Govt objects to Rs14.2b defence ministry proposal

Ministry sought funds out of development budget to procure 6 patrol vessels for Pakistan Maritime Security Agency

ISLAMABAD: The federal government on Wednesday objected to a proposal of the Ministry of Defense that sought Rs14.2 billion funds out of the development budget to procure six patrol vessels for the Pakistan Maritime Security Agency.

The move was blocked by the Central Development Working Party (CDWP) –the body that has the mandate to clear up to Rs3 billion development schemes. Headed by Federal Minister for Planning, Development and Reforms Ahsan Iqbal, the CDWP also advised the Ministry of Defense to renegotiate the terms of a loan that China will provide to procure the vessels.

The representatives of the Ministry of Defense and Economic Affairs Division were unaware of the terms of the loan, according to officials who attended the meeting.

The CDWP has constituted a committee, which will be headed by Member Infrastructure of Planning Commission, to look into whether the project falls in the category of development or recurrent expenditure, said a senior official of the Ministry of Planning.

He said the planning minister was of the view that the project falls in the category of current expenditures and should be financed by the Ministry of Finance.

Though, the Planning Ministry seeks a review of the nature of expenditure, it has already made the project part of its next year’s Public Sector Development Programme.

It has allocated Rs100 million for the fiscal year 2014-15. The cost of the project includes a Rs4.72 billion foreign loan.

The CDWP cleared eight projects costing Rs38.5 billion including foreign exchange component of Rs20.8 billion, according to an official handout of the Ministry of Planning.

The approved projects were in agriculture, education, environment, physical planning and housing, transport & communications, and water.

It deferred two projects of the Khyber-Pakhtunkhwa (K-P) government which were in the energy sector. The K-P government wanted to construct a 69 megawatts Lawi hydropower project in District Chitral at a cost of Rs26.7 billion, which includes Rs7.2 billion of foreign funding.

The second project was a detailed design construction of a Gorkin-Matiltan hydropower project in District Swat, worth Rs22.1 billion.

Commenting on the projects from the education sector, Iqbal said that quality of education was vital for the country’s development.

“We need to invest heavily in education to meet the Millennium Development Goals commitment by increasing enrolment in schools,” he said, pointing out a lack of resources for education in rural areas as well as a dearth of science teachers in rural areas.

Iqbal asked for a massive increase in the induction of science teachers in rural Sindh, while showing serious concern regarding the education indicators.

The education indicators in rural Sindh are very low thus Iqbal directed the authorities to come up with projects that can help address the issues, according to the official handout.

The CDWP approved, in principle, a Specialized Medium Ranger Forecasting Centre worth Rs2.5 billion, almost fully financed by Japan. It asked the Aviation Division to rationalise the cost and modify the scope of the project.

The project aims at modernising and upgrading the forecasting and dissemination systems to effectively reduce the impacts of natural disasters by utilising innovation in technologies.

The CDWP also cleared, in principle, the Rehabilitation and Upgradation of the Trimmu Barrage and Panjnad Headwork project at a cost of Rs18 billion including foreign loan of Rs3.5 billion. It had reservations over the higher estimated cost.

It further cleared, in principle, yet another project, construction of expressway on East Bay of Gwadar Port costing Rs14.8 billion with foreign exchange component of Rs13.8 billion. The CDWP objected over high cost of the project and left the final decision on Executive Committee of National Economic Council.

The project is designed to construct a four-lane exclusive and bounded expressway with embankment for six lanes integrating Gwadar Port with Makran Coastal Highway as well as a free zone and future container terminals.

The CDWP’s move to clear projects in principle highlight the pressure that it faces to sanction the projects, despite serious flaws in designing and cost estimates.