THE Khyber Pakhtunkhwa government eyes financial utilisation between 80-100 per cent of the stipulated annual development spending by the end of the current fiscal year.

According to officials in the provincial planning and development department, an overall 50 per cent utilisation ratio was ascertained by the end of the third quarter with industries, water and energy etc. recording 32 per cent, socio-economic sectors (agriculture, food, R&D etc.) 62 per cent and the social sectors (education and health etc.) 38 per cent by March-end.

An official claimed that the ongoing projects are moving according to schedule, adding that almost the major areas, especially the social and economic sector, have achieved their stipulated targets. “It is envisaged that the utilisation ratio of the development budget will remain satisfactory by the end of financial year,” claimed Mr Usman Gul, chief economist of the P&DD.

The ADP size for the current year is Rs85 billion including foreign assistance of Rs16bn, up by 23 per cent from the preceding year. There are 1035 projects with 632 ongoing and 403 new. The share of ADP in the KP budget is 35 per cent.

According to the budget documents, budgetary allocations reflect enhanced priority to income-generating sectors of economy (hydropower generation, oil and gas exploration, tourism, mineral development, agriculture and water). The development of potential growth sectors are being complemented with sizeable allocation of resources to social sectors.

“Productive sectors were allocated Rs10.8 billion, socio-economic 21.3 billion and the social sector 36.8 billion from the total ADP size of 69bn excluding foreign assistance of Rs15bn which comes to 84bn for the year,” he added.

But the allocations for the socio-economic sectors like agriculture don’t match with the official assertions. For example, even though the allocation for agriculture and its related sectors has been increased from Rs1.175bn in last fiscal to Rs1.355bn this year, its share has decreased from 1.70 per cent to 1.59 per cent as percentage to the total ADP outlay.

Most ADP projects are intended to boost regional economy, spur economic activities and bring marginalised districts to the mainstream of development.

The provincial government has prepared a 10-year hydropower generation action plan costing Rs330 billion, according to which, 24 projects would be initiated in KP to generate 2100 megawatts of electricity.

“On April 30, Chief Minister Ameer Haider Khan Hoti inaugurated the Dral Khawar Power Project in Bahrain having a capacity of generating 36.6 megawatts to be completed within three years at a cost of Rs7 billion.

Work on other energy/power projects forming part of the present ADP ( Sharmai hydropower project of 115MW, Matiltan of 84MW, Shushai-Zhendoli 144 MW ) also continues or is shortly to start. All these projects are predominantly foreign funded with only 10-20 per cent local component,” he said.

Mr Gul said the donor’s interest in KP has increased. Also, the major share in foreign aid in 2011-12 is that of grant (79 per cent).

“Through foreign-aided project ‘Livelihood Development’ the government is trying provide on social safety nets. Livestock, dairy development, seed quality assurance, water for all, maximisation of food products/production, and mitigation of climate change impact on all the sectors remain focus of this project,” he added.

“Work on the three other special area development schemes for the backward districts of Torghar, Kala Dhak and Kohistan, estimated to cost Rs4bn, Rs1.3bn and Rs0.9bn respectively, is also progressing smoothly. Several other urban development projects such as construction and remodelling of Southern Bypass at Hayatabad and flyover on Rehman Baba and Bacha Khan Chowk in Peshawar, the Bacha Khan Poverty Alleviation Programme are also continuing in full swing,” he said.

To a question whether the ADP utilisation ratio has been historically low due to corruption, terrorism, financial constraints or lack of capacity of the implementing agencies/departments and whether these and other factors had affected the ADP utilisation this year and to what extent, he said the aggregate utilisation ratio of previous ADPs usually remained at 50 per cent at the end of the third quarter but it increased in the last quarter with an aggregate utilisation ratio of 80-100 per cent at the year end.

“Local ADP utilisation remained very good, except for donor funding and federal pledging for its vertical programmes, which sometime causes delay and resultantly ADP utilisation suffers. But we do not anticipate any such issue for the current ADP,” he added.

However, the economic growth strategy paper prepared by KP says, poor infrastructure, low human resource base and skills levels, high insecurity, unreliable supply of utilities i.e electricity, communication and water and weak public-private collaboration are hampering development and entrepreneurial activity in the industrial and value added sectors of the economy.

According to the cost of conflict report 2009, the total fiscal impact of terrorism amounted to Rs142.2bn. KP’s current expenditure is eating up over 65 per cent of total budget and the salary budget alone has increased from Rs40bn in 2008 to Rs76bn in 2010 mainly for creation of new posts, increase in salaries and intensified rate of retirement.

The strength of government employees has risen from 0.3mn to 0.37mn between 2006-07 and 2011-12, according to official data, squeezing the room for investment in productive and socio-economic sectors.

The provincial ADP, says an official paper, has been skewed towards brick and mortar projects, but deprived soft drivers of growth in productive and socio-economic sectors.

The ADP spending, experts say, is too thinly spread and the concerned departments try to address as much problems as possible in the limited space and money available to it. As such projects are delayed with cost over-runs.

The government should allocate sufficient money to prioritised schemes to ensure their efficient implementation and timely completion.

The completion of Chakdara Bridge, connecting Dir with rest of the country via Malakand, in record time of four months with the help of Pakistan Army shows that delay in development projects can be minimised provided coordination with relevant development agencies is improved for quick implementation.