ISLAMABAD: Ministry of Planning, Development and Special Initiatives (M/oPD&SI) has reportedly decided to release funds for development projects for fourth quarter of 2021-22 on the basis of available fiscal space and utilization of earlier release funds as per commitments, well-informed sources told Business Recorder.
During mid-year review of PSDP 2021-22, M/o PD&SI undertook field monitoring of 123 important projects (against target of 120) of various sectors to track actual physical progress of the schemes. Likewise, PC-IV/evaluation of 14 projects was undertaken (against the target of 14 projects). During the monitoring, major issues like land acquisition, NOCs, delay in procurement and law & order situation were observed.
M/o PD&SI authorized Rs. 392 billion for first half, ie, 49% of rupee allocation of Rs. 800 billion. As per SAP System, an amount of Rs. 204 billion was reported as rupee expenditure (52% of authorization) up to December 2021. In addition, Rs65 billion was reported by the EAD as disbursement up to December, 2021 against foreign aid allocation of Rs. 100 billion. Thus, total utilization was reported at Rs. 269 billion which is 59% of authorized/disbursed amount of Rs. 457 billion during the first half of 2021-22.
An un-utilized balance of Rs 188 billion is available with Ministries/Divisions against authorized rupee funds to the tune of Rs 392 billion up to 2nd quarter. Zero expenditure was observed on 235 new projects having an allocation of Rs 91 billion including foreign aid of Rs 5 billion.
Rs 900 billion were earmarked in PSDP 2021-22 against throw-forward of Rs 6,604 billion, ie, 14%. The slow utilization of allocated funds may result in cost overrun and increase in future throw-forward.
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During the Mid-Year Review, Ministries/Divisions demanded additional funds of Rs 258 billion for fast moving projects under their on-going portfolios as well as un- budgeted new projects. Major demand of Rs. 164 billion for “Karachi Coastal Power Project (Unit 1 & 2) emerged whereas, savings of Rs. 38 billion have been indicated by Ministries/Divisions.
The forum headed by Deputy Chairman Planning Commission allowed them to meet pressing demands for budgeted fast moving projects from available savings through re-appropriation whereas additional demands of important un-budgeted projects would be considered from indicated savings available under over-all PSDP once committed utilization certificate of respective allocation is received from concerned Ministries/Divisions for which they have already been requested.
During FY 2021-22, about 326 projects costing Rs. 486 billion have been reported to be completed by June 30, 2022. The balance cost of Rs. 89 billion has been provided for these projects in PSDP 2021-22. Besides, Ministries/Divisions are being urged to complete even greater number of projects by providing required funds through re-appropriation during the year.
Performance of the Ministries/Divisions has been classified into four categories in terms of utilization achieved (as per SAP System) vis-à-vis authorized funds till December 2021, ie, good performance above 60%, fair performance between 40-59%, average performance from 20% to 39% and below average performance under 20 % of respective rupee allocation.
During the Mid-Year Review, some major issues that emerged are procedural hurdles in tendering and bidding process, delay in award of civil works and contracts, delay in adoption of Asaan Assignment Account regime, revision of certain projects due to defective designs, pending studies at planning stage, lack of professional consultancies, weak institutional and managerial capacity, weak nonexistence of PMUs, land acquisition’ and Right of Way (RoW) issues, delayed project procurement and recruitment, court and litigation cases, enquiries and audit related issues, law and order situation, adverse impact of Covid-19, non-confirmation/non-lining up of foreign assistance for certain foreign funded projects etc. The utilization in case of certain projects remained low due to delay in release of funds by provincial governments to concerned executing agencies/project authorities.
The review forum, invariably, directed the concerned authorities to be proactive in resolving the impeding issues by taking extra measures so as to achieve the envisaged development targets by utilizing optimum funds and completion of maximum number of projects during fiscal year 2021-22.
According to sources, Finance Division issued release strategy for 3rd quarter 20% of rupee allocation on December 31, 2021. In order to ensure targeted utilization and keeping in view the pace of utilization against released funds by ministries, Divisions, slab-based release authorization strategy was issued by M/o PD&SI on January 13, 2022 for 3rd quarter. Whereas, release strategy for 4th quarter would be formulated on the basis of available fiscal space, utilization of earlier release funds as per commitments given by Principal Accounting Officers (PAOs).
Copyright Business Recorder, 2022
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