Govt to spend Rs250bn on infrastructure next year

[ziaulislam]

KHALEEQ KIANI — UPDATED about 9 hours ago
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—APP/File
ISLAMABAD: The government has decided to allocate over Rs250 billion for infrastructure sector including energy and transport in budget 2015-16 that would have an overall Rs600bn development outlay.

This was stated by Minister for Planning and Development Ahsan Iqbal at a news conference after a consultative meeting on budget presided over by Prime Minister Nawaz Sharif on Thursday.

Responding to a question on members of the ruling family approving development projects, Mr Iqbal said the parliamentarians had recommended projects worth Rs400bn for inclusion in the Public Sector Development Programme (PSDP) which was not possible at this stage. Therefore, a committee of parliamentarians comprising Captain Safdar and Hamza Shahbaz Sharif had been constituted to select high priority projects proposed by the parliamentarians.

“China-Pakistan Economic Corridor (CPEC) and energy sector would be given top priority in next year budget with an allocation of Rs250bn to achieve progress on these areas”, he said, adding the finance ministry had given a development envelop of Rs580bn for next year, but efforts would be made to increase it beyond Rs600bn.

He said the major challenge was to also carry on with the existing portfolio of ongoing development projects. He said a review of the ongoing projects was currently in progress to ensure that ‘high priority projects’ are accelerated and some less important projects be slowed down. “It’s a tough call but we are trying to balance out the challenge”.

He said the Planning Commission was currently in talks with various ministries and would be tough with those who had included unapproved projects in current year’s PSDP with the promise to complete formalities during the course of the year, but failed and caused loss to the nation.

Along with this, the political uncertainty created by sit-ins had also affected the development and investment climate while a ban on fresh recruitment had also slowed down utilisation of funds over the last 10 months.

He said the disbursements for development projects had paced up in the second half of this fiscal year and about 74pc allocations had now been disbursed.

The minister said some ministries had also been asked to surrender their savings so that funds be withdrawn from unapproved projects and be re-appropriated to priority projects. Against an allocation of Rs545bn, hopefully the PSDP utilisation would touch Rs500bn by end of this fiscal year, he said.

Responding to a question, the planning minister said the government had decided to set up LNG-based power projects in Punjab through PSDP allocations because if these projects were offered to the private sector, the required tendering process would make its timely delivery impossible.

He said the commercially viable projects in the LNG sector would be started in the public sector immediately with initial allocation of Rs74bn for next year while some of these projects could also be offered to the private sector going forward.

He explained that except for LNG projects and an ongoing coal-based project at Jamshoro being developed with Asian Development Bank assistance, no other power sector project would be funded from the PSDP.

The minister said the second priority for development budget was to ensure that critical ongoing projects be protected and completed within a year.

For example, he said projects like Lowari Tunnel, N-85 road project, Jamshoro Power project, Neelum-Jhelum Project be completed within the next fiscal year and Diamer-Bhasha Dam and Dasu hydropower projects be advanced next year.

Responding to a question, he said the federal government had not contributed even a single rupee in Rs165bn Lahore Orange Line Rail Mass Transit Project or the metro bus project in Rawalpindi except for its Islamabad based portion.

On the contrary, the federal government had allocated Rs16bn for Green Line mass transit project for Karachi on the directives of the prime minister who ordered on Thursday to release 50pc share of K-4 water supply project for Karachi immediately.

Published in Dawn, May 15th, 2015

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[ziaulislam]

lets hope the two key projects are started atleast by 2018.
its not going in third fiscal year of 2015-2016

lets hope the two key projects are started at least by 2018. making the next govt to scratch therir heads how to complete them. its not going to in third fiscal year of 2015-2016

 

[Kabira]

As I expected they included Bunji 7100mw. Bunji is supposed to cost $7 billion and will generate around 25 billion units/year.

Government fails to expedite work on mega projects
May 12, 2015
MUSHTAQ GHUMMAN

The Water and Power Development Authority (Wapda) is said to have failed to expedite work on mega projects due to hurdles in arrangement of funds and is now engaged in making a case for innovative funding. According to Wapda''s own progress report for December 2014, a copy of which is available with Business Recorder, all projects under way are stalled and very low or no progress has been seen during the last one year due to which projects'' costs are escalating with every passing day.

The prime example would be that of the 969MW Neelum-Jehlum run of the river hydropower project with an initial PC-I cost of just Rs. 82 billion, which has reportedly crossed the Rs. 327 billion mark. Additionally, because of the decision taken in the Kishan Ganga India-Pakistan arbitration and India''s retention of waters in the Nelum arm of the Jehlum river, it would have reduced availability of around 35% against the earlier projected 48%, factors leading to higher cost of production.

The progress report of one year indicates that no progress was achieved during the period while for the first two quarters of financial year 2014-15 progress was just 0.54%. Mangla Dam raising - which had achieved 99.40% progress upto December 2013 - could only add 0.09% progress; and because of non completion, the exchequer has to continue sharing the burden of project office at Mangla, which should have been closed earlier.

Satpara Dam shown as 100% completed in the progress report issued by WAPDA in 2013, has had another Rs. 513 million spent during the calendar year 2014. The controversial and much-delayed Kachhi Canal Project providing Balochistan''s share of Indus waters to its eastern fertile lands started with the original PC-I cost of Rs 31.2 billion which was thereafter revised to Rs 58 billion. Only 6.84 % progress was achieved in 2014 although the project was to be completed in June 2015.

The sources said no required funds are released. Moreover, no top official of Wapda visited the project in the near past. Wapda''s top priority is Diamer Basha, Dassu and the Bunji projects in the first phase. Greater Thal Canal has been shown as completed in December 2013 with an expenditure of Rs. 9.161 billion, but it has had Rs. 30 million more spent on it during 2014, while the project had been handed over to the government of Punjab in June 2010. Rainee Canal achieved a progress of only 3 % in 2014, while the Balochistan Effluent Disposal into RBOD Project saw no progress in 2014. The project seems to be conveniently forgotten. Neelum-Jehlum hydro power project achieved only 15% progress, while the progress on the Golen Gol Hydropower Project was just 0.35%.

According to sources, all the three members of the Authority looking after water, power and finance wings are holding temporary charges and thus are more interested in fortifying their positions, instead of supervising projects. While the Member Water and Member Power has been given permanent charge by the Government, the position of Member Finance is still held by junior finance person of Wapda. Anwar ul Haq, DG Finance, Wapda, who is temporarily holding the charge of a much higher position of Member Finance also faces charges in the old Rs 7.0 billion Wapda sukuk-bond case. He was an OSD for two years and the sukuk case is pending before investigation authorities and the court.

The position of Member Finance in WAPDA is traditionally held by civil servants on deputation from the audit and accounts department and, while exercising due control on expenditure, also have the ability to liaise with the Ministry of Finance for release of funds, etc.

The sources said, Member Finance Arifa Sabohi was instrumental in stopping Wapda''s illegal forays into construction of transmission lines during the tenure of Raghib Shah as Chairman Wapda. Experts consider that the temporary charge of Member Finance to a junior officer was the main reason for Wapda''s inability to arrange for funds to complete delayed projects.

Government fails to expedite work on mega projects | Business Recorder

 

[ziaulislam]

honestly it was more scaristic post, i would be delighted if bunji is started and will give full credit to the govt but so far it seems that highly funded phase 1 projects like dasu will be hard to start before 2018.

DASU and bhasha have been officially pushed to 2017 and bunji there hasnt been even a PC1 .
when there was PPPP govt PML N use to cry on slow work on bhasha dam. well, they are not going to touch it for atleast 3 years in their regime. lets hope they at least start in 4th year. If they start it in final year it will be political stunt and next govt will mostly run out of money to finance it.

other projects likes were either completed/or majorly worked upon by previous government(sitpara,khan, NJ, dubar khora) or government has no intention to start to them(buni etc). and rest f them are iported power project which is suicide idea for country like us for reasons that its expensive.

besides the punjab 5000MW projects, NJ, tarbela i see no projects to be completed or even started in the list

As I expected they included Bunji 7100mw. Bunji is supposed to cost $7 billion and will generate around 25 billion units/year.

 

[Kabira]

honestly it was more scaristic post, i would be delighted if bunji is started and will give full credit to the govt but so far it seems that highly funded phase 1 projects like dasu will be hard to start before 2018.

DASU and bhasha have been officially pushed to 2017 and bunji there hasnt been even a PC1 .
when there was PPPP govt PML N use to cry on slow work on bhasha dam. well, they are not going to touch it for atleast 3 years in their regime. lets hope they at least start in 4th year. If they start it in final year it will be political stunt and next govt will mostly run out of money to finance it.

other projects likes were either completed/or majorly worked upon by previous government(sitpara,khan, NJ, dubar khora) or government has no intention to start to them(buni etc). and rest f them are iported power project which is suicide idea for country like us for reasons that its expensive.

besides the punjab 5000MW projects, NJ, tarbela i see no projects to be completed or even started in the list

Only few months ago they approved Rs101 billion for Bhasha, where is source for delayed to 2017?

 

[ziaulislam]

Only few months ago they approved Rs101 billion for Bhasha, where is source for delayed to 2017?

the current news.
however, i am not going to judge, they havent touched dasu,bunji, bhasha for 2 years. let see about next year.

there have been no tenders which will require 5-6 months so we pretty much safe to assume that project will not start before started around 2016.

a good move politically. they need to complete some infrastructure projects before 2018. working on bhash or dasu now will give them no political points. They can simply get all of the points by starting it just before the election like every govt has done in the past(musharraf, PPPP) and leaving the next govt to scratch their heads

i personally think stopping work on dasu is negligence. the govt want to work on dasu if it gets all the money from somewhere else. for example it tried to convince banks to cover in the remaining 1.28 billion$ required for dasu dam(20 billion/year=128 billion was suppose to come from PSDP, rest from WB, supplier credit).
as it seems bank dont want to invest so dasu has been thrown out even though its 70% funded by WB. see every govt can build a 100% project foreignly funded like tarbela extension as it doesnt cost them a dime. tarbela extension credit should go to PPPP for successfully arranging 100% foreign funding

i may be wrong, its possible govt may allocate money in next budget for bhasha and dasu lets wait and see

Wapda in talks with banks on Dasu project financing - Newspaper - DAWN.COM

 

[farhan_9909]

not enough,we should be spending atleast 7-8billion dollars into infra projects

 

[Tameem]

Responding to a question, he said the federal government had not contributed even a single rupee in Rs165bn Lahore Orange Line Rail Mass Transit Project or the metro bus project in Rawalpindi except for its Islamabad based portion.

This needs to be highlighted for all SS bashers once and for all.

 

[ziaulislam]

This needs to be highlighted for all SS bashers once and for all.

yup it comes under loan from china under federal grantees in the corridor project, this was well known and i dont know think anybody has stated or indicated otherwise.

not enough,we should be spending atleast 7-8billion dollars into infra projects

not possible why?
short answer, courtesy to IMF restriction to limit budget deficit even though countries like india etc are keeping it at 6%
long answer, poor taxation, lack of reforms, loss of half trillion rupees in power sector

the very reason why PML N could achieve growth was due to limited spending under IMF due to limited federal budget allocations

anyone checked their bills recently, honestly i am still paying 12 and 18 rs tarrif.

 

[assas]