PM approves immediate Rs570m grant for Rawalpindi hospital

Contrary to rules, funds will be released in one go; PM Office official defends move

ISLAMABAD: In apparent violation of rules meant to ensure transparent use of taxpayers’ money, Prime Minister Shahid Khaqan Abbasi has issued directives to immediately release over half a billion rupees to upgrade a hospital in Rawalpindi.

The Prime Minister’s Office has approved Rs570 million in development grant for Cantonment General Hospital, Rawalpindi with immediate effect, according to official documents. He has called for giving the funds out of the Rs40 billion that the government has earmarked in the current fiscal year’s development programme for politically connected schemes.



The premier also directed the finance ministry to give an additional Rs230 million for meeting current expenditures for this year as well as for the next four years. He directed that Rs115 million “shall be released as a supplementary grant for meeting partial recurring costs during current fiscal year 2017-18.”

In a related development, the planning ministry instructed its wings to present all cases related to the prime minister’s directives on politically motivated schemes to Development Budget Adviser Asif Sheikh.

The Cantonment General Hospital project has not yet been approved by the Central Development Working Party (CDWP) - a competent forum for project approval. Owing to the urgency, the project is expected to be approved in the upcoming CDWP meeting slated for next week, said sources in the planning ministry.

“A one-time grant of Rs570 million shall be released immediately out of the block allocation of the PSDP (Public Sector Development Programme) 2017-18, Special Federal Development Programme,” said the PM Office in directives issued last month. The Rs40-billion of the special programme has so far been spent on road reconstruction and electricity and gas supply to the areas recommended by ruling party parliamentarians.

According to rules of the planning ministry and ways and means limits prescribed by the finance ministry, the full cost of a project cannot be released in one go.

PSDP allocations are spread over the entire project implementation period. As physical work progresses, the planning ministry authorises the release of funds accordingly.

As per the finance ministry’s instructions, only 20% of the annual approved budget can be released in first quarter of a fiscal year, 20% in the second quarter and the remaining 60% in the second half.

PC-I of the cantonment hospital project with the planning ministry showed that the project would be completed in two and a half years.

“Release of Rs570 million upfront means the cantonment hospital management can earn profit by placing funds in a bank account for the next two years,” apprehended a ministry official.

“Allocation of funds does not mean that formalities are not required to be met,” said an official of the PM Office while defending the orders.

He said directives for the release of funds were given to only facilitate approval of the project by the CDWP. “CDWP cannot consider a project that has no financial allocation,” he added.

The official revealed that a delegation of the cantonment hospital had met the prime minister recently and sought funds for development work and meeting current expenditures.

During the meeting, he said, the premier agreed to bear 50% costs of salaries and allowances for the next five years.

“PM’s directives are binding but we will meet all requirements before releasing the funds,” said Planning Ministry Secretary Shoaib Siddiqui while talking to The Express Tribune.

To a question about violation of quarterly fund release limits, the secretary said complying with the ways and means limits was the responsibility of the finance ministry.

PM directives

Meanwhile, the planning secretary has issued a warning to his officers, saying he will initiate disciplinary action against them if they failed to send cases related to PM’s directives to the development budget adviser, showed the documents.



The adviser is facing a court case over allegedly illegally continuing to hold the office at the age of 70.

He took the step after the Public Investment Programming (PIP) wing of the ministry insisted that all procedural requirements should be met before releasing funds for the schemes ordered by the prime minister, according to the sources.

The secretary defended the decision, arguing that he had only asked the PIP wing to continue the old practice. “PIP will still process all the PM directives and I have only asked the wing to keep the adviser in the loop,” he said.

Published in The Express Tribune, March 13^th, 2018.

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