September 21, 2008	Sunday	Ramazan 20, 1429

PESHAWAR, Sept 20: The Frontier government has increased by almost 120 per cent its official rates for carrying out civil works, making adjustments in Composite Schedule Rates (CSR) in the wake of the soaring oil prices.

The NWFP finance department had notified the new CSR, a set of rates applied for constructions of public infrastructure, last week, an official told Dawn here on Saturday.

The increase in the official construction rates will benefit the contractors, who have been demanding this upward revision in the aftermath of soaring oil prices, but it will almost double the financial liabilities of the NWFP government to achieve its development targets.

The NWFP government had allocated Rs27.146 billion from its own resources for the uplift schemes in the current fiscal year, which now stands insufficient in the face of rising cost of construction, as it had to mobilise additional resources, the official explained.

The official said that soaring oil prices had affected the construction industry the most because of raising cost of material and transportation during last couple of years, adding “Adjustments in the official rates was essential because the contractors were not ready to execute uplift schemes on old rates.”

Following the amendments in CSR there should be no grievances of the contractors, as it had been finalised with their consultation and the new rates were in accordance with the market prices, the official remarked.

With the increase in CSR, last time revised in 2005, the throw-forward liability, the amount required for completion of uplift projects reflected in the Annual Development Programme (ADP), has also been doubled, an official at the planning and development department explained.

Currently, net cost of the projects funded purely from the provincial kitty was Rs100.344 billion, of which Rs23.936 billion had so far been spent.

The official maintained that the government had allocated Rs27.146 billion in the current fiscal year, leaving Rs49.258 billion as throw forward liability that will go further up with the new adjustment in the civil works’ rates, the official maintained.

As per the World Bank formula, the provincial government has to complete a development project within three years since its reflection in the ADP.

The existing liability of provincial ADP was half of the World Bank’s standard - 1.8 years - and it was expected to grow by 2.8 years following the revision of CSR, said the official.

Technically, in terms of planning, the current liability was within limits, but the official opined that if the government failed to mobilise additional resources it will make things difficult in the following years to complete the projects well on time.

The NWFP government had, at the moment, major liabilities in health sector, where the completion of existing projects need Rs10.774 billion even on the basis of old CSR followed by roads sector with liability of Rs9.400 billion, elementary and secondary education with Rs5.469 billion and regional development with Rs5.014 billion.