ISLAMABAD, Jan 19: A number of ministries and divisions have failed to utilize their development funds during the first two quarters of 2004-05, forcing the authorities to cancel funding for projects whose details had not been submitted to the Planning Commission by December 31, 2004.

Informed sources told Dawn here on Wednesday that a mid-term review of the Rs202 billion Public Sector Development Programme (PSDP) will be conducted on January 26 by the Deputy Chairman, Planning Commission, Dr Akram Sheikh, at a meeting.

The main purpose of the review is to determine the causes of low utilization of funds by the ministries and divisions. The finance division had released 50 per cent PSDP funds during the first two quarters of the current financial year (25 per cent in each quarter) as per the 'cash plan' submitted by the ministries and divisions.

However, the sources said, the failure in utilization of funds "has irked the authorities and the deputy chairman has been directed to give his report to the prime minister on the matter".

There will be a week-long mid-term review of the PSDP during which the ministries and divisions will offer their explanation as to why they could not fully utilize their funds.

The sources said that there was a dire need to improve the monitoring and evaluation of development projects to ensure that funds were fully exhausted in each quarter.

Prime Minister Shaukat Aziz is expected to constitute a four-member committee, comprising independent experts, to ensure transparency and adequacy of development expenditures.

During the last meeting of the Executive Committee of the National Economic Council, presided over by the prime minister, it was decided that 0.01 per cent project cost will be set aside for monitoring and evaluation of development projects. "The issue has been delayed but the prime minister would soon announce a committee to look into the issue" said a source.