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Administrative Challenges Increase Cost of Development Projects

ISLAMABAD, 24 October 2024: The Prime Minister’s Committee for Planning and Execution of Foreign-Funded Development Projects was informed that the financial constraints and implementation challenges have led to a ten times increase in the volume of throw-forward of Public Sector Development Program.

The Committee met under the chairmanship of Minister of Planning and Development Ahsan Iqbal here on Thursday in Islamabad.

The Federal Minister of Economic Affairs Division Ahad Cheema attended the meeting through video link.

The planning and execution of foreign-funded projects and the need to refine policy guidelines in line with the Economic Coordination Committee’s (ECC) decisions were come under discussion during the meeting.

The Chair stressed that the all projects including foreign-funded initiatives must be completed within the given timeline to avoid cost and time overruns.

The high officials of the Ministry of Planning and Development briefed the committee and highlighted the challenges related to constraints the liquidity resources to implement the allocated development funds.

The officials stressed that there is huge demand of funds for development projects to address during the financial year.

They further told the meeting that the government has allocated Rs1100 billion against the demand if Rs2.900 trillion for Federal Public Sector Development Program during the current fiscal year.

The Rs220 billion were allocated for foreign funding as rupee cover out of total PSDP of the current fiscal year.

There are some studies that the developing country like Pakistan needed at least 3 percent of GDP (almost Rs3000 billion) for Development funds in budget.

They also highlighted the challenges regarding implementation on the projects. The committee was informed that at least 10 times increase in the throw-forward of PSDP due to financial crunch.

The implementation on the PSDP has also huge administrative and implementation challenges.

On the occasion, the Federal Minister Ahsan Iqbal said that the development portfolio is squeezing during the last ten years.

The demand of financial resources has been increasing for development infrastructure. It was also witnessed the governments slash the development budget to control the fiscal deficit.

The EAD was directed by the Chair to come up with a realistic demand of budget which to be discussed with the Ministry of Finance to avail the required funds for the PSDP.

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