Bloated PSDP portfolio: Seventeen more projects worth Rs166b approved

A finance ministry handout claimed that Ecnec had approved 15 projects of national importance costing Rs154.52 billion

Shahbaz Rana July 29, 2011


In spite of recognising the need to slash current portfolio of public sector development programme (PSDP) that has already swelled to Rs4,100 billion, the government on Friday approved 17 projects costing Rs166 billion including a controversial security-related scheme marred with kickback allegations.

The Executive Committee of National Economic Council (Ecnec) has approved Rs166 billion worth of projects, said Planning Commission Deputy Chairman Dr Nadeemul Haque while talking to The Express Tribune. The meeting was chaired by Finance Minister Dr Abdul Hafeez Shaikh.

However, a finance ministry handout claimed that Ecnec approved 15 projects of national importance costing Rs154.52 billion.

Ecnec, the highest project approval authority, also sanctioned the controversial Safe City Islamabad project with an estimated cost of Rs12.9 billion ($151 million). Still, there was confusion over the price as Dr Asif Shaikh, the PSDP specialist of the Planning Commission, said the rationalised price of the project was approximately Rs10 billion.

The finance ministry handout said the Safe City project was not approved by Ecnec. The finance minister directed the National Database and Registration Authority (NADRA) to review the project, it added. Contrary to the handout, both the minister and the deputy chairman said the project has been conditionally approved.

The Safe City project is aimed at beefing up security in the capital by installing CCTV cameras, explosive detectors and scanners at entry and exit points. The government intends to install Chinese-made scanners for increasing security in the capital. A committee pointed out that the cost of the project is much higher than it should be and estimated that the total cost was not more than Rs6.7 billion ($78 million), a gap of Rs6.2 billion between the committee’s assessment and the interior ministry’s PC-I. The Planning Commission’s technical wing also raised certain objections over the project’s viability.

Hafeez Shaikh told The Express Tribune that the approval of Safe City project was subject to the Supreme Court’s decision. A petitioner, Shahid Orakzai, had filed a petition in the apex court, seeking its intervention for stopping alleged corruption in the project. The Central Development Working Party (CDWP), led by Planning Commission Deputy Chairman Dr Nadeemul Haq, had dropped the project on the same grounds.

An official said many more questions were raised over the Safe City project but the finance minister overruled all of them and cleared the scheme. He, however, called for taking the law ministry’s opinion on the project.

Project delivery cost shoots up

An analytical review of the PSDP portfolio, released last week by the Planning Commission, said that delivery cost of the Rs4.1 trillion worth of projects has alarmingly shot up to 22 per cent.

It emphasised the need for rationalising the portfolio and recommended that only foreign-funded projects should be approved. Ironically, Planning Commission’s Dr Nadeemul Haque was part of the committee that approved the 17 projects, with total size of the portfolio swelling to Rs4.3 trillion.

According to an assessment of the Prime Minister’s Inspection Commission, due to scarcity of resources it would take 21 years to only complete the ongoing projects without approving any new scheme.

Ecnec approved a scheme for reconstruction and rehabilitation of assets damaged during last summer floods with an estimated cost of Rs6 billion, said Dr Asif Sheikh. Another project for reconstruction of damaged sections of national highways was also approved. The committee also cleared Allai Khwar hydropower project of 121 megawatts.

Published in The Express Tribune, July 30th, 2011.


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