Projects under PSDP: Ministry tells IMF allocations capped at 2pc
ISLAMABAD: A parliamentary panel was informed on Friday that the Ministry of Planning, Development and Special Initiatives had conveyed to the International Monetary Fund (IMF) that it had imposed a two percent cap – well below the 10 percent proposed by the Fund – on allocations for development projects under the PSDP for 2025-26.
In a briefing to the Senate Standing Committee on Planning, chaired by Quratulain Marri, Federal Secretary for Planning and Member Coordination Awais Manzur Sumra briefed the panel on the IMF recommendations concerning the Public Sector Development Programme (PSDP).
He informed the committee that the IMF had submitted a detailed questionnaire covering multiple areas, including Public-Private Partnerships (PPPs) and Public Investment Management (PIM), both of which fall under the purview of the Planning Commission.
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Addressing the IMF’s proposed 10 percent cap on development funding, Sumra stated that, due to prevailing resource constraints, the PSDP for 2025-26 is focused largely on financing ongoing projects of national importance.
“If we impose a 10 percent cap on development projects, it will not be viable for us,” he said, confirming that a two percent cap has been enforced instead.
He informed the panel that a review of PSDP 2024-25 had led to the closure or completion of 344 projects worth Rs 2.52 trillion, resulting in a reduction of the throw-forward by approximately Rs 2.16 trillion.
He added that while a 10 percent cap on new projects is being stringently followed, the actual burden on the 2025-26 programme is only two percent due to significant throw-forward liabilities.
He clarified that recommendations related to Parliamentarians’ schemes fall under the jurisdiction of the Cabinet Division.
Sumra also noted that the government will continue its strategy of prioritising high-impact, fast-moving mega projects under PSDP 2025-26.
Improvements in the PSDP process are underway, including the adoption of automation tools. Re-appropriations and technical supplementary grants (TSGs) from slow-moving to near-completion and foreign-funded projects are also being facilitated during the fiscal year, in line with authorisation granted by the National Economic Council (NEC).
Discussing the IMF’s Diagnostic Report, he said that the Fund had identified multiple shortcomings, including inadequate project prioritisation, delays, rising costs, and weak protection of allocated funds throughout project lifecycles.
Senator Marri emphasised the need to complete ongoing projects before initiating new ones, in line with earlier recommendations of the Committee.
The ministry also briefed the committee on the Intelligent Project Automation System (IPAS), which aims to streamline the PSDP process through integration and automation, allowing for more accurate budgeting and timely release of funds.
Separately, the National Highway Authority (NHA) briefed the panel on progress regarding the Sukkur-Hyderabad-Karachi Motorway (M-6) and the Karachi-Quetta-Chaman Road (N-25).
The committee was informed that the M-6 comprises five sections between Hyderabad and Sukkur, with two segments – Noushehroferoz-Ranipur and Ranipur-Sukkur – being prioritised in the first phase. Board approval is expected in September 2025.
Expressing serious concern over delays in the M-6 project, the Senator Marri criticised the NHA’s performance and noted that four months had already lapsed without progress.
She warned the Authority against seeking a further four-month extension to finalise the Public-Private Partnership (PPP) model.
She directed the NHA to ensure that work on the project commences by October 2025, cautioning that failure to meet the deadline would prompt the Committee to refer the matter to the Upper House for intervention.
Marri also instructed that the Economic Affairs Division and other relevant departments be summoned to the next meeting for a comprehensive briefing on steps being taken to expedite the project’s implementation.
Copyright Business Recorder, 2025