CDWP clears PM tsunami tree project at Rs125b cost

Decision violates law which binds authorities to approve only financially viable schemes

Shahbaz Rana July 05, 2019

ISLAMABAD: The government cleared on Thursday Prime Minister’s tsunami tree project at a cost of Rs125 billion in violation of a recently approved Public Finance Management Act (PFMA) that binds authorities to approve only those development schemes that are financially viable.

However, the government cleared the tsunami tree scheme without conducting its cost-benefit analysis, compelling the Ministry of Planning and Development to raise serious observations over its viability. The first violation of the PFMA of 2019 has been committed four days after its enforcement. The government had bulldozed the PFMA through the National Assembly on Friday aimed at fulfilling the condition of the International Monetary Fund (IMF).

The Central Development Working Party (CDWP) cleared 16 projects costing Rs217 billion including Prime Minister Imran Khan’s pet project to plant 3.3 billion trees across the country at a cost of Rs125 billion. Federal Minister for Planning and Development Makhdoom Khusro Bakhtiar presided over the CDWP meeting.

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The CDWP recommended the Ten Billion Trees Tsunami programme for approval of the Executive Committee of National Economic Council (Ecnec) without quantifying economic and financial benefits of the project.

To execute the scheme, 48 vehicles will be bought despite a complete ban on the purchase of new vehicles by the prime minister.

“The Ministry of Climate Change presented the Ten Billion Tree Tsunami project (phase-1) worth Rs125 billion, which was referred to Ecnec for approval,” stated the Ministry of Planning in its official statement. About 3.3 billion trees will be planted at a total cost of Rs125.1 billion.

“Economic/financial benefits of the programme have not been quantified in monetary terms. Therefore, the viability of the proposed investment (Rs125 billion) cannot be gauged through conventional cost-benefit analysis,” according to the Ministry of Planning’s observations that it recorded in writing.
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The planning ministry also wrote that annual operating and maintenance cost after completion of the project had not been indicated in the PC-I.

“Cost and benefit analysis and risk assessment of all development project proposals, in excess of a threshold size prescribed by the Planning Commission, shall be undertaken,” reads Section 14(2) of PFMA.

“The CDWP conditionally cleared the project and it will be recommended to Ecnec only after doing the cost-benefit analysis,” said Ministry of Planning, Food Security and Climate Change Department member Dr Azeem. “There are nine observations on the project and those would have to be addressed before the tsunami programme is recommended to Ecnec.”

He said the tsunami tree programme fell in the category of core projects due to its importance for the country. However, legal experts argue that in true spirit of the law, the project should not have been presented even before the CDWP for approval in absence of a cost and benefit analysis.

The IMF put the condition of PFMA for qualifying for a $6-billion bailout package aimed at ensuring fiscal discipline and stopping misuse of public funds for politically motivated schemes. In order to stop wastage, the PFMA allows approval of only two types of schemes - core projects and sector projects.

Out of the Rs125.1 billion, an amount of Rs109.1 billion will be spent on forestation activities and remaining Rs15.8 billion has been allocated for wildlife component. The project will be executed in four years. PC-I of the project was also silent on item-wise, year-wise physical and financial phasing of the project, which shows that the climate change ministry has not done any homework before seeking approval of the mega scheme.

The planning minister said it was a flagship project of the current government and it was committed to the scheme’s implementation to mitigate the impact of climate change in the country. He hoped that the institutions concerned would select environment-friendly species for effective implementation of the programme.

The targets of the programme would also contribute to soil conservation, improvement in water storage capacity and the recharging of aquifers of the areas, he added. The CDWP also recommended Pakistan Research Reactor-3 project worth Rs4.7 billion to Ecnec for approval. 

Published in The Express Tribune, July 5th, 2019.

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