The interim federal government has decided to drop 137 non-starter projects with zero financial progress from the Public Sector Development Program (PSDP) to save allocation of Rs. 116 billion.
Sources told ProPakistani that federal and provincial ministers for finance recently held a meeting to explore the possibility of transferring provincial nature projects funded from federal PSDP to the respective provinces.
It was disclosed in the meeting that the federal government has been funding 357 provincial nature projects worth of Rs. 1,373 billion and the last PDM government allocated Rs. 314 billion in financial resources for the provincial projects in the federal PSDP 2023-24.
The National Economic Council (NEC) in 2021 approved a policy that the federal government will finance the provincial projects in exceptional cases on a 50:50 cost sharing basis. However, the last government violated all the directions to please its coalition partners.
It is pertinent to note that 18th constitutional Amendment and 7th NFC made the provinces more autonomous and financially strong to undertake initiatives in the devolved subjects through respective Annual Development Program (ADPs).
Sources said that the federal government has communicated to provincial finance ministers that funding is not being provided to the important national strategic projects due to resource constraints, which are facing cost/time overruns depriving accrued benefits.
Being the federal responsibility and commitment, substantial funding is being provided to the AJ&K, GB and merged districts of KP despite the resource constraints. Sources said that the interim federal government has decided to drop all 137 non-starter projects with zero financial progress from the PSDP 2023-24 to save allocation of Rs. 116 billion.
In addition, the government has also decided that it will not release further amounts to SDGs Achievement Program (SAP) to save balance allocation of Rs. 29 billion.
Moreover, all 49 projects having financial progress from 0-20 percent may be considered for shifting to respective provinces for further financing through respective ADPs or postponed. This will also save Rs. 29 billion.
Sources said that the federal government will complete those 20 projects with 80 percent plus progress during FY24 on priority through re-appropriations/adjustment and 150 projects having financial progress between 20 to 80 percent may be critically reviewed by provinces and may be completed subject to availability of resources including provincial contribution.