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Planning Commission reallocates funds to complete 101 projects

Planning Commission reallocates funds to complete 101 projects

ISLAMABAD: With the inundation of Rs1.62 trillion worth of half-cooked projects in the national development programme in just one year, the Planning Commission re-appropriated funds allocated by the National Economic Council (NEC) for 213 projects during the outgoing fiscal year for speedy completion of 101 projects.

This was mainly because of start-up problems with tens of hundreds of development projects that were made part of the current year’s public sector development programme (PSDP) and could not take off.

This is despite claims by Minister for Planning and Development Ahsan Iqbal that the PML-N government has done away with the practice of allowing unapproved projects in the PSDP with token allocations.

In a report shared with the Annual Plan Coordination Committee (APCC) and the NEC recently, the Planning Commission said: “The PSDP 2016-17 included 225 unapproved projects worth Rs1.62tr having an allocation of Rs93bn for 2016-17.”

The commission claimed it requested line ministries and executing agencies throughout the year to speed up the submission of project documents and get them approved, but to no avail. “Despite these efforts, 77 projects of 19 ministries (out of a total of 35 ministries) were still unapproved as of May 10, 2017,” the report said.

Perturbed over the situation, the Planning Commission has now requested the ministries and divisions “to fix responsibility for non-preparation of PC-1s despite repeated requests and available resources”.

The report said the Planning Commission authorised the re-appropriation of Rs53.4bn from 213 slow-moving projects to 101 fast-track projects. Through these re-appropriations and adjustments in the PSDP, the Planning Commission expected the completion of 145 projects by June this year, having a total cost of Rs68bn.

This was despite the fact that the Planning Commission decided last year not to encourage new projects except those that fall strictly within the development agenda under Vision 2025 while projects initiated before 2010 having throw-forward of Rs15 million were deleted.

The report said the NEC accorded the highest priority to the energy sector last year with an allocation of Rs405bn, including Rs250bn self-financing by generation companies and National Transmission and Despatch Company (NTDC). The transport and communication sector was the second top priority with an allocation of Rs240bn, followed by health and population Rs36bn, water Rs30bn, and education and training Rs30bn.

The Planning Commission undertook quarterly PSDP reviews in November 2016 and January and April 2017. The ministries were told that PC-1s of unapproved projects reflected in 2016-17 should be approved before December 31, 2016. Otherwise, allocated funds would be re-appropriated. They were also directed to ensure that any unspent amount was not surrendered unilaterally to the Accountant General of Pakistan Revenue (AGPR) and be brought to the Planning Commission for advice by May 10 for re-appropriations.

The ministries were assured that the Planning Commission would support their proposals for adjustments and re-appropriations within the sector to facilitate completion of projects at advance stages of implementation. They were told that “allocated funds would be promptly released and diversion of funds from slow-moving projects towards fast-track projects would be permitted so that projects start benefiting the masses”.

Under the disbursement mechanism approved in consultation with the finance ministry, 20 per cent allocated funds were released in each of the first two quarters and 30pc each in the third and fourth quarters of the financial year. Project-wise released funds (in the case of rupee component) were uploaded on a weekly basis on the Planning Commission’s website to ensure transparency.

As a consequence, total release of funds stood at Rs556bn up to May 15, 2017 that accounted for 85pc of the allocation, of which the rupee release of funds stood at Rs405bn, or 79pc of the rupee allocation compared to the admissible limit of 80pc.

Towards the end of year, the Planning Commission expected that the entire amount would be released and spent. “There is likelihood of over-disbursement of foreign aid compared to the budgeted amount,” the Planning Commission said.

Published in Dawn, May 23rd, 2017

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