PC launches ‘Analytical Review of the PSDP Portfolio’
The report analyzes the current portfolio of investments in PSDP costing Rs4.1 trillion with a view to identify issues hindering its effective implementation.
PSDP contributes towards economic development of Pakistan. Therefore, emphasis has been given on its rationalization in light of its increasing throw-forward of over Rs3.0 trillion of approved projects in backdrop of fiscal constraints.
Speaking on the occasion, Deputy Chairman Planning Commission, Nadeem-ul-Haque said that for decades, we have looked upon the PSDP for the provision of key infrastructure to stimulate vigorous private investment for achieving the objectives of sustainable economic growth.
The PSDP has delivered some key infrastructure such as dams, power stations, roads and universities. Yet sustainable growth has eluded Pakistan.
"With this in mind we are beginning to take a long hard look at the PSDP with view to understanding what is the return on the investment the taxpayers making", he said.
Haque said that PSDP delivery suffers from difficulties like the inadequacies of fiscal policy, weak planning process. PSDP incentives project development but not public service delivery, productivity and no attempt is made to deliver real benefits to the people.
Since outcomes are not monitored or reviewed and because of the continuous pressure to initiate projects, several weaknesses remain in project development and execution, he added.
Nadeem said that it is ripe time to review and rationalize the PSDP portfolio so that limited fiscal resources are leveraged towards viable projects of energy, water, transport and other infrastructure sector, being the primary responsibility of the federal government.
Projects which have positive impact on the economy and society and offer the greatest rates of returns should be financed with priority. To address the above issues, few recommendations are suggested including approve fewer projects, specifically, consider an embargo on approval of projects by DDWP/CDWP and ECNEC except where there is critical need and donors' assistance is agreed and committed.
It suggest that projects that are already part of PSDP ought to be reviewed for deferment until the fiscal space improves and provincial projects should not be financed from federal PSDP.
To reduce throw-forward liability, potential projects may be transferred to private sector with Public-Private Partnership (PPP), or Built to Operate & Transfer (BOT), or Built to Operate & Own (BOO), Particularly Diamer-Basha Dam.
Nadeem Ul Haque said that with our population is increasing at 2 percent annually, there is tremendous stress on our resources and the government does not have the fiscal space for spending on public services given its immense obligations to provide defense, law and order and servicing the outstanding public debt.
He urged the need that in order to move the growth agenda forward, many projects must be privatized or implemented via Public-Private Partnership mode.
APP