New development schemes worth Rs38b approved

Shahbaz Rana June 08, 2010

ISLAMABAD: The government has approved four new development schemes worth Rs38.5 billion, including a controversial project for the purchase of locomotives from the US, violating the policy of judiciously utilising scared resources and allocating funds for ongoing projects only.

In all, the Central Development Working Party (CDWP) on Tuesday approved seven development projects worth Rs74 billion. To meet the financing needs, the government will borrow Rs55.5 billion from external sources.

An official of the Planning Commission said four of the seven projects were new and the other three were old but their prices had escalated due to various reasons.

The new projects include purchase of 150 diesel engines for the Pakistan Railways at an estimated cost of Rs25 billion, the National Security and Communications System project worth Rs13.2 billion, construction of a stadium in Peshawar costing Rs89.5 million and the Pakistan Energy Council’s initiative for promotion of solar power which will cost Rs236.2 million.

Finance Minister Dr Abdul Hafeez Sheikh, in the post-budget press conference on Sunday, said because of scarcity of resources the government has changed the practice of approving new schemes as it has been unable to complete ongoing projects.

According to the Planning Commission estimates, the cost of ongoing projects is more than Rs3.8 trillion, which is Rs500 billion more than the size of the total budget for the next financial year.

The CDWP cleared the purchase of 150 locomotives for the Pakistan Railways, costing Rs25 billion.

The government has allocated only Rs100 million for the project for the next financial year, beginning in July.

Deputy Chairman Planning Commission Dr Nadeem-ul-Haq, who chaired the CDWP meeting, defended the approval of new schemes. “It is not a deviation from the policy as the project is an essential part of restructuring the Railways and without that it will sink,” he added.

He said the government is receiving special financing from the US and it will not be an immediate burden on the exchequer. Dr Haq said the project will start in three years and the go-ahead was given to kick-start talks with the suppliers.

The CDWP also approved a revised project for rehabilitating the Jabban Hydro Electric power project at a cost of Rs3.8 billion. The cost of the project has surged more than 265 per cent as the executing agency could not complete it in the given timeframe.

The meeting also approved in principle a revised project for construction of the Tha Kot Bridge over River Indus at a cost of Rs655 million.

Secretary Planning Commission said the National Highway Authority has been asked to rework the cost of the project and rationalise it as it was on the higher side.

Another revised scheme was the Tarbela Hydropower Extension Project. Original cost of the project was Rs388.1 million and according to officials the cost has soared to Rs590.5 million due to modification in the design and rise in prices of foreign and local material.

Published in the Express Tribune, June 9th, 2010.


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