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April 30, 2020

Govt to launch public-private partnership authority for development

Business

April 30, 2020

ISLAMABAD: Government has decided to hand over development of some mega projects for the next fiscal year to a proposed public-private partnership authority (PPPA) in a bid to free up resources for overcoming the virus fallout, it was learnt on Wednesday.

The government would launch the authority for PSDP-plus from the next budget to hand over 30 to 40 mega projects, keeping in view the limited resource envelop available from public exchequer in post COVID-19 scenario, according to people familiar with the matter.

Rules of PPPA need few months to be framed. Minister for Planning Asad Umar directed the authorities to come up with rules to make the body functional within three months, they said.

Umar, chairing the 7th meeting of the PPPA board, directed the officials to constitute a human resource committee to resolve the matters related to employees and compensation on priority basis. The minister underscored a need of well-structured public private partnerships to attract more investment and increase their efficiency. He directed the railways officials to discuss Karachi Circular Railway and other projects, separately in detail.

The objective of public sector development program (PSDP) plus is to kick-start projects under PPP. However, the PPP idea proved non-starter in Pakistan, because there are certain lacunas in the way for luring investment from private sector and without removal of stumbling block it would remain just a pipedream that would never be materialised.

The government earmarked Rs250 billion for PPP. There is a need to analyse how many projects have been converted from files to ground as reality before moving ahead because the private sector is really shy to join hands with public sector keeping in view cumbersome process as well as fear of the National Accountability Bureau.

Sources said ministry of finance would not hold priorities committee meetings with ministries/divisions to finalise their respective current expenditures. The government took a decision in principle to freeze the current expenditure in the next fiscal year’s budget. The ministries/division would only be provided additional current expenditures requirement keeping in view salary increase and utility bills incorporated by the government for the next fiscal year, they said.

Sources said the ministry of finance revised down the proposed funding for next fiscal year’s PSDP as the federal cabinet approved budget strategy paper with proposed allocation of Rs600 to 700 billion for development purposes. But, now the ministry of finance shared indicative budget ceiling with the ministry of planning for development outlay of Rs530 billion for execution of projects in the next fiscal year. There would be another bloc allocation of Rs70 billion under direct supervision of ministry of finance such as allocation for temporarily displaced persons.

Sources said the ministry of planning and its offices were closed for disinfection. It would now discuss in details how to fulfill the increased financing requirements considering resource constraints.

The Planning Commission has not yet decided whether or not it would hold meetings of priorities committees for development budget with the ministries and executing agencies in the current fiscal year.

However, Planning Commission Deputy Chairman Jehanzeb Khan apprised the ministries/divisions and departments that no un-approved projects would be made part of the next fiscal year’s PSDP. The ministries were directed to forward only approved projects for incorporating into the next PSDP document.