RECORDER REPORT
ISLAMABAD (July 14 2010): Federal government
has decided to rationalise the current
year's Public Sector Development Programme (PSDP)
by deleting hundreds of projects with the
objective of reducing the burden of existing
Rs 3 trillion throw-forward liability by
20-30 percent after the National Finance
Commission (NFC) Award, Business Recorder
has learnt reliably.
After rationalisation of PSDP, no cut will
be made in allocation of overall PSDP but
number of projects will be reduced to divert
funding to other result-oriented projects.
The federal size of PSDP is Rs 280 billion.
Sources revealed that Planning Commission
has convened a high level meeting of all
concerned Ministries and Divisions on July
19, 2010 to rationalise PSDP 2010-11.
National Economic Council (NEC) had also
decided to rationalise the number of
projects to reduce the burden of throw
forward liability.
"Finance Ministry said that World Bank (WB)
has also urged the government to rationalise
the PSDP to target result-oriented
projects," sources said adding that
following directions of Finance Ministry,
Planning Commission has written letters to
all Ministries and Divisions to identify
projects which they want to continue.
Sources said that Planning Commission had
proposed a three-pronged strategy to delete
projects from current year PSDP. "It has
been proposed to Ministries and divisions to
delete slow moving projects, new projects as
well as provincial projects that would
devolve to the provinces and which were
inducted in PSDP for political reasons."
Government has already dropped hundreds of
provincial projects with a cost of around Rs
140 billion whose fate is in limbo as
neither federal government nor provinces are
willing to take financing responsibility.
"Federal government expressed its
willingness to provide funding for only
those provincial projects which are in
development packages like Multan, Larkana,
Haiderabad, Karachi and Balochistan,"
sources said adding that Rs 373 billion
provincial share in development budget also
includes Rs 100 billion throw forward amount
from federal PSDP to provincial share for
2010-11. "As part of the rationalisation
process some provincial projects falling in
development packages may also be deleted
from PSDP," sources maintained.
Around 50-60 percent work has been completed
on ongoing provincial projects, which have
already been dropped. "National Economic
Council (NEC) had directed provinces to bear
the complete cost of ongoing projects from
their own resources subsequent to their
enhanced share in NFC award," sources said
adding that federal government dropped all
ongoing provincial projects from federal
Public Sector Development Programme (PSDP).
In letters sent to the Centre, provincial
governments have refused to own the funding
liability for these projects and urged the
federal government to provide funds to
complete those projects which were dropped
from the current year's federal PSDP.
Copyright Business Recorder, 2010
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