ISLAMABAD: Pakistan has taken a significant step towards meeting the International Monetary Fund’s (IMF) conditions for a $7 billion loan programme. The government has published project selection criteria, including a scorecard, to prioritize development projects and limit new schemes to just 10pc of the Public Sector Development Programme (PSDP).
This document, if fully implemented, will help reduce political influence for the insertion of new schemes in the developmental framework every year. The government has banned the financing of provincial nature’s projects through the PSDP, but they have been able to include balanced regional projects in related categories so the federal government will continue financing projects of the provinces to promote equity among the provinces. It is yet to be seen how the IMF places increased restrictions to impose a bar on the inclusion of provincial nature’s projects into the PSDP in the aftermath of the 18th Amendment.
Under the agreed structural benchmark for the $7 billion Extended Fund Facility (EFF), Pakistan was bound to develop and publish the criteria for project selection, including a scorecard, detailing the weight assigned to each criterion and the methodology for calculating the score and (ii) the annual limit on the total size of new projects entering the PSDP portfolio till end January 2025. Now the planning ministry has accomplished the assigned task.
The IMF’s technical mission is scheduled to visit Islamabad from January 24 to discuss the Climate-Public Investment Management Strategy (C-PIMA) for one week whereby Pakistan has already made a request for additional $1 billion plus loan facility under the Resilience and Sustainability Facility (RSF).
A 35-page report titled “Public Investment Procedures and Parameters” released by the Planning Commission stated that there will be a limit of only 10 percent allocation for new development projects, whereas 90 percent funds will be utilised for the completion of ongoing projects. It aimed at reducing the throw-forward. The limit on the size of allocation for new projects is aimed at reducing the throw-forward and focus on completion of ongoing, core and foreign funded projects. The above limit will continue till revision.
The Budget Call Circular issued to Ministries/Divisions for preparing proposals for FY2025-26 PSDP also contains the same limit. In addition, a number of other measures have also been taken/ proposed to achieve the objectives of reducing throw-forward in PSDP. These include: 1. On-going projects priority 2. Core projects priority 3. Foreign funded projects priority 4. Priority allocation to ECNEC and CDWP approved projects 5. PC-I phasing adherence 6. Regular PSDP review. There will be 12 parameters and every parameter was given a weighted average to share clear cut instruction to ministries/divisions for the selection of development projects.
Out of 12 parameters, there are seven parameters which have a weightage of 10 percent each so their total weightage would come to 70 percent. It includes alignment with URAAN Pakistan (5Es/5YP) with weight of 10 percent, Foreign funded 10 per cent, Urgency and need 10 per cent, Economic impact 10 per cent, Social impact/SDGs alignment 10 per cent, Environmental sustainability 10 per cent and Fiscal Risk 10 per cent. The remaining parameters having different weightage included Technical aspects 5 per cent, Economic and Financial Return 10 per cent, PPP projects Viability Gap Funds 5 per cent, National level projects 5 per cent and Balanced regional development 5 per cent.