The Pakistan Tehreek-e-Insaf (PTI) government has decided to drop nearly Rs1.6tn ($13.11bn) worth projects from the Public Sector Development Programme (PSDP), with the aim to divert public funds towards schemes that are already being implemented.
The government has decided to exclude nearly 450 schemes from fiscal year 2018-19’s PSDP, which will reduce the overall number of schemes to close to 850, said planning ministry officials.
The cost of about 450 schemes, all of them unapproved but part of the PSDP, is Rs1.6tn.
The government move will result into reduction in the PSDP’s financing needs by 27%, to nearly Rs4.3tn, officials added.
Over 60 projects of the National Highway Authority (NHA), with a total cost of Rs1tn, will be removed from the scope of the public financing.
Most of the projects are located in Punjab, which the last Pakistan Muslim League – Nawaz (PML-N) government had included in the PSDP despite the fact that these were provincial roads.
During the PML-N tenure, the number of schemes under the PSDP swelled to close to 1,280, which would require about Rs5.9tn.
The move to reduce the number of PSDP schemes has been taken as part of the PTI government’s plans to introduce fiscal adjustments aimed at improving the overall macroeconomic situation.
On Tuesday Finance Minister Asad Umar told the National Assembly that the budget allocation for the PSDP has been cut to Rs575bn. Under the previous National Assembly, it was Rs800bn.
With the Rs575bn in annual allocations, it will require an average of seven and half years just to complete ongoing projects.
Umar told the National Assembly that in addition to the Rs575bn PSDP allocation, another Rs150bn will be spent, to be covered by funds raised from the private sector, bringing total size to Rs725bn.
He said that out of this Rs725bn, the NHA would raise Rs100bn off the budget to fund its projects, while the Karachi Infrastructure Development Company will generate Rs50bn through Public Private Partnership to finance Karachi projects.
Confusion remains, however, in the planning ministry, which is still preparing the PSDP document on basis of Rs675bn allocation.
It had not finalised the revised PSDP as of yesterday, despite the announcement of the revised budget a day earlier.
The situation will get sorted out before the end of the week, an official of the planning ministry said.
The ministry had projected only a Rs125bn cut in its PSDP document, compared with the Rs225bn cut announced by Umar.
And out of this Rs125bn, Rs45bn will be saved by excluding 450 unapproved schemes.
A total of Rs23bn is proposed to be cut from the finance ministry-administered schemes under the PSDP.
This will hit the allocations of the military establishment, the temporarily displaced persons (TDPs), and the prime minister’s special initiatives.
The government plans to slash a minimum of Rs13bn out of the Rs90bn for the military establishment and the TDPs.
Rs15 billion could be saved by abolishing Rs10bn of the PM funds, and Rs5bn of gas infrastructure funds.
The government will cut a minimum of Rs15bn from the NHA budget, Rs5bn of the Sustainable Development Goals, and about Rs10bn from the planning ministry allocations.
Another Rs20bn are planned to be saved by diverting funds against the schemes that are approved but where work has not commenced.
The federal government will drop over 32 projects for education and health being administered by the defunct Capital Administration Division, which would have cost Rs90bn.
Five commerce ministry projects costing Rs12bn will also be removed from the PSDP.
Roughly one and half dozen finance ministry projects valued at Rs38bn will be dropped from the PSDP.
The Higher Education Commission’s (HEC) three dozen projects worth Rs40bn will be axed from the PSDP, although Umar gave assurances that the HEC projects would be protected.
Around 70 interior ministry projects, costing Rs41bn, will be dropped from the PSDP.
Similarly, three-dozen unapproved health ministry schemes costing Rs50bn are also on the list of schemes to be excluded.
Nine Pakistan Railways schemes worth Rs40bn will be removed.
Nearly a dozen projects of the Power Division, worth Rs26bn, and 15 water resources schemes costing Rs51bn, will be excluded from the PSDP.
GULF TIMES
