Projects: Centre facing resistance from provinces

ISLAMABAD: Finance Ministry is reportedly facing resistance from provinces on its proposed plan to scrap 137 non-starter projects and transfer 49 projects with up to 20 per cent progress to provinces, well informed sources in Ministry of Planning, Development and Special Initiatives told Business Recorder.

This plan, according to sources, has been prepared under the umbrella of Special Investment Facilitation Council (SIFC).

Sharing the details, sources said, on October 26, 2023, Secretary Finance, Imdad Ullah Bosal held a Provincial Secretaries of Finance meeting on the issue of development projects wherein he stated that the provincial nature of schemes accounted for 33% of the total PSDP allocation during CFY, which was not sustainable anymore.

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Therefore, he proposed the following arrangements: (i) 137 non-starter projects having zero financial progress to be dropped from PSDP; (ii) funding for the SDGS Achievement Program (SAP) projects to be discontinued; (iii) 49 projects that have made zero to 20% progress to be shifted to the respective provinces; iv) 20 projects with over 80% progress to be completed during CFY through re-appropriation.

Secretary, Planning and Development Division, Awais Manzur Sumra stated that an allocation of Rs. 314 billion had been made for 357 projects of provincial nature in the Federal PSDP for the CFY, including allocation for SDGs and some special projects under the Prime Minister’s initiatives.

He also apprised the meeting that no further funds would be released to the SDGs projects; therefore, no authorisation had been issued by Planning Division for 2nd quarter of CFY.

Finance Secretary Sindh Kazim Hussain Jatoi, who attended the meeting on zoom, stated that Rs. 6.6 billion had already been released by Federal Government to SDGS programs during CFY. Government of Sindh (GoS) had no objection to the decision of Federal Government to discontinue funding of the SDGs projects; however, it had strong reservations on transfer of other individual projects to the province as the province had been badly hit by floods last year.

He stated that the Chief Minister Sindh was also not willing to the transfer of development expenditure to Sindh. He further stated that the PSDP projects were started by the Federal Government itself and included eight ongoing schemes and eleven new schemes; however, no funds had been released during CFY.

He further pointed out that Government of Sindh already had a huge development portfolio of Rs.735 billion including foreign funded projects to the tune of Rs. 266 billion.

He mentioned that the ADP expenditures had already been committed and transfer of federally funded PSDP projects would not be possible at this stage. However, he stated that the matter would be referred to the Provincial Cabinet for decision as ADP had been approved by that forum.

He further pointed out that Finance Division, while deciding on discontinuation of funds for SDGs projects may bear in mind that those projects were a part of international commitments.

Finance Secretary Punjab Mujahid Sherdil, who was also at zoom meeting, stated that PD&SI Division may formally share the list of the projects which were intended to be transferred to the province, with the Planning and Administration of developmental services Board, Government of Punjab.

Theses would be placed before the competent forum, i.e., Provincial Development Working Party (PDWP) and Provincial Cabinet for scrutiny of projects and subsequent decision.

Special Secretary Finance (SSF) Khyber Pakhtunkhwa (KP) Asid Rasheed and the Finance Secretary Balochistan Babar Khan adopted a stance similar to that of Government of Punjab and stated that the caretaker Cabinets would decide after scrutiny of individual projects by the provincial Planning and Development Boards. They; however, stated that their provincial ADPs were already overburdened.

The Secretary of PD&SI Division addressed the concerns raised by the provincial government representatives and assured them that the complete list would be shared with all four provinces by PD&SI Division.

He clarified that the commitment to SDGs remained intact, and the PD&SI Division had a separate unit dedicated to it. The instant discussion revolved around the projects under the SDGs Achievement Program (SAP).

Federal Secretary Finance stated that Federal Government had no objection to the proposal of provinces regarding scrutiny of PSDP projects by PDWPs and Planning and Development Boards. After the transfer of provincial projects to the provinces, the Federal Government will not be concerned about whether the provincial governments choose to continue or discontinue those projects.

Additionally, he clarified that these decisions were made during the SIFC meeting, and the provinces’ concerns along with view point of Ministry of Finance would be presented at the next SIFC meeting for further discussion.

Copyright Business Recorder, 2023