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Thursday October 21, 2021

Rs87 bn allocated for CPEC projects in next budget

ISLAMABAD: Dispelling the impression of slowing down of CPEC projects, Federal Minister for Planning Asad Umar has said the government has allocated Rs87 billion for the Public Sector Development Program (PSDP) for the next budget 2021-22 for execution of CPEC projects.

The National Economic Council (NEC) approved an allocation of Rs42 billion for Western Alignment and Rs6.2 billion for Mainline (ML-1). The government allocated Rs7 billion for provision of basic necessities such as utilities and other infrastructure into the Special Economic Zones (SEZs) at Rashakai, Dhabeji, Faisalabad and Bostan.

“The appetite for making new commitments by Chinese companies is expected to increase, so the financing of ML-1 will now be finalized. The increased circular debt and nonpayment to IPPs had created difficulties which also hindered the ML-1, but now after debt clearing, the Chinese appetite for new investment would improve,” Asad Umar said while briefing newsmen here at the P Block along with CPEC Authority Chairman Lt Gen (retd) Asim Salem Bajwa on Tuesday.

The chairman CPEC Authority said that the Industrial Cooperation Framework was under consideration, which was part of deliverables for the next Joint Cooperation Committee (JCC) under CPEC. The agriculture transformation package announced by the government was shared with the Chinese side, so partnership and match-making between Pakistani and Chinese companies would be done, he added.

While responding to concerns raised by Sindh Chief Minister Syed Murad Ali Shah during the NEC meeting, the minister said the PPP had remained in the federal government four times and provincial government for six times but they had never utilized a penny for motorways in Sindh. He said the PTI government made a payment of Rs90 billion for the Multan-Sukkur Motorway. The federal government provided funding for several projects that stood at Rs93 billion and in the next budget this amount would go up to Rs125 to Rs130 billion, if taking into account of VGF in 2021-22.

The minister for planning said that the federal PSDP was increased from Rs660 billion in the outgoing fiscal to Rs900 billion for coming budget, registering an increase in allocation by 36.4 percent. The provincial allocation of ADPs increased from Rs867 billion in outgoing fiscal to Rs1,202 billion for the coming budget. The minister made a comparison and stated that there was a paradigm change in composition of PSDP under the PTI led government as the allocation of energy, transport and communication stood at 56 percent in the fiscal year 2016-17 but it decreased to 40 percent in 2021-22. He claimed that the government would undertake more road and other projects through public private partnership. The allocation of water sector increased from 4 percent in 2016-17 to 10 percent in 2021-22. The allocation for social sector and regional equalization jumped up from 23 percent in 2016-17 to 31 percent in 2021-22. The allocation for production sectors such as science and technology and IT has been increased from 2 percent in 2016-17 to 5 percent in 2021-22. The Viability Gap Fund (VGF) has been introduced and allocated 7 percent funds in the next budget. The allocation of other projects was reduced from 15 percent in 2016-17 to seven percent in 2021-22.

Asad Umar said the government had so far approved Rs240 billion projects through the PPP mode and another Rs530 billion projects were in the pipeline. He said that the government would bring 300,000 people into commanding areas for using agriculture purposes.

He said the government allocated Rs244 billion for motorways, highways, interprovincial/districts roads, airport, railway projects and 3,261 kilometre length of new roads will be added to the network. Some major projects including Khyber Pass Economic Corridor Project (Rs8.5 bn), Sukkur-Hyderabad Motorway Land (Rs4.6 bn), Eastbay Expressway Gwadar (Rs2.1 bn), Dualization & Improvement of Existing N-50-Yarik-Sagu-Zhob-210 km (Rs1.6 bn), construction of M-8 Hoshab-Awaran-Khuzdar (section-2)168 kms (Rs1.5 bn), improvement and widening of Chitral-Booni-Mastuj-Shandur Road (Rs2 bn), roads linking motorways in Punjab, Main Line I (ML-I) (Rs6.2 bn) and Gwadar Airport (Rs1.1 bn) would be constructed. Umar said tank and weapons don't lead to development, instead inclusive development plays a vital role in bringing prosperity to the country.

He said that the HEC allocation increased to Rs44 billion and 105 universities would get benefit from 120 projects. The scholarships schemes of around 5 billion will benefit more than 6,000 scholars/faculty members.

To a query, he said that the throw forward stood at over Rs5.5 to Rs6 trillion at the moment. The NEC also approved that no new projects would be considered next time after March 31 deadline in order to improve quality of PSDP projects. Meanwhile, the government has decided to procure vaccine worth one billion dollars for Covid-19 for which the ECC meeting today is likely to grant approval.