Foreign-funded projects: up to five percent amount of capital cost spent on consultants, experts, Senate told

The Upper House of Parliament on Tuesday was informed through a written statement that up to 5 percent of the amount of capital cost of a foreign-funded project is usually spent on consultants and technical experts in foreign donor projects and $12.9 billion loan agreements were signed with foreign countries for project financing over the next five years.
In a written reply to a question asked by Senator Syeda Sughra Imam in Senate, Minister for Planning, Development and Reforms Ahsan Iqbal stated that the percentage, an amount of capital cost of each project is agreed by all stakeholders and is specifically outlined in the financing agreements. Citing some example, he stated that approximately 5 percent of the loan amount is spent on hiring of foreign or private sector consultants or technical experts for the project financed by Asian Development Bank.
It is agreed that 2 to 4 percent amount of capital cost is spent on hiring consultants, technical experts on French-funded projects. About 2 to 3 percent out of the committed amount is paid to the consultants and technical experts on (KFW) German-funded projects, while usually 2 to 2.25 percent is being spent on consultancy of projects funded by Islamic Development Bank.
It further states that Pakistan Vision 2025 clearly lays out a framework for future development of the country and donors have been asked to start projects according to national agenda. Earlier, due to lack of a coherent development framework in the past, the donors started projects based on their preference.
Replying to a question regarding the amount of loans obtained by the government from the foreign countries, international financial institutions and donors since June 2013, the finance ministry states that 59 loan agreement of $12.9 billion were signed with foreign countries (China, Germany, Japan and Saudi Arabia), International Financial Institutions (ADB, World Bank, IDB, EIB, SCB-London, SUISSE AG, UBL, ABL and Opec Fund), as well as bonds of $2,000 million were issued from June 2013 to June 2014. These loans were obtained for budgetary support, import of commodities and financing the projects of national importance. Minister for Commerce, Khurram Dastagir said the loans were obtained for financing those projects which were requested by the provinces. The amount of the loan would likely to be spent in the next five years.
Senator from Pakistan People's Party, Taj Haider, said that the Planning Division of federal government was ineffective after the passage of 18 constitutional Amendment which authorises the National Economic Council for carrying out planning in the provinces as council members. The federal government was imposing its decisions on provinces, which was unjust, he added. Commerce Minister Khurram Dastagir said that the federal government was not imposing any decision on development side. In fact, it was provinces which proposed to federal government for foreign funding for their development projects.