Adjustment in PSDP allocation: Rs 70 billion more funds demand by ministries rejected

Planning and Development (P&D) Division has turned down various ministries' demand of allocating additional funds of Rs 70 billion over and above the 2007-08 PSDP for a number of development projects and the division decided to allow re-adjustment of around Rs 4.5 billion only for critical projects.
Official sources told Business Recorder on Monday that P&D had recommended to the Finance Division to release around Rs 4.5 billion funds, which were not more than savings in a number projects as they were slow-moving and could not spend the allocation during the first six months of the current fiscal.
These decisions have been taken by the P&D during the recently concluded mid-year review meeting, which approved adjustment in 2007-08 PSDP allocation as some of the schemes were slow moving.
A huge cut has been placed on the allocation of Kurram Tangi Dam, being built in North Waziristan Agency, the sources said, adding the actual allocation for the project in the current fiscal was Rs 2.90 billion, which had been cut down to Rs 850 million.
The sources said that Water and Power Development Authority (Wapda) could not speed up the project's implementation due to some long-standing differences between Central authorities and the former MMA government in NWFP.
Kurram Tangi is an important scheme in water and power sector and is part of President Pervez Musharraf's five dam projects, majority of whose construction is to be completed by 2016.
Apart from this, in water power sector the allocation for land acquisition for hydel projects, including Diamer Basha, Munda, Kalabagh and Akhori dams has been slashed from Rs 2.60 billion down to Rs 2.38 billion. The Water and Power Ministry has reported the project's saving at Rs 130 million.
The additional allocation as demanded by fast moving projects was rejected for the first time in the four to five years or so because the economic conditions of the country are not improving this year.
The analysts are of the view that high oil prices and food inflation have crippled the government capability to keep the development budget un-touched as the regime was under financial burden due to oil and food subsidies.
The allocation for the Ministry of Food and Agriculture project of Land and Water Resources Development Project for Poverty Reduction has been reduced from Rs 2.8 billion to Rs 1.4 billion. However, the allocation of rupees six billion for National Programme for Improvement of Watercourses has been increased to rupees seven billion. The mid-year review meeting allocated Rs 600 million for expanding Utility Stores Corporation (USC) network for the last six months of the current fiscal despite the fact there is no original allocation for the scheme.
The allocation of Rs 400 million for Gwadar Deep-sea Port has been increased to Rs 600 million. The total allocation for 14 projects of Pakistan Atomic Energy Commission (Paec) has been increased from Rs 10.536 billion to 12.16 billion.
Prominent among these projects are Chashma Nuclear Power Project (C-2) and Taunsa-2 Uranium Mining Project whose allocations were increased from 9.14 billion to Rs 10.14 billion and from Rs 1.1 million to Rs 684.2 million respectively. However, allocations for some of the small schemes of the Paec have also been reduced.