CDWP stalls defence procurement bid

Advises defence ministry to re-negotiate terms of loan to acquire vessels for MSA.

ISLAMABAD:

The government on Wednesday raised objection over a proposal by the Ministry of Defence that sought Rs14.2 billion funds out of the development budget to procure six patrol vessels for Pakistan Maritime Security Agency.

The move was stalled by the Central Development Working Party (CDWP) – a body authorised to clear development schemes worth up to Rs3 billion.

Headed by Minister for Planning, Development and Reforms Ahsan Iqbal, the CDWP also advised the defence ministry to re-negotiate the terms of a loan that China will provide to procure the vessels.

According to officials privy to the development, representatives of the Ministry of Defense and Economic Affairs Division were unaware of the terms of the loan.

Subsequently, the CDWP constituted a committee 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 bankrolled 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 (PSDP). It has earmarked Rs100 million for fiscal year 2014-15. Whereas the project cost includes Rs4.72 billion foreign loan.

Out of the 23 proposed projects the CDWP cleared eight costing Rs38.5 billion including a foreign exchange component of Rs20.8 billion. The approved projects were in agriculture, education, environment, physical planning and housing, transport & communications, and water.

However, it deferred two energy sector projects of Khyber-Pakhtunkhwa (K-P) government which would have allowed it to construct 69 megawatts Lawi hydropower project in Chitral district at a cost of Rs26.7 billion that includes Rs7.2 billion foreign funding. The other project was related to the construction of Gorkin-Matiltan hydropower project in Swat District worth Rs22.1 billion.

Commenting on the education sector projects, Iqbal said quality 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 added.

The CDWP approved, in principle, a Specialised Medium Ranger Forecasting Centre worth Rs.2.5 billion, financed by Japan. It asked the Aviation Division to rationalise the cost and modify the scope of project.

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

Published in The Express Tribune, June 26^th, 2014.