Islamabad:
Chief Minister Anwaarul Haq Kakar on Monday asked the provinces to take responsibility for 75 projects to save the center from a financial burden of Rs 200 billion amid reservations expressed by the federal units over the mandate of a caretaker government to take such decisions .
Despite the transfer of 75 projects, the federal government will retain ownership of 282 projects of a provincial nature that will require an additional Rs 800 billion to complete work on them. The federal government has already spent a whopping Rs 366 billion on these projects.
The caretaker prime minister chaired a meeting of the National Economic Council (NEC) – the constitutional forum responsible for taking decisions on macroeconomic and development plans, which was also attended by three provincial chief ministers except Punjab.
The NEC asked the provinces to take up 68 projects costing Rs 121 billion and banned further spending on MPs’ programs and the Prime Minister’s initiatives. These three steps will save the center Rs 202 billion in costs, including Rs 112 billion during the current financial year.
However, the chief ministers of Sindh and Khyber-Pakhtunkhwa (KP) raised questions about the mandate of the caretaker government to take economic decisions that have long-term implications, government officials who attended the meeting said. They said the Sindh chief minister also cited Section 230 of the Election Act which curtailed the role of the caretaker government.
The NEC, however, approved guidelines for the preparation of the development budget of the financial year 2024-25, disallowing any allocation for projects of a provincial nature and placing a moratorium on approving projects with operational and maintenance costs.
An official statement from the Prime Minister’s Office said the NEC approved the recommendations of the Special Investment Facilitation Council (SIFC) to close and transfer provincial projects funded by the federal government. The SIFC had suggested that the provincial projects for which money had not been spent so far should either be closed or transferred to the provinces. Similarly, the SIFC also banned further spending on MPs’ programs and Prime Minister’s initiatives.
The NEC approved the recommendations except for two projects in the education sector, the Prime Minister’s Office said.
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During the meeting, the caretaker prime minister questioned the financial integrity of government officials involved in processing projects, approving and releasing funds and awarding contracts, the sources said.
Despite the reservations expressed by the provincial governments, the prime minister, as chairman of the NEC, decided that the federal government would not implement all the provincial projects with zero economic progress. Rs 32.5 billion has been allocated for 68 projects with a total cost of Rs 118 billion. The NEC decided that the remaining Rs 28.8 billion will not be released for MPs’ schemes from the annual allocation of Rs 90 billion for the current financial year. Savings of Rs 28.8 billion will be diverted to other important projects, especially where additional foreign components are required. Spending under the Prime Minister’s initiatives will be curbed, which will save another Rs 53 billion.
It has been decided that the federal government will complete 282 ongoing projects to avoid wasting investments already made and due to potential legal and contractual issues.
Sources said the Balochistan government was of the view that federal funding of all ongoing projects should continue. The KP government has insisted that decisions to close and transfer projects should be taken by the elected government.
The Sindh government also expressed similar views and opposed the transfer of projects apart from the MPs’ plans. But the SIFC and the federal government were of the view that due to the shrinking of the federal government’s fiscal space and to free up resources for critical needs, federal funding should be drowned out for provincial projects.
The NEC approved new guidelines for inclusion of new projects and grants under the Public Sector Development Program (PSDP) 2024-25, from July. It agreed that priority should be given to funding strategic and key ongoing projects, with particular emphasis on water resources, transport, railways, communications and energy. It also approved that funding priority should be given to projects with more than 80% expenditure in all sectors with a view to their completion during the 2024-25 financial year.
Published in The Express Tribune, January 30u2024.
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