Details of IMF programmes reviewed

ISLAMABAD: An official of the Debt Management Office said Pakistan’s external debt and liabilities have reached USD 92.2 billion till August 31, 2025.

The official of the Ministry of Finance’s Debt Management Office said this during a meeting of the Senate Standing Committee on Economic Affairs, which was held here on Monday with Senator Saifullah Abro in the chair.

The official said that the medium and long term loans share in the external debt amounts to USD 89.1 billion in the external portfolio. The share of multilateral loans in the external debt is USD 42.58 billion and bilateral debt USD 21.82 billion.

IMF shares MEFP with MoF

In a related discussion, the Committee reviewed the details of IMF programs, loans, and grants obtained by Pakistan from the first program till September 2025.

Examining the data presented by the Finance Division and the State Bank of Pakistan, Senator Abro remarked that reliance on borrowing had become a persistent trend rather than an economic necessity, observing that “in our country, it has become a custom to borrow for projects and then mortgage the same projects for further loans.”

He emphasized that borrowing should aim at national self-reliance instead of creating a recurring debt cycle. The Senate’s panel directed the Ministry of Finance and the State Bank of Pakistan to furnish complete bifurcation of loan details from 2008 onward, including utilisation, repayments and interest payments, to ensure transparency. It was further noted that sudden allocations such as Rs90 billion under special funds in the 2022-23 federal budget must be fully explained in terms of source and utilisation.

The committee examined the performance of the National Highway Authority (NHA), Economic Affairs Division (EAD), and other concerned departments regarding on-going foreign funded projects financed by the Asian Development Bank (ADB) and the World Bank, emphasizing transparency, audit compliance, and the need for accountability in public spending.

While reviewing the ADB-financed CAREC Tranches I, II, and III, covering the Rajanpur - Dera Ghazi Khan - Dera Ismail Khan corridor, the Senate’s body expressed serious reservations over irregularities in procurement and evaluation process.

Senator Saifullah Abro termed the case one of the most significant procurement controversies in recent years, noting that despite repeated directives, the local companies failed to furnish complete documentation to the NHA and the committee.

The committee recalled that in its earlier meeting, it had declared the bids for the Rajanpur - DG Khan - DI Khan project technically invalid due to ADB’s failure to submit essential audit and bidding documents, resulting in prolonged delays. It was highlighted that mis-procurement issue, involving an estimated Rs172 billion, required immediate corrective action.

The chairman of the committee directed that all correspondence with the ADB, including the letter issued by the Prime Minister’s Office, be shared with the committee, emphasizing that guilty officials must be held accountable. He further noted that despite the Prime Minister’s instruction for an inquiry within seven days, no tangible progress had been reported.

The committee was informed that the mis-procurement matter had not yet been sorted and that the ADB’s concurrence was still awaited. The NHA assured the committee that necessary clarifications would be obtained and the required recommendations incorporated.

The NHA further assured that a meeting would be held with EAD regarding the committee’s recommendation to inform the ADB that bids for the ADB CAREC Tranche-III (Rajanpur - DG Khan-DI Khan) Project were technically invalid and had been manipulated due to the mala fide intentions of certain NHA officials and contractors. It was further emphasized that NHA should share its findings with the ADB within coming days and it should not wait for the approval of the revised estimates by ECNEC.

The committee stressed that issues related to land acquisition, delays, and cost escalations under Tranche-III must be resolved to ensure project completion by June 2026. Senator Abro reiterated that the Committee would continue to monitor progress until all irregularities were fully addressed.

While discussing transparency mechanisms, the committee received a briefing from the Managing Director of the Public Procurement Regulatory Authority (PPRA) on the implementation of the e-Pak Acquisition and Disposal System (EPADS). Senator Abro appreciated the progress made in Punjab and directed that Balochistan should also adopt the system to prevent manipulation in the tendering process. He emphasized that loan funds belong to the people of Pakistan and must be spent for their benefit.

Expressing concern over irregularities in Sindh’s tendering processes, the chairman of the committee noted that Sindh Public Procurement Regulatory Authority (SPPRA) had issued several letters this year to train officers on EPADS.

Most major departments in Sindh are already using EPADS, except for the Irrigation Department and the Works and Services Department, which have deliberately avoided adopting the system. SPPRA initially issued a letter allowing the manual tendering process to continue until May 30, 2025, after which all tenders were to be processed through EPADS.

However, the committee was surprised to learn that SPPRA issued another letter on September 17, 2025, stating that these two departments would not adopt EPADS and extending the deadline for manual tendering to October 21, 2025. The chairman of the committee shared that projects worth Rs. 30 billion had been submitted for tendering by October 20, 2025.

He described the situation as alarming and recommended that PPRA obtain the relevant records from SPPRA. He also suggested referring the matter to the FIA for further investigation. Senator Kamil Agha proposed that PPRA introduce legislation to make EPADS mandatory for all departments across the provinces.

The committee also reviewed the Sindh Solar Energy Project (SSEP) funded by the World Bank and the Sindh Road Sector Projects financed by the ADB. Senator Abro expressed serious concern over procedural lapses and verification gaps in both initiatives.

Regarding the SSEP, he noted discrepancies in the data of 200,000 household beneficiaries, with instances of duplicate entries and incomplete validation. The panel’s chairman directed the department to submit verified beneficiary lists from all districts within ten days, along with clarification on the additional list of 400,000 beneficiaries reportedly provided by the Benazir Income Support Programme (BISP).

He further questioned the involvement of non-governmental organizations in project execution, directing that all agreements, payment details, and service charges be disclosed, with a proposal to rationalize NGO service fees by up to 50 percent. The committee also sought complete details of imported and locally manufactured equipment, including solar panels, fans, and components supplied by the contractor, and directed that EAD to verify tax deductions from FBR in this regard.

Reviewing the ADB-funded Sindh Road Sector Projects, the committee noted that while the loan was approved for 400 kms of road works, nearly 724 kms had been undertaken, exceeding the approved scope.

The chairman observed striking similarities in bidding patterns across 17 contract packages, raising concerns of possible collusion. He directed the submission of comprehensive bidder records, prequalification criteria, and turnover histories, and proposed that EAD representatives may attend future bidding processes of these projects to ensure transparency and fairness.

He also recommended EAD and its concerned department (Works and Services department, Government of Sindh) to provide the average annual turnover of all qualified bidders for the project.

Copyright Business Recorder, 2025