Coordination committee meeting: Rs710b development budget recommended
Body wants to scrap 519 projects worth Rs1.3 trillion.
ISLAMABAD:
An important project finalisation committee on Friday recommended a Rs710 billion national development budget for the next year and proposed cancellation of 519 projects worth Rs1.3 trillion as financial crisis deepens, putting a question mark even on the recommended federal development spending.
The Annual Plan Coordination Committee (APCC), the second highest authority involved in project approvals, earmarked Rs270 billion for the federal development budget and Rs10 billion for the Earthquake Reconstruction and Rehabilitation Authority. Provinces informed the committee that they would like to spend Rs430 billion out of their resources on development projects in 2011-12.
The National Economic Council, the highest economic decision-making body headed by the prime minister, will give a final nod to the development programme on May 21.
In a meeting of APCC co-chaired by the deputy chairman of Planning Commission and finance minister, members dropped the Planning Commission’s recommendation for allocating Rs365 billion for federal projects. Contrary to this, APCC earmarked only Rs270 billion which was not enough to complete 743 projects that are at advanced stages of completion.
“Even there is no certainty that the Rs270 billion development budget will be fully released,” said Deputy Chairman Planning Commission Dr Nadeemul Haq. For the outgoing fiscal year, the government had allocated Rs280 billion for the development budget but after last summer floods it cut the figure to Rs180 billion.
Out of Rs270 billion, the government will borrow Rs38.5 billion from the international community to finance the projects, said Planning Commission’s PSDP Specialist Dr Asif Shaikh.
An amount of Rs162 billion has been proposed for federal ministries’ projects, Rs20 billion for parliamentarians’ development schemes, Rs28 billion for special areas and Rs70 billion for corporations’ schemes. The government has allocated Rs18 billion for purchasing land for Diamer-Bhasha Dam, Rs22 billion for the Atomic Energy Commission and Rs11 billion for the Neelum-Jhelum hydropower project.
The Planning Commission tabled 1,355 projects worth Rs2.5 trillion to add to next year’s Public Sector Development Programme. But APCC recommended only 836 schemes having total cost of Rs1.2 trillion. Final decision will be taken by NEC.
“We have worked on the Rs270 billion ceiling and schemes with less than 10 per cent expenses incurred will be slashed,” said Secretary Planning and Development Sohail Ahmad.
An official, who attended the meeting, told The Express Tribune that APCC decided that no new projects would be initiated unless approved by the Council of Common Interests, headed by the prime minister and comprises four provincial chief ministers.
The ministries demanded inclusion of 279 new schemes worth Rs429.4 billion in the development programme and sought allocation of Rs12.1 billion for next year, but APCC recommended scrapping all of them. The ministries will finalise their proposals by Sunday.
So far, the government has spent Rs12.5 billion on 312 projects costing Rs580.2 billion. The ministries demanded Rs21.1 billion for next year but APCC proposed dropping all these projects. This will result into a loss of Rs12.5 billion to the kitty but it will save at least Rs500 billion in the longer run, as according to the Planning Commission’s study cost overruns are double the original tags due to scarcity of resources and ill-planning.
Another 108 projects costing an estimated Rs313.4 billion are also under way. So far, the government has spent Rs48.5 billion, which is around 16 per cent of the total cost. The ministries sought Rs30.3 billion for next year but APCC asked them to consider these projects for scrapping in a bid to save resources for projects in advanced stages.
On top of these, there are 93 schemes worth an estimated Rs174.3 billion. The government has spent Rs42.4 billion on them and is not inclined to take them forward. But there is a possibility that these projects may find space in PSDP due to heavy spending as compared to the cost.
Published in The Express Tribune, May 14th, 2011.
An important project finalisation committee on Friday recommended a Rs710 billion national development budget for the next year and proposed cancellation of 519 projects worth Rs1.3 trillion as financial crisis deepens, putting a question mark even on the recommended federal development spending.
The Annual Plan Coordination Committee (APCC), the second highest authority involved in project approvals, earmarked Rs270 billion for the federal development budget and Rs10 billion for the Earthquake Reconstruction and Rehabilitation Authority. Provinces informed the committee that they would like to spend Rs430 billion out of their resources on development projects in 2011-12.
The National Economic Council, the highest economic decision-making body headed by the prime minister, will give a final nod to the development programme on May 21.
In a meeting of APCC co-chaired by the deputy chairman of Planning Commission and finance minister, members dropped the Planning Commission’s recommendation for allocating Rs365 billion for federal projects. Contrary to this, APCC earmarked only Rs270 billion which was not enough to complete 743 projects that are at advanced stages of completion.
“Even there is no certainty that the Rs270 billion development budget will be fully released,” said Deputy Chairman Planning Commission Dr Nadeemul Haq. For the outgoing fiscal year, the government had allocated Rs280 billion for the development budget but after last summer floods it cut the figure to Rs180 billion.
Out of Rs270 billion, the government will borrow Rs38.5 billion from the international community to finance the projects, said Planning Commission’s PSDP Specialist Dr Asif Shaikh.
An amount of Rs162 billion has been proposed for federal ministries’ projects, Rs20 billion for parliamentarians’ development schemes, Rs28 billion for special areas and Rs70 billion for corporations’ schemes. The government has allocated Rs18 billion for purchasing land for Diamer-Bhasha Dam, Rs22 billion for the Atomic Energy Commission and Rs11 billion for the Neelum-Jhelum hydropower project.
The Planning Commission tabled 1,355 projects worth Rs2.5 trillion to add to next year’s Public Sector Development Programme. But APCC recommended only 836 schemes having total cost of Rs1.2 trillion. Final decision will be taken by NEC.
“We have worked on the Rs270 billion ceiling and schemes with less than 10 per cent expenses incurred will be slashed,” said Secretary Planning and Development Sohail Ahmad.
An official, who attended the meeting, told The Express Tribune that APCC decided that no new projects would be initiated unless approved by the Council of Common Interests, headed by the prime minister and comprises four provincial chief ministers.
The ministries demanded inclusion of 279 new schemes worth Rs429.4 billion in the development programme and sought allocation of Rs12.1 billion for next year, but APCC recommended scrapping all of them. The ministries will finalise their proposals by Sunday.
So far, the government has spent Rs12.5 billion on 312 projects costing Rs580.2 billion. The ministries demanded Rs21.1 billion for next year but APCC proposed dropping all these projects. This will result into a loss of Rs12.5 billion to the kitty but it will save at least Rs500 billion in the longer run, as according to the Planning Commission’s study cost overruns are double the original tags due to scarcity of resources and ill-planning.
Another 108 projects costing an estimated Rs313.4 billion are also under way. So far, the government has spent Rs48.5 billion, which is around 16 per cent of the total cost. The ministries sought Rs30.3 billion for next year but APCC asked them to consider these projects for scrapping in a bid to save resources for projects in advanced stages.
On top of these, there are 93 schemes worth an estimated Rs174.3 billion. The government has spent Rs42.4 billion on them and is not inclined to take them forward. But there is a possibility that these projects may find space in PSDP due to heavy spending as compared to the cost.
Published in The Express Tribune, May 14th, 2011.