Financing infrastructure: CDWP to consider projects worth Rs292b for approval
Additional development projects being put forward despite funding constraints on previously approved schemes.
ISLAMABAD:
The government will consider approval for 76 new development schemes on Wednesday (today), worth an estimated Rs292 billion, including a Rs30.5 billion package for the worse-than-bankrupt Pakistan Railways.
The Central Development Working Party (CDWP) – the second highest approving authority for the development budget – will meet in Islamabad, with Planning Commission Deputy Chairman Nadeemul Haque presiding.
The CDWP has the authority to approve projects worth up to Rs1 billion. Schemes costing more than that have to be forwarded to the Executive Committee of National Economic Council, headed by the finance minister, for final approval.
The volume of the proposed schemes is almost equal to the total development budget for the fiscal year ending June 30, 2012. The Planning Commission has itself identified the indiscriminate proliferation of unfunded development projects as a serious policy problem. The commission recently released a report that admitted that it approved several projects under political pressure, compromising on standards of their economic viability.
Nonetheless, many of the projects under consideration are thought to have strategic economic importance. These include the interconnection between the national grid and the 1,200-megawatt power plant run by Engro Powergen. That project is expected to cost Rs22.1 billion, of which Rs14.8 billion is funded by foreign donors.
Another key scheme is the Rs30.4 billion Natural Gas Efficiency project. The World Bank has indicated that it will provide as much as Rs18 billion ($200 million) for the project, which is meant to reduce the unaccounted-for losses of natural gas in the national pipeline system. By some measures, such losses account for more than 10% of the total 4,100 million cubic feet per day (mmcfd) of gas produced in the country.
The project will primarily be implemented in Sindh and Balochistan, which have the highest incidence of theft. A 5,750-kilometre pipeline will be repaired to prevent leakages. It will also have sophisticated monitoring equipment to reduce the incidence of theft.
There are, however, some projects being considered for the perennially cash-strapped Pakistan Railways, which has yet to even present a restructuring plan. The CDWP will consider whether to allow the railways to buy 50 diesel locomotives with Rs19.4 billion. The procurement will likely be approved since the World Bank will provide a Rs13.5 billion loan for it.
Meanwhile, the railways have yet to complete an inquiry ordered by Prime Minister Yousaf Raza Gilani on allegations of malfeasance in the procurement process for 150 ‘tailor-made’ locomotives that were to have been bought from a company based in the United States.
Saeed Akhtar, who retired as a general manager at Pakistan Railways on March 4, told The Express Tribune that the inquiry had not been completed at the time his service ended
The CDWP will also consider a Rs5.1 billion project for the “special repair” of 150 diesel electric locomotive. It will obtain a Rs3.5 billion loan for this project. A Rs4.9 billion scheme will also be considered for mechanisation of track maintenance pilot project while a Rs1.1 billion project has been prepared to lay rail link from Chaman to Spinbodlak in Afghanistan.
Published in The Express Tribune, March 14th, 2012.
The government will consider approval for 76 new development schemes on Wednesday (today), worth an estimated Rs292 billion, including a Rs30.5 billion package for the worse-than-bankrupt Pakistan Railways.
The Central Development Working Party (CDWP) – the second highest approving authority for the development budget – will meet in Islamabad, with Planning Commission Deputy Chairman Nadeemul Haque presiding.
The CDWP has the authority to approve projects worth up to Rs1 billion. Schemes costing more than that have to be forwarded to the Executive Committee of National Economic Council, headed by the finance minister, for final approval.
The volume of the proposed schemes is almost equal to the total development budget for the fiscal year ending June 30, 2012. The Planning Commission has itself identified the indiscriminate proliferation of unfunded development projects as a serious policy problem. The commission recently released a report that admitted that it approved several projects under political pressure, compromising on standards of their economic viability.
Nonetheless, many of the projects under consideration are thought to have strategic economic importance. These include the interconnection between the national grid and the 1,200-megawatt power plant run by Engro Powergen. That project is expected to cost Rs22.1 billion, of which Rs14.8 billion is funded by foreign donors.
Another key scheme is the Rs30.4 billion Natural Gas Efficiency project. The World Bank has indicated that it will provide as much as Rs18 billion ($200 million) for the project, which is meant to reduce the unaccounted-for losses of natural gas in the national pipeline system. By some measures, such losses account for more than 10% of the total 4,100 million cubic feet per day (mmcfd) of gas produced in the country.
The project will primarily be implemented in Sindh and Balochistan, which have the highest incidence of theft. A 5,750-kilometre pipeline will be repaired to prevent leakages. It will also have sophisticated monitoring equipment to reduce the incidence of theft.
There are, however, some projects being considered for the perennially cash-strapped Pakistan Railways, which has yet to even present a restructuring plan. The CDWP will consider whether to allow the railways to buy 50 diesel locomotives with Rs19.4 billion. The procurement will likely be approved since the World Bank will provide a Rs13.5 billion loan for it.
Meanwhile, the railways have yet to complete an inquiry ordered by Prime Minister Yousaf Raza Gilani on allegations of malfeasance in the procurement process for 150 ‘tailor-made’ locomotives that were to have been bought from a company based in the United States.
Saeed Akhtar, who retired as a general manager at Pakistan Railways on March 4, told The Express Tribune that the inquiry had not been completed at the time his service ended
The CDWP will also consider a Rs5.1 billion project for the “special repair” of 150 diesel electric locomotive. It will obtain a Rs3.5 billion loan for this project. A Rs4.9 billion scheme will also be considered for mechanisation of track maintenance pilot project while a Rs1.1 billion project has been prepared to lay rail link from Chaman to Spinbodlak in Afghanistan.
Published in The Express Tribune, March 14th, 2012.