Projects worth Rs1.1tr approved

Finance ministry allows 15% of Q1FY24 budget for parliamentary schemes

ISLAMABAD:

On Tuesday, the government approved nearly Rs1.1 trillion for six projects, which include schemes for the installation of solar tube wells on a cost-sharing basis and the goal of obtaining a polio eradication certificate by 2026.

The Executive Committee of the National Economic Council (ECNEC), the highest authority for project approval, sanctioned these schemes, which will have a precise overall financing impact of Rs1.08 trillion. The meeting was chaired by Finance Minister Ishaq Dar, who also approved revisions in the cost of a few previously approved schemes.

According to the finance ministry, the ECNEC approved the Prime Minister’s National Programme for the solarisation of agriculture tube wells in Punjab, Sindh, Khyber-Pakhtunkhwa (K-P), and Balochistan. The cost of this programme is Rs377.2 billion, and it has a gestation period of three years.

The federal government will contribute Rs139 billion, the provinces will contribute Rs119 billion, and the remaining Rs119 billion will be contributed by the farmers. The scheme aims to replace 50,000 diesel engine tube wells and 50,000 electric tube wells with solar-fired engines.

The first phase of the project, for the financial year 2023-24, will have a cost of Rs90 billion, including Rs30 billion from the Public Sector Development Programme (PSDP) and an equivalent share from provincial governments and beneficiary farmers, as stated by the finance ministry.

The ministry also highlighted that this project aims to enhance agricultural productivity through the use of clean and green energy by converting the existing 100,000 tube wells into solar PV systems.

Pakistan faces the daunting task of managing its development needs with limited financial resources, as the development budget is primarily directed towards politically-oriented projects. For example, out of the Rs950 billion allocated for development spending in the first quarter of this fiscal year, the finance ministry has allowed Rs142.5 billion, or 15% of the budget, for spending.

According to an office memorandum issued by the Ministry of Finance last week, out of the Rs142.5 billion, Rs61.3 billion has been authorised for spending in just three months on schemes recommended by parliamentarians.

Furthermore, the ECNEC approved a revised project called the Emergency Plan for Polio Eradication, with a cumulative cost of $1.8 billion or Rs513 billion. This project aims to make Pakistan polio-free and has been approved for the period of 2022-26, with the ultimate goal of obtaining a polio-free certificate from the world.

The government aims to permanently interrupt all types of polio viruses by the end of 2023 and achieve certification of polio eradication by the end of 2026.

The ECNEC also approved the K-P Rural Investment & Industrial Support Project, with a cost of Rs110.7 billion. This project will be executed by the government of K-P in various districts, including Bajur, Khyber, Kurram, Mohmand, North Waziristan, Orakzai, South Waziristan, and erstwhile FR regions. The World Bank will provide a $300 million loan, while the provincial government will contribute Rs29.7 billion. The project is scheduled to be completed in two phases over nine years.

design: Ibrahim Yahya

Additionally, the ECNEC approved a revised PC-I of an ongoing project of the Sindh Government, the Sindh Solar Energy scheme. The project was approved at a 114% higher cost of Rs27.4 billion, which includes a foreign loan of Rs24.2 billion. The project will be financed through a $100 million WB loan and $5 million from the government of Sindh. The ongoing project aims to improve energy security and fulfil Pakistan’s international commitments on climate change, said the ministry.

The ECNEC also approved a scheme for the evacuation of power from the 800 MW Mohmand Dam hydropower project to the national grid, with a slightly upward revised cost of Rs14.3 billion. There is also a loan component of Rs6.3 billion. The Asian Development Bank (ADB) will finance the project. The National Transmission & Dispatch Company (NTDC) will be responsible for executing the project in the districts of Nowshera, Peshawar, and Mohmand in K-P.

Another project approved by the ECNEC is the construction of the Lahore Bypass from Kalashah Kaku exit to Multan Road near Radio Station, at a downward revised cost of Rs34.4 billion. The government decided to reduce the scope of the project from 40 kilometres to 18.5 kilometres, resulting in a cost reduction of 45%, or Rs28 billion.

The National Highway Authority (NHA) will execute the project in the districts of Lahore and Sheikhupura in Punjab Province. The project will be entirely financed by the federal government through PSDP.

Published in The Express Tribune, July 12^th, 2023.

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