Over 1,000 projects face delays and cost overruns: PAC

Federally-funded schemes worth Rs7.9tr behind schedule due to ill-planning, carelessness


Shahbaz Rana October 25, 2017
Leader of Opposition in the National Assembly Khursheed Shah. PHOTO: PID

ISLAMABAD: The Public Accounts Committee (PAC) on Tuesday observed that completion of over a 1,000 federally-funded schemes worth Rs7.9 trillion was delayed due to flaws in their planning and execution as well as carelessness of the ministries concerned.

These 1,022 schemes would remain a constant source of bleeding as the ill-planning on part of the concerned agencies had resulted in delays and cost overruns that in some cases swelled to many times more than the original cost of the projects.

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Also, the schemes could not be fully funded due to scarcity of resources.

The total cost of the schemes was Rs7.9 trillion, Rs2.231 trillion of which had already been spent. The planning ministry needed another Rs5.7 trillion to complete the work as against Rs1 trillion allocated this year.

“The country’s planning process has failed, which has led to a situation where completion of projects has been delayed for years and their cost has massively soared,” said Syed Khursheed Shah, the Chairman of PAC.

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He chaired about a three-hour-long session on the current status of the projects.

The planning ministry did not diligently play its due role in stopping initiation of new schemes despite scarcity of resources, observed Shah.

The proceedings also revealed that the Priorities Committee, which is managed by the Finance Ministry, also failed to perform its task effectively. The Priorities Committee meets a few weeks before the budget and sanctions finances for the development and current expenditure purposes.

The PAC had called all the federal secretaries for a holistic review of the federally-funded 1,022 schemes under the Public Sector Development Programme (PSDP).

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For completing the work on the projects, the planning ministry still needed Rs5.6 trillion more, including Rs4.4 trillion for ongoing schemes.

Work on some of the schemes had started in 1980s, which was still going on.

The committee’s proceedings once again put spotlight on the systemic failures, inefficiency of the bureaucracy and lack of financial resources, which led to a situation where the PSDP portfolio was now a complete mess.

The PAC’s decision to dig deeper into the PSDP helped the ministry to become more aware of the status of the projects and “we have now started performing the forgotten monitoring task more effectively”, said Secretary Planning Shoaib Siddiqui before the PAC.

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The secretary planning sided with the political leadership by defending it from the blame of massive increase in the PSDP size. He said that he “never faced political pressure to include a politically-motivated scheme in the PSDP”.

At present, 25% of the PSDP budget or Rs254 billion was allocated for special schemes and programmes, many of which were initiated on the directives of former prime minister Nawaz Sharif.

The PAC chairman also directed the planning ministry to devise a plan to expedite the work on schemes that were under implementation for years.

He also said efforts should be made to discourage inclusion of new schemes into the PSDP.

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The secretary planning said lack of resources was creating a problem in meeting the huge demand for more publically-funded projects.

He said the National Economic Council had approved a new policy in May this year making it compulsory to secure a minimum 25% funding before the approval of the project.

Shah observed that the planning ministry was violating that policy as new schemes worth billions of rupees were approved in the past couple of months.

Finance Secretary Shahid Mehmood said no exercise had been conducted to determine which schemes should be given priority for the next one to two years to reduce the backlog.

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“The approval process is so cumbersome that most of the intended benefit of the projects is lost till the time they are approved by the competent authorities,” observed Syed Naveed Qamar of the Pakistan Peoples Party.

The secretary planning said that the ministry had notified the new timelines that had greatly reduced the approval time.

Some case studies

The Greater Karachi Sewerage Plan, known as S-III, had been approved in October 2008 at a cost of Rs8 billion with a completion time period of four years. Nine years down the line, the project cost escalated to Rs39 billion and still the authorities needed 15 months more to complete the work.

Another extreme example was the project of construction of Nahqi Tunnel at Mohmand Agency, which began in December 2016 without approval of any authority. About 95% work had already been completed and the federal government had yet to approve it.

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The secretary planning said the project’s contract had been directly awarded to Frontier Works Organisation, adding that he did not have the information as to who had awarded the contract.

The Neelum-Jehlum Hydropower Project was yet another case of mismanagement. The project had started in 1989 at a cost of less than Rs15 billion. The work was still going on and the cost had already swelled to Rs404.3 billion, said Siddiqui.

There were also schemes that were victims of political affiliations. The PML-N government had put two projects of health and education sectors on the back burner only because they fell in the constituency of Sheikh Rashid. The PAC had to issue directives to the planning ministry to complete those schemes on priority basis.

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