Rs 250 billion development projects slashed due to crunch

ISLAMABAD: Severe financial crunch being faced by the country has forced the government to remove development projects worth Rs250 billion from the list of Public Sector Development Programme (PSDP) in order to slash down growing throw forward, it was learnt reliably.The government is also seeking permission from Prime Minister Syed Yousuf Raza Gilani through a summary to scale down allocation for the PSDP by Rs141 billion for the current fiscal year 2008-09.Two separate summaries were moved before the prime minister out of which one already approved by the premier was related to scaling down the throw forward by Rs250 billion, enabling the authorities to cut down throw forward from Rs1.8 trillion to Rs1.550 trillion for around 1,700 development projects. The second summary tabled before the premier was aimed at reducing the Public Sector Development Programme (PSDP) allocations by Rs141 billion for the current fiscal year 2008-09.In order to meet a condition of the World Bank for decreasing throw forward for obtaining $500 million loan within the ongoing month, Gilani has approved a summary to scale down throw forward by Rs250 billion by deleting 70 to 80 projects from the Public Sector Development Programme (PSDP) list.The major development projects, which were removed from the PSDP list, are construction of universities with an estimated cost of Rs174 billion in various cities, Chashma Right Bank Canal (CRBC) (Rs60 billion), construction of Munda dam, commercialisation of tea project, Karachi-Hyderabad Motorway project with an estimated cost of Rs2.5 billion and some other projects.The throw forward means that the total cost of projects is increased because sufficient resources were not allocated while more new projects were included in the PSDP list, resulting in cost overrun as well as delays in completion of the projects.The throw forward had touched Rs1.8 trillion for almost 1,800 development projects. By removing 70 to 80 projects from the PSDP list, throw forward stood at Rs1,550 billion.Out of total removed projects, some of them have been shifted to the public-private partnership (PPP) on BOT basis such as Munda dam, commercialisation of tea project and Karachi-Hyderabad motorway.When Planning Commission Secretary Ashraf M Hayat was contacted for seeking his comments, he said the financial constraints put pressure on the economy and options were considered to rationalise the development projects. The development projects will be staggered in such a way that fiscal resources will be utilised only for crucial and most important projects. He said it was the view of the planning commission that all kinds of development was essential for this country but there was need to look at the reality of the available resource.“It is our priority that there should be no cut in the PSDP allocations,” he said and added the rationalisation exercise was initiated keeping in view the existing financial crunch being faced by the country. He said the exercise of reducing throw forward was done before assuming charge by him. However, rationalisation of current fiscal year allocation was recommended to the premier by listening views of all ministries/divisions, he added.