Islamabad: NOC now needed for big projects

[LRE]

NOC now needed for big projects



Saturday, September 13, 2008
Mehtab Haider

Islamabad

The government has made it binding on all ministries/divisions to get a no-objection certificate for approval of big development projects.

Without attaching the NOC from Infrastructure Project Development Facility (IPDF) and Board of Investment (BOI) along with PC-1, all relevant forums such as the Central Development Working Party (CDWP) and Executive Committee of the National Economic Council (Ecnec) would not approve any development projects.

“It is now binding on all ministries/divisions to submit NOC along with PC-1 otherwise the CDWP will not approve any development projects in the future,” a high-level official of the Gilani government told ‘The News’.

This decision is aimed at avoiding spending money on those development projects in the future where local or foreign investors are ready to spend their money.

After the next CDWP meeting, which would be held on September 18, 2008, these directives would be implemented in letter and spirit. As major chunk of existing projects within the Public Sector Development Programme (PSDP) were already approved so frequent holdings of the CEWP meetings would also be reduced in months ahead.

When official spokesman of the Planning Commission, Asif Sheikh was contacted for comments, he confirmed that they have directed all ministries/divisions to submit NOC from the IPDF and BOI for approving any development project in the future.

Except few new initiatives, total development projects are in the range of 1,800, with estimated cost of Rs1.8 trillion, which were already approved. Rather than approving bulk of projects, the government is undertaking new initiatives to shift at least 50 to 100 projects towards the IPDF where private sector would show its interest for investments.

Owing to pressing financial constraints in the wake of surge in prices of POL products and food commodities, the government is making efforts to cut down PSDP by Rs100 billion during the current fiscal year in the name of rationalisation.

But the officials in the Planning Commission do not concede that the government wanted cutting down PSDP allocation during the current fiscal year. They term this exercise as rationalisation of PSDP in which overall spending would not be reduced. They argued that the public sector investment would give impetus to slowing down economic activities so the government cannot afford taking steps to further jeopardize its downslide economic situation.

But the officials in the Finance Ministry said that the Planning Commission initiated various development projects unnecessarily and there was no linkage between public sector investment and its direct impact on higher growth in medium term. The factor of time lag should not be ignored while making any in-depth analysis on this subject.

“No one knows that how much our national economy is in trouble than the high-ups of the Finance Ministry,” a senior official in the Finance Ministry said and added that the Planning Commission had initiated projects without well thought out strategy.

They said the issue of throw forward really made difficult to gauge real impact of spending on development projects. Owing to scarcity of resources, the government gives little bit to a certain project while the remaining balance to this effect goes to next year in shape of throw forward. The rampant throw forward resulted into escalation of cost and timeframe for completion of the projects.

http://www.thenews.com.pk/daily_detail.asp?id=135474