ISLAMABAD:
The government on Thursday approved 53 projects involving total investment of Rs478 billion and dismissed calls for slashing the development programme as the average project completion period has increased alarmingly to 21 years due to paucity of resources.
The Executive Committee of the National Economic Council (Ecnec) – the highest project approving authority – headed by Finance Minister Dr Abdul Hafeez Shaikh endorsed these projects. Of the total amount, the government will acquire Rs172 billion in foreign loans to finance the projects.
The government’s income is sufficient to meet only the non-development expenditure. To carry development work, it borrows from domestic sources and international lenders.
There are 1,853 projects in the Public Sector Development Programme costing an estimated Rs4.4 trillion, which is 33 per cent more than the total size of national and provincial budgets.
The Prime Minister’s Inspection Commission (PMIC) has recently sought the prime minister’s intervention for reprioritising over one-third of the development projects. “A number of unfeasible projects have been approved in the past,” finds PMIC.
For the next financial year, the Planning Commission has recommended a Rs365 billion development budget to complete ongoing projects but the finance ministry has allocated only Rs280 billion due to non-availability of resources.
PMIC observed during the inspection of the project that “contracts were not properly awarded and as a result the economy is losing more than Rs11.6 billion per annum in terms of foregone energy and irrigation benefits.”
The government has increased the length of the dam by 30 feet to regain lost storage capacity of 2.9 million acre feet of water. Total storage capacity is 8.8 million acre feet with power generation capacity of 1,120 megawatts. However, due to the dispute over resettlement of displaced people, no additional water could be stored, causing losses to the national kitty.
In the name of financial management reforms, Ecnec approved a revised project for improvement in financial reporting and auditing at a cost of Rs9.6 billion, a jump of over 75 per cent from the original cost estimated in 2005. Almost 90 per cent of the cost will come in the form of loan from the World Bank. The project has become a classical example of accommodating ‘favourite bureaucrats’.
According to a handout issued by the Planning Commission, Ecnec also approved 15 foreign-funded projects worth Rs165.5 billion including foreign exchange component of Rs117 billion.
Two projects of the health sector worth Rs26.98 billion namely Medical Equipment and Ambulances for DHQ Hospitals in Khyber-Pakhtunkhwa and revised Expanded Programme on Immunisation were also given the go-ahead by the committee.
Secretary Planning and Development Sohail Ahmed briefed the committee on the need for rationalising the project portfolio in line with resource availability. He also emphasised the need for a balance between new and ongoing projects and optimisation of available resources.
Published in The Express Tribune, May 27th, 2011.
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