Pak govt to defer new projects due to financial constraints

Islamabad: The government will continue deferring approval of new development projects due to serious financial constraints the country is facing, informed sources said.

Sources said that Planning Commission (PC) would keep up the policy of not convening the meeting of Central Development Working Party (CDWP) to clear the new projects, which are pending for approval since May 2, 2008.

According to the sources, some ongoing projects are also being delayed due to the same factor and it is feared that allocation of Public Sector Development Programme (PSDP) 2008-09 might be cut if financial troubles lingered on.

The sources said that the PC intentionally delayed the meeting of the CDWP, which last time met some three months ago under the chairmanship of the former deputy chairman Dr Akram Sheikh. The CDWP is yet to meet for the first time in the current fiscal after Salman Faruqui replaced Akram Sheikh.

The sources said that CDWP used to meet every month for the prime purpose of timely clearing the development schemes. Under the same strategy, the Executive Committee of the National Economic Council (Ecnec) used to meet after every three months.

Under the present leadership, the PC has become more or less inactive to take the development agenda ahead. There are some important projects, which needed to be implemented on fast track basis to improve various sectors of economy. The sources said that development budget was made scapegoat even in the last fiscal. Due to financial constraints, and part of money-saving campaign, over 200 new development projects/schemes under the PSDP 2007-08 were put on hold.

According to some reports, Rs 40-45 billion allocation was diverted for plugging budgetary deficit. The Ministries of Water and Power, Finance, Food and Agriculture, Industries and Production, Petroleum and Natural Resources, Environment, Health, Population, Higher Education Commission (HEC) and Social Welfare and Special Education Division were hit by the cut in the development budget last fiscal.

The Finance Ministry's Khushhal Pakistan Programme (KPP) would be the biggest loser due to the government's changed strategy. Its over 100 new projects/schemes have been deferred for next fiscal year. It was a Rs 34 billion programme, and almost half of its allocations were spent on the on-going special projects/schemes in the last fiscal.

According to the sources, there are around 100 development projects that needed to be approve/cleared by the CDWP, but the PC is deliberately deferring the meeting to get more and more time. The oil prices in the international and local markets hiked the overall cost of ongoing development projects and the PC and other concerned authorities, including the provincial governments, are yet to determine how to cope with the project's escalated cost within available resources.