Lack of rupee cover delays foreign-funded projects

The Economic Affairs Division (EAD) is facing challenges in maximizing the utilization of funds allocated for foreign-funded projects due to a lack of rupee cover from the Planning Division. This issue stems from targets, including the primary balance, agreed upon with the International Monetary Fund (IMF).

EAD Secretary Kazim Niaz told the National Assembly's Economic Coordination Committee that if the Planning Division provided the rupee cover for the foreign-funded projects under the Public Sector Development Programme (PSDP), the amount could be utilised to the maximum extent.

The committee met here with its chairman Atif Khan in the chair. At the outset of the meeting, Secretary Niaz urged the members to take separate briefings on each sector, because it would be difficult to brief on 298 projects in one sitting.

On that, committee member Mirza Akhtar Baig said that the secretary should brief the members on the important projects and the issues related to them. Niaz said that at present the major projects were related to energy and communication.

When the chair pointed out that besides the federal government projects, there were the projects of the provincial governments, which were also being run with foreign aid, Niaz said that they were in touch with the planning departments of the provincial governments concerned on those projects.

"Projects are delayed by PC-1 [Project Charter 1, which is a document that formally authorises the existence of a project]," the EAD secretary told the committee. "Delays in the PC-1 lead to increased costs," the secretary added.

"Opening special account for projects is often delayed and because of that foreign funding is delayed. A project director is not appointed, there is no project team and for these reasons, donors do not give money," he said. "If the staff are hired in advance, the projects can be completed on time," he added.

Committee member Akhtar Bibi pointed out that houses were not being built for flood-affected people of Balochistan. The secretary replied that the Balochistan government had not taken loan for the houses. In this regard, he said the Planning Commission and the provincial government had to work together.

He told the participants of the meeting that with its own efforts, the Sindh government acquired loans for the construction of houses for the flood-affected population. "Pakistan has taken a loan of $400 million for the houses," he said.

Pointing out the problems in executing the projects, the secretary said that many issues were related to the provincial governments. "There is this issue of valuation and ownership of development projects," he said. The chair agreed that there were many problems in acquiring land for projects.

"Acquisition of land is a purely provincial matter," Secretary Niaz told the committee. He further said: "If there are daily processions or rallies, when will the projects be completed. Therefore, local issues also need to be addressed in relation to development projects."