Senate panel informed: 98 foreign-funded projects included in FY27 PSDP

ISLAMABAD: The Senate Standing Committee on Planning, Development and Special Initiatives was informed that a total of 98 foreign-funded development projects, with an estimated cost of Rs 8.1 trillion, including Rs 4.65 trillion in foreign assistance, were included in the Public Sector Development Programme (PSDP) 2026–27.

The committee met with Senator Quratulain Marri in the chair at Parliament House on Monday. The committee discussed the allocations for foreign-funded development projects under PSDP 2026–27, with particular focus on rupee cover, reliance on foreign borrowing, project completion timelines and utilisation of domestic resources.

Officials of the Planning Ministry informed the committee that against the demand of Rs 537 billion for rupee cover, the Economic Affairs Division (EAD) had proposed Rs 425 billion after consultation with the concerned Ministries, Divisions and donor agencies. However, they said that the National Economic Council (NEC), while approving PSDP 2026–27 at Rs 1 trillion against an overall demand of Rs 2.9 trillion on June 10, 2026, allocated only Rs 255 billion for these projects due to fiscal constraints and the government’s commitment to domestic financing.

The chairperson sought clarification regarding projects expected to be completed during the current financial year.

The officials informed the panel that projects with more than 80 percent physical progress were expected to be completed during the year.

The chairperson emphasised effective monitoring and timely implementation to achieve the projected targets.

Following this, the chairperson also stressed the need to review reliance on foreign loans, particularly dollar-denominated financing carrying interest and repayment obligations, when domestic resources and rupee allocations were available.

The chairperson emphasised that the financial implications of foreign borrowing should be carefully assessed and that the Government should explore the effective utilisation of local resources to reduce unnecessary dependence on external loans.

The committee reviewed the M-1-related project, regarding which officials informed the committee that completion was targeted for December 2026 or January 2027. The committee emphasised adherence to the proposed timeline and timely utilisation of funds.

The committee underscored that foreign-funded projects must receive adequate rupee cover to avoid implementation delays while ensuring transparency, accountability, prudent financial management and coordination with donor agencies. It emphasised balancing foreign assistance with domestic fiscal capacity and minimising avoidable financial burdens.

The committee also reviewed progress on the M-6 Sukkur–Hyderabad Motorway Project and expressed serious concern over prolonged delays. Officials informed the committee that Sections I and II were being processed under the Public-Private Partnership (PPP) mode, with the concession award targeted for February 2027.

They said that the Asian Development Bank (ADB) was providing transaction advisory services for these sections, while financing arrangements with international development partners had been secured for the remaining sections. Financing of USD 475 million by the Islamic Development Bank (IsDB) for Sections IV and V and USD 230 million by the OPEC Fund for International Development for Section III had been secured. They said that bids for Sections III and IV were under evaluation, while bids for Section V were expected to open in October 2026. Contract awards for Sections III, IV and V were expected in November and December 2026, respectively.

The chairperson observed that the M-6 project had been under consideration since 2017 and questioned repeated postponements despite its strategic importance.

Senator Afnanullah Khan also raised concerns over continued delays and missed deadlines for the M-6 project, stressing the need for timely implementation. The committee discussed the involvement of foreign and local companies in the bidding process and sought clarification regarding the reasons for delays and the status of proceedings before the Grievance Redressal Committee.

The chairperson sought a definite timeline for groundbreaking and directed the concerned authorities to avoid further extensions of deadlines.

In response to a query regarding the commencement of groundbreaking activities for all three relevant sections in the coming year, officials said that this would depend on the completion of the required approvals and formalities.

The committee emphasised timely decisions, transparent procurement and effective coordination to ensure that the project proceeds without further delay.

The meeting was attended by Senators Shahadat Awan, Saadia Abbasi, Dr Afnanullah Khan and Jam Saifullah Khan, along with the Secretary Planning and other relevant officials.

Copyright Business Recorder, 2026