‘IMF wants full utilisation of federal, provincial development funds’

Updated 08 Feb 2020

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Asad confirms not attending ECC meetings chaired by finance adviser. — AFP/File
Asad confirms not attending ECC meetings chaired by finance adviser. — AFP/File

ISLAMABAD: With just 27 per cent actual expenditure in first seven months of this fiscal year, the International Monetary Fund (IMF) on Friday asked Pakistan to make full utilisation of development budget at the federal and provincial levels to support struggling economic growth.

Minister for Planning, Development and Special Initiatives Asad Umar told a press conference after a meeting with the visiting fund delegation that the IMF was asking for maximum efforts to fully utilise the allocations made for the Public Sector Development Programme (PSDP).

Responding to a question, the minister indirectly confirmed his unease with working under the Adviser to the Prime Minister on Finance and Revenue Dr Abdul Hafeez Shaikh. Asked if he was attending meetings of the Economic Coordination Committee (ECC) of the Cabinet, Umar replied in the negative. “I think I cannot make any value addition to the ECC,” he said when asked why?

Umar is reported to have attended just a couple of meetings of Dr Shaikh-led constitutional committees since he was re-inducted into the federal cabinet on Nov 19 last year, according to senior officials regularly attending such meetings.

Meetings presided over by Dr Shaikh and also attended by Mr Umar included the Cabinet Committee on Energy and another of the Executive Committee of the National Economic Council (Ecnec). Umar was removed as finance minister in April 2019 and replaced by Dr Shaikh as PM’s adviser.

Asad confirms not attending ECC meetings chaired by finance adviser

The planning minister said the Planning Commission had lost its relevance and importance over the years in driving the country’s policy and planning direction, among other reasons, due to IMF programmes as the focus shifted to the Q-Block, the seat of Ministry of Finance. He said the prime minister wanted the commission to revive its past glory under the likes of Dr Mehbul Haq.

Therefore, the Planning Commission was finalising a set of new priority initiatives in addition to its usual role of project planning, approvals and so on. The new targets until June this year in this direction would include the launch of a three year Economic Growth Strategy 2021-23 on the directives of the prime minister as the government wanted to take the country towards growth momentum in next fiscal year. The planning commission’s revitalisation strategy would also be developed before June this year.

He said the project development, monitoring and evaluation system had weakened over the years and would be revamped by June 2020, followed by enhanced focus on SDGs implementation so as to improve the living standards of the people in line with international commitment. He said a summary had already been moved to the prime minister for creation of a national executive committee comprising the federal and provincial governments for effective monitoring.

Another six-month target include establishment of a Construction Industry Development Board (CIDB) at the Planning Commission for incentivising various services and expertise in the construction sector and ultimately shift it to the Ministry of Housing.

He said the Public-Private Partnership Authority (PPPA) had been a rudderless ship without relevant staff, rules and regulations and a full time chief executive and it would be fully operationalised within six months. He said he would like to ensure that government released the number of projects to be executed through the PPP mode along with their estimated cost as part of the next year budget as the PSDP details are released.

On China-Pakistan Economic Corridor, the minister said a new joint working group on science and technology would be created this year besides holding of Gwadar Expo 2020, initiation of incentive package for special industrial zones and ground breaking of Rashakai zone next month.

He said the two countries had agreed to facilitate third party participation in CPEC last year and a proper framework to actualise third party investments would be finalised before June besides creation of a business forum for interaction of businessmen under the CPEC framework.

Mr Umar said a recent report of the prime minister’s inspection commission revealed 191pc cost overruns of all projects on average which meant a Rs100m project was being completed at a cost of Rs291m due to 6-8 years of delays.

Responding to a question, the minister said the actual PSDP expenditure in first seven months has always remained between 21-28pc of the budget allocation since 2014-15 and full year utilisation ended up between 83-96pc except 2017-18 when it stood at 66pc.

Based on that ratio, he expected 100pc utilisation this fiscal year of Rs701bn allocation as 7-month actual expenditure stood at 27pc. He said a total of Rs188bn had been actually spent on the development projects this year as of end-January against Rs429bn authorised for disbursement by the Planning Commission. He said Rs87bn were utilised by the executing agencies by November and Rs101bn were disbursed since he assumed the planning portfolio.

Secretary Planning Zafar Hassan said about 1,034 projects were part of the ongoing PSDP and 171 of them would be completed by end-June 2020 this year.

Responding to a question on Main Railway Line (ML-1) from Karachi to Peshawar, the minister said the $9bn or Rs1,500bn worth of project required a serious due diligence because it involved a huge public money. He said he was himself a strong supporter of the developing railway infrastructure that had been neglected over the decades as a lot had already been invested in road sector.

He said the feasibility study of the project had been completed that had been shared with the World Bank for a review. He said the WB consultants would submit their report in the second half of current month on the basis of which the government would determine if the project structure being followed was advisable. He said the further progress on the project was expected by April this year.

Published in Dawn, February 8th, 2020