According to a national media report, billions of rupees of development projects under the National Highway Authority (NHA) have come to a halt due to lack of funds under the Public Sector Development Programme (PSDP) for the third quarter of the FY21.
According to the report, the contractors did not get payments for the last three months due to the aforementioned reason and as a result they decided to adopt a policy of either go-slow or abandoned the infrastructure projects. This includes the ones that come under the ambit of CPEC.
On the contrary, Asad Umer, the Minister for Planning and Development said on Sunday that all the CPEC-related projects were headed towards completion on fast pace.
Schemes affected the most are situated in KP, Punjab and Balochistan.
The government, reportedly, has only released 30 percent of the allocated Rs 119 billion worth of funds. It has made it impossible for the relevant departments to continue with the work and has led to delays in the completion of the projects.
The funds for the third quarter have been released in April. According to the regulations, the ministries are supposed to release the quarterly funds of the relevant departments before the quarter begins. However, in January 2021, which is beginning of 3QFY21, no funds were released.
The common practice in such cases is that either the contractors buy the materials on lease on hope that the funds are released, or otherwise, they slow-down or halt the project altogether.
Recent non-payment by government has led to the contractors going with halting the projects, putting a dent on the infrastructural development plans of the country. As most of these are CPEC projects, they have even more importance as government has sign agreements giving the authorities in China the completion date of the projects.
The main projects said to have been affected are Package-6 Rehabilitation of National Highway & Bridges, Fazilpur; D.I. Khan Lot-3 Ramak-D.I. Khan; Construction of Hakla on M-I to Yarik; D.I. Khan Motorway (CPEC) (Rehmani Khel to Kot Balian), Package-2B; Construction of Hakla on M-I to Yarik D.I. Khan Motorway (CPEC), Yarak-Rahmani Khel, Package-I; Dualisation of Old Bannu Road (Gaandi Chowk to Sarai Naurang), Package-3; Dualisation of Old Bannu Road (Khurram to Krapa), Package-2; Dualisation of Old Bannu Road (Domail to Khurram), Package-1.
It also includes Peshawar Northern Bypass, Packages-2 and 3; Lowari Tunnel, South Access Road, N-45; Lowari Tunnel, North Access Road, N-45; Construction of Khuzdar-Shadadkot Section of Gwadar, Ratodero Road, M-8 Section-IV, Package-III; Construction of black top road Yakmach-Kharan via Dostain Wad Khurmaqai Section-IV
Additionally, Construction of Hakla on M-I to Yarik D.I. Khan Motorway (CPEC) (Pindi Gheb to Hakla), Packages I, II, III, IV and V; Lahore Eastern Bypass, Package-II; Construction of infrastructure and allied work for Metro Bus Services (Peshawar Morr-Golra Morr), packages-I and II; Dualisation of N-55, Petaro-Sehwan Section, Package-IA; and Dualisation of remaining portion of Sukkur Bypass are the affected projects
It is said however, that funds for the third quarter are due to be received by the NHA by the 5th of April (today).
National Highway Authority (NHA), during past one year, has successfully attracted private sector investment with projects worth over Rs 144 billion surpassing the average annual Foreign Direct Investment (FDI) in Pakistan. These projects would produce revenue of Rs391 billion.