Work on 1,000 development projects stopped

[Naveed Yaseen]

By Mehtab Haider
ISLAMABAD: Work on over 1,000 development projects worth billions of rupees has been halted owing to a massive cut of 65 per cent in fund releases, The News has learnt.

Actual funds released by the Ministry of Finance were only Rs20 billion in the first quarter (July-September) of 2008-09 under the Public Sector Development Programme (PSDP) against an allocated amount of Rs56 billion in accordance with approved cash plan.

“This has adversely affected over 80 per cent development projects out of a total of 2,000 projects in PSDP list,” a senior official of the Planning Commission confided to The News here on Wednesday.

Executive Committee of the National Economic Council (ECNEC) is scheduled to meet on November 6 with Prime Minister Syed Yousuf Raza Gilani in the chair for approving various development projects, but it would also take up the issue of a massive cut in fund releases in the current fiscal year.

In the wake of financial constraints when the government struggles to keep fiscal deficit within the desired range of 4.3 per cent of GDP, the development sector has once again become a major victim and public sector investment for improving infrastructure would be affected negatively and real GDP growth would fall.

Ongoing work on all mega projects, especially those related to infrastructure, water and power such as Mangla raising project, has been affected, virtually halting development activities because funds were also slashed in the fourth quarter (April-June) of last financial year 2007-08.

This correspondent visited the office of Secretary Planning Division Sohail Safdar on Wednesday, who confirmed that actual releases made by the finance ministry stood at Rs20 billion against demand of Rs56 billion in the first quarter of the current financial year.

“Before ECNEC meeting, we are going to hold a meeting with the Adviser to PM on Finance, Shaukat Tarin, to ask him for a ‘resource envelop’ for the remaining three quarters of the current year,” he said and added it would enable planning managers to set priorities in close coordination with the ministries concerned.

However, some sources in the Planning Commission insisted that actual releases were only Rs17 billion in the first quarter against allocated amount of around Rs60 billion in accordance with approved cash plan.

“Fund releases are just 37 per cent of the allocated amount,” a source said and added the minimum cut in releases was borne by development projects of Higher Education Commission (HEC), which was around 11 per cent.

An official document showed that most affected sectors were water and power, National Highway Authority (NHA) and some others.

Citing examples, sources said the government had allocated Rs2 billion for revamping and rehabilitation of the irrigation and drainage system of Sindh, but actual releases were only Rs300 million.

The government allocated Rs4 billion for the extension of Right Bank Outfall Drainage from Sehwan (RBOD-II) but actual releases were Rs600 million. It allocated Rs8.5 billion for Kachhi Flood Canal Project (Phase-I) but released only Rs200 million.

The government allocated Rs100 million for the extension of Bhakkar Flood Protection Bundi from RD-42-72 Basti Mian Khan to Basti Bakkhar in District Bhakkar but it released only Rs15 million.

http://www.thenews.com.pk/daily_detail.asp?id=143816