Govt re-approves four projects due to 464% increase in cost

Total of 12 development schemes worth Rs279.5b approved

ISLAMABAD: The federal government approved on Monday a dozen development schemes at a total cost of Rs279.5 billion including four projects that were approved again due to escalation of up to 464% in their construction cost that highlights serious flaws in projects’ scrutiny process.

Headed by Finance Minister Ishaq Dar, the Executive Committee of National Economic Council (Ecnec) endorsed these schemes in the meeting that lasted hardly an hour, indicating the committee took, on an average, five minutes to approve each project. The original cost of four projects, which the Ecnec approved on Monday at an upward revised cost of Rs120 billion, was only Rs68.3 billion.

There was also thin presence of members in the meeting as the finance minister had called the meeting on Saturday in unusual haste. Ecnec is the highest project approval authority of the country having representation of federal and provincial governments.



The committee also set aside its previous two decisions to allow the federal government to provide funds for Punjab and Azad Jammu & Kashmir government road construction projects. Ecnec withdrew its earlier decision of securing funds from Punjab government for land acquisition of Tokhar Niaz Beg road project after the provincial government refused to allocate funds for the scheme.



Among the notable projects approved was construction of Peshawar Sustainable Bus Rapid Transit Corridor and Prime Minister’s Youth Skills Development Project.

The Ecnec approved the Peshawar metro bus at downward revised cost of Rs49.4 billion. The provincial government has obtained a $335 million loan from the Asian Development Bank (ADB) to complete the project in one year. As many as 450 air-conditioned buses will ply the 26-kilometre road that will serve about 500,000 passengers daily.

Koto hydropower projects of the Khyber-Pakhtunkhwa (K-P) government was also approved at an upward revised cost of Rs14 billion - up by 59% over the original cost approved in 2013. The provincial government had awarded the project to a Chinese company at 133% higher cost without seeking prior approval from Ecnec.

Ecnec chairman Dar noted that it was the second time in the last four years that he had granted ex-post facto approval of the project. Last time, Dar had given the ex-post facto approval of Neelum-Jhelum hydropower project.

The Ecnec also approved enhancing public-private partnership in Pakistan at a cost of Rs19.3 billion. The ADB will provide Rs12.5 billion loan for the project that will enhance Sindh government’s capacity to help complete development projects with private sector cooperation.

The Ecnec approved Integration of Health Services Delivery project of K-P government at a cost of Rs13.9 billion and establishing Children’s Hospital at Bahawalpur project at a total cost of Rs5.1 billion. South Korea will provide Rs3.5 billion loan at concessionary rates to construct 235 beds hospital.

The committee also sanctioned the PM’s Youth Skill Development Programme at a cost of Rs6.2 billion. The project aims at imparting training to 100,000 young people in fields of construction, energy, production, agriculture, information technology and mining.



The Ecnec endorsed 464% or Rs5.1 billion escalation in cost of Rathoa Haryam Bridge construction project in Mirpur, AJK. The Ecnec also set aside its earlier decision and approved to provide additional Rs2.3 billion to AJK government for meeting the extra cost.

The body also approved Karachi Neighbourhood Improvement project with a total cost of Rs10.3 billion including Rs9 billion World Bank loan. The Ecnec approved Rawalpindi-Islamabad Metro Bus project at a slightly downward revised cost of Rs44.56 billion. The project has already been completed about two years ago.

The highest project approval authority also sanctioned Improvement and widening the Jaglot-Skardu road construction project at an upward revised cost of Rs32.3 billion, which is 46% higher than the original cost approved in 2010. The Ecnec approved expansion of Thokar Niaz Beg project at a cost of Rs10.4 billion while also withdrawing its earlier decision to acquire land by obtaining funds from the Punjab government.

It approved Punjab Irrigated Agriculture Productivity Improvement Project at an upward revised cost of Rs67.5 billion. The new approved cost of the project is Rs31.5 billion or 88% higher than the original cost approved five years ago.

Published in The Express Tribune, July 11^th, 2017.

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