Govt decides to cut salaries of employees linked with CPEC

Decision to affect contractual staff who may face upto 33% pay cut

ISLAMABAD: The federal government has decided to cut salaries of contractual employees hired to execute various projects after the finance ministry refused to pay them as per their agreements.

The contractual employees of development projects may face up to a 33% cut, depending upon their salary packages. The decision has been taken at a time when the federal government is considering giving a 10% to 15% increase in salaries to its regular employees from next fiscal year 2017-18, starting from July.



The decision has been taken after Accountant General of Pakistan Revenue (AGPR) objected over fixing their salaries over and above the Standard Pay Package of 2009 for project staff, according to a notification of the Ministry of Finance that it issued to cut the salaries of China-Pakistan Economic Corridor (CPEC) project employees.

These affected contractual employees are getting salaries approved in the PC-I of the projects. But the AGPR does not recognise the PC-I approved salaries. The employees had been offered appointment letters on the basis of salaries mentioned and approved in the PC-Is.

However, the finance ministry may face a legal battle as these pay packages have been approved by the Central Development Working Party (CDWP), which is headed by Minister for Planning and by Executive Committee of National Economic Council (Ecnec), headed by the finance minister.

“The pay of the project staff should be made as per the Standard Pay Package 2009 and was revised from time to time and not on the basis of emoluments approved in the PC-I,” according to a notification issued by the Regulation Wing of Ministry of Finance. The notification has been issued to cut the salaries of the CPEC Project, which has been approved by this government to execute Chinese investments worth $46 billion.

In the notification, the Ministry of Finance endorsed the AGPR’s point of view, which believes that there should not be two different pay packages for project employees.

Taking it as a precedent, the administration of the Ministry of Planning has also decided to cut the salaries of the employees of other projects, which could affect thousands.

However, this has created serious issues for those employees who had accepted jobs on the basis of offer letters that mentioned salaries approved by the CDWP and Ecnec.

The 2009 Standard Pay Package salaries are very low compared with market rates. Even the PC- I approved salaries are significantly lower than market rates. In November 2016, the President of Pakistan approved a 20% ad-hoc increase in 2009 Pay Package. The 2016 revision came after a gap of about three and a half years, which suggested that the Standard Package is not revised on regular basis.

Officials of the AGPR told The Express Tribune that the government has already started implementing the decision. They said that in those cases where the government is giving extensions, the AGPR is sending downward revised salaries as per 2009 Standard Pay Package for project staff.



In new cases, the AGPR is sending downward revised salaries despite the PC-I offering higher salaries, said the officials.

Sources said that Planning Minister Ahsan Iqbal has referred the matter to Secretary Planning for immediate resolution. But usual bureaucratic hassles coupled with biases against contractual employees suggest that the matter may linger on for months. In his note, the planning minister has acknowledged that the Standard Pay Package of 2009 is not in line with market rates and should be made compatible with 2017 ground realities.

Although the PC-I pay packages are relatively better, the government still faces challenges to attract the best talent due to higher market salaries. This has already affected many projects, including CPEC.

The CPEC Secretariat is facing an acute shortage of human resource and expertise. There is no project director for CPEC for the last several months while many posts of specialists are also vacant. A Deputy Director level official is looking after the work of the CPEC Secretariat.

Published in The Express Tribune, May 6^th, 2017.

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