Govt to prioritise 106 key PSDP projects in next budget

• Govt planning to create fiscal space of Rs2.5 trillion.
• Aims to complete 276 schemes by end of June 2025.
• Around 52 provincial projects to be given top priority.
  

ISLAMABAD: In a move apparently aimed at boosting development, the federal government has identified 106 critical development projects from the Public Sector Development Programme (PSDP) for making major allocations in the upcoming budget, The News reported on Tuesday.

Although the finance ministry has not yet shared the exact resource envelope with the planning ministry, the decision has been firmed up that the identified 106 highly important projects will be given top priority in the budget for FY2025-26 — of which around 52 are of provincial nature.

The development comes against the backdrop of Minister for Planning Ahsan Iqbal's announcement that the ruling coalition had decided to scrap almost 24% of PSPD development projects — amounting to 262 initiatives out of the total 1,092 initiatives.

The Ministry of Planning is said to have devised criteria for abolishing almost one-fourth of the PSDP projects. To be exact, the ministry is all set to abolish 23.6% of the projects on the PSDP list.

The Prime Minister Shehbaz Sharif-led government, however, plans to allocate a major chunk to complete these projects in the next fiscal year. No new provincial nature projects will be made part of the next PSDP for 2025-26. It has also been decided that the provincial nature projects will be completed by the end of the next fiscal year, June 30, 2026.

The federal government is planning to create a fiscal space of Rs2.5 trillion in two ways, such as the completion of 276 ongoing schemes and the closing down of 168 projects.

The government maintains that it is bringing efficiency to the PSDP by closing down sick projects and ending funding for provincial nature projects, but it continues to fund the highly controversial sustainable development goals (SDGs) programme through parliamentarians.

In the current fiscal year, the government has so far utilised Rs34.9 billion for SDGs schemes out of the total authorisation of Rs48.6 billion in the first nine months (July-March) period of the current fiscal year. So far, the government claims that it has utilised Rs450 billion out of the total authorisation of Rs900 billion.

"Out of a total of 1,071 development projects from the PSDP list, the government is going to complete 276 development schemes by the end of June 2025 with a total cost of Rs1.665 trillion," top officials in the Ministry of Planning confirmed while talking to the publication.

"The government has also decided to close down 168 development projects across four provinces, having an estimated cost of Rs1.1 trillion," they added.

The officials said that a total of 444 projects would be either completed or closed down by the end of June 2025 so there would be no funding requirement for approximately Rs2.5 trillion in the next budget for 2025-26.

The official circles claimed that it would bring efficiency to the development budget and would slash down increasing throw-forward, but insiders believe that it is aimed at creating fiscal space to adjust more new projects by setting priorities devised by the incumbent regime.

The International Monetary Fund (IMF) has bound the Planning Commission to insert only 10% of new projects approved by the CDWP and the Executive Committee of the National Economic Council (Ecnec), so the government is creating a space to adjust its prioritised areas in the list of PSDP.

The government has prioritised 106 development projects with a total estimated cost of Rs7.3 trillion including PM’s Hepatitis Program with a cost of Rs67 billion, IT Park for Karachi Rs31 billion, PhD Scholarships Rs25 billion, Danish School Rs15 billion, Suki Kinari Rs80 billion, Dasu Power Evacuation Rs132 billion, Allama Iqbal Industrial Economic Zone Rs18 billion, Islamabad West Grid Station Rs52 billion, NTDC Sub-station Rs32 billion, Iesco Rs17 billion, Mohammand Dam Rs310 billion, Dasu dam construction Rs51 billion, Tarbella-5 Rs82 billion, Mangla Up-gradation Rs52 billion, Diamer Bhasha dam (power) Rs1,400 billion, Diamer Bhasha construction Rs480 billion, K-4 Rs40 billion, Karachi Water Supply Rs126 billion, Mainline-1 (ML-1) Rs1,900 billion, Thar Coal Rs55 billion and KKH Rs234 billion.