets use the money on developing water dams and improving the energy crisis. I think its very important that Army should curtail it budget and all the strategic organizations should also help the govt in improving the overall situation by banning on purchasing new vehicles and other office expenses. I think, next two years will be important for Pakistan and every department of the state should cooperate in austerity measure taken by the new govt
@Xnain: While what you suggest seems like a good idea, giving off management to private parties might not help much since the pricing structure is determined by Govt. and is heavily subsidized as of now. That means, in the long run, unless fares are adjusted, this will lead to further bleeding of national exchequer rather than additional revenues. In a country marred by high levels of illiteracy and diseases, infrastructure projects should not be a high priority. Ideally, all the mega-project focus should be energy rather than physical infrastructure. $300 million spent on energy projects would have been much more beneficial to the economy than this metro-bus project.
All I want to know is when we will get the bullet train we were promised by PMLN before elections?
So Daimer Basha does not merit a mention when major infrastructure projects ! +++++++++++h++++++++++++++++++++++++++++++++++++++++++++++ Those who forget their projects suffer 20 hours Load shedding a day.
end terrorism ,reduce load shedding and improve employment first.then we can move onto the metro buses and highways
this was a project dealing with transport, firstly it depends on what the mega projects are for. if hte biggest priority is energy the assumption should be that most projects will be energy based. In that light it makes sense to have a secure energy system not by relying heavily on a few sources but diversifying as much as possible. This is to ensure that if there are any supply sides shocks it would not be a heavy burden on our energy usage. Then the policy should not be to have mega projects but many smaller projects to ensure that the jobs and investment is spread across the country.
To curb the deficit, initiate these projects under public private partnership and let the private partner manage it. If run efficiently, these projects may turn out to be the sources of non-tax revenues for the government. This would not only help in repaying the infrastructure costs but also easing the debt burden in the long run.
@Khan In case you did not notice, there are other cities in the province of Punjab apart from Lahore. With its crumbling health care system and schools and the lowest growth rate among the provinces, Punjab is far from being a model for other provinces.
As an Ex-pat I would have invested my savings in Pak if IK had been at the helm of affairs- and so would have millions of others overaseas pakistanis. I will now look at KP government to see what are their needs and what can they do for the OP!
@Khan: Are you really saying that? Punjab is a province and it has some 30+ cities and districts and he was reffering that other cities's scheme were stopped to push every penny in Metro project. Just think for a minute and then speak. :)
there seems to be no future of metro bus after the pmln because it is a heavy burden on the national exchequer.!!
Float Infrastructure Bonds.Provide tax concessions to these bonds. Build Infrastructure on BOT basis Infrastructure investment will create jobs and will have fall out benefits to a large number of Industries
we want that service in islamabad too plz plz start it in islamabad.
circular railway in Karachi? No way. That would never give any form of publicity which is desired.
To curb the deficit, initiate these projects under public private partnership and let the private partner manage it. If run efficiently, these projects may turn out to be the sources of non-tax revenues for the government. This would not only help in repaying the infrastructure costs but also easing the debt burden in the long run.
“They cut the development funds of other cities for this one project and also diverted the finances of much more important departments like education and health.”
What are you on about cut funding from other cities? Punjab is a province and it has its own budget. Just because the other provinces didn't invest in their own province don't find faults with Punjab. What happened to all the funding that was given to the other provinces????
Punjab is a role model for Pakistanis and inshallah this model will be rolled out to the other provinces.
increasing defence budget doesnt help either. This govt is planning to increase it 25%. It will go from 680 Billion to 850 Billion (1/3 of total budget). And for that we have terrorism, security issues,drones and khaki corruption.