ISLAMABAD: The government has decided to allocate over Rs250 billion for infrastructure sector including energy and transport in budget 2015-16 that would have an overall Rs600bn development outlay.

This was stated by Minister for Planning and Development Ahsan Iqbal at a news conference after a consultative meeting on budget presided over by Prime Minister Nawaz Sharif on Thursday.

Responding to a question on members of the ruling family approving development projects, Mr Iqbal said the parliamentarians had recommended projects worth Rs400bn for inclusion in the Public Sector Development Programme (PSDP) which was not possible at this stage. Therefore, a committee of parliamentarians comprising Captain Safdar and Hamza Shahbaz Sharif had been constituted to select high priority projects proposed by the parliamentarians.

“China-Pakistan Economic Corridor (CPEC) and energy sector would be given top priority in next year budget with an allocation of Rs250bn to achieve progress on these areas”, he said, adding the finance ministry had given a development envelop of Rs580bn for next year, but efforts would be made to increase it beyond Rs600bn.

He said the major challenge was to also carry on with the existing portfolio of ongoing development projects. He said a review of the ongoing projects was currently in progress to ensure that ‘high priority projects’ are accelerated and some less important projects be slowed down. “It’s a tough call but we are trying to balance out the challenge”.

He said the Planning Commission was currently in talks with various ministries and would be tough with those who had included unapproved projects in current year’s PSDP with the promise to complete formalities during the course of the year, but failed and caused loss to the nation.

Along with this, the political uncertainty created by sit-ins had also affected the development and investment climate while a ban on fresh recruitment had also slowed down utilisation of funds over the last 10 months.

He said the disbursements for development projects had paced up in the second half of this fiscal year and about 74pc allocations had now been disbursed.

The minister said some ministries had also been asked to surrender their savings so that funds be withdrawn from unapproved projects and be re-appropriated to priority projects. Against an allocation of Rs545bn, hopefully the PSDP utilisation would touch Rs500bn by end of this fiscal year, he said.

Responding to a question, the planning minister said the government had decided to set up LNG-based power projects in Punjab through PSDP allocations because if these projects were offered to the private sector, the required tendering process would make its timely delivery impossible.

He said the commercially viable projects in the LNG sector would be started in the public sector immediately with initial allocation of Rs74bn for next year while some of these projects could also be offered to the private sector going forward.

He explained that except for LNG projects and an ongoing coal-based project at Jamshoro being developed with Asian Development Bank assistance, no other power sector project would be funded from the PSDP.

The minister said the second priority for development budget was to ensure that critical ongoing projects be protected and completed within a year.

For example, he said projects like Lowari Tunnel, N-85 road project, Jamshoro Power project, Neelum-Jhelum Project be completed within the next fiscal year and Diamer-Bhasha Dam and Dasu hydropower projects be advanced next year.

Responding to a question, he said the federal government had not contributed even a single rupee in Rs165bn Lahore Orange Line Rail Mass Transit Project or the metro bus project in Rawalpindi except for its Islamabad based portion.

On the contrary, the federal government had allocated Rs16bn for Green Line mass transit project for Karachi on the directives of the prime minister who ordered on Thursday to release 50pc share of K-4 water supply project for Karachi immediately.

Published in Dawn, May 15th, 2015

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