Islamabad, Sep 18: A further Rs. 196 billion ($664 million) has been asked by the Economic Affairs Division in order to address rupee cover for the effective use of projects funded by foreign governments.
The Division reported to the National Assembly Standing Committee on Economic Affairs in a written briefing on the rupee cover issue that the Division shared at the Public Sector Development Program (PSDP) annual review meeting on September 11, 2024, along with its additional requirements of Rs. 196 billion ($664 million).
Secretary EAD Kazim Niaz briefed the committee, stating that the government has set aside Rs. 350 billion for rupee cover of projects sponsored by foreign entities in the current fiscal year.The Secretary stated, “We need rupee cover for effective utilization of foreign-funded projects,” acknowledging that the rupee cover has decreased as a result of some IMF requirements.
A comprehensive study of the local currency component of foreign currency transactions was provided to the committee, chaired by Muhammad Atif. EAD listed a number of variables that affect how long projects take to complete. Important procedural issues were noted, such as the protracted procedures needed to prepare and approve Project Concept-1 (PC-I) documents, the need for necessary revisions that result in delays and increased costs, the delay in establishing designated project accounts, and a general ignorance of development partners’ requirements.
It was proposed that human resource-related delays may be successfully mitigated by promptly establishing Project Management Units (PMUs) and appointing specialized project directors. The significance of integrating land acquisition, community concerns, and security considerations into project policy frameworks at the provincial and federal levels was emphasized by the committee members. The Chairman committee emphasized that in order to expedite execution and address the root causes of delays, foreign-funded projects must have a strategic plan in place.
The committee resolved to request an in-depth briefing on project policies from the Secretary of Planning in order to develop suggestions that tackle the difficulties related to delays in project implementation. It was underlined that regular procedural problems shouldn’t impede projects of national importance and that improvements are required to enable their prompt advancement in the interests of the country.
In order to expedite the execution of multilateral and other projects, the EAD reiterated its commitment to improve collaboration with the federal and provincial governments. The committee suggested holding separate briefings for every multinational project and inviting the executing agencies to talk about the current state of the project, any problems, and suggestions for quickening its implementation.
The Asian Development Bank (ADB), the World Bank (WB), the Islamic Development Bank (IsDB), the OPEC Fund, and three other multilateral initiatives are currently under the EAD’s supervision.
One with the International Fund for Agricultural Development (IFAD) and two with the Asian Infrastructure Investment Bank (AIIB). These initiatives cover a wide range of industries, including as public sector management, energy, transportation, agriculture, finance, and health.
