ECNEC bends to clear two mega projects

The federal government on Wednesday gave an ex-post facto approval to a Rs29 billion road project against its own decision while also relaxing a statutory requirement for conducting feasibility study for another project.

Headed by Finance Minister Shaukat Tarin, the Executive Committee of National Economic Council (Ecnec) took certain decisions, which have raised governance and prudent fiscal management related issues. Ecnec took decisions on four summaries but the Ministry of Finance reported only two in its handout, highlighting increasing lack of transparency in the affairs of the government.

Ecnec gave ex-post facto approval for a Rs28.8 billion up-gradation, construction and widening of Surab-Hoshab Road N-85 (454 km). But the Ministry of Finance did not mention the project in its press statement. The project has already been opened for traffic. Ecnec had decided in the past that it would not give any ex-post facto approvals to the schemes whose cost and scope were changed without first securing the formal approval of the Ecnec, which is an extended arm of the constitutional forum – the National Economic Council.

On the same lines, Ecnec and the federal cabinet have refused to give ex-post facto approval for the development of Kartarpur Sahib Corridor on EPC/turnkey basis phase-I at a cost of Rs16.55 billion.

The Pakistan Tehreek-e-Insaf (PTI) government had allowed Frontier Works Organisation to work on the project. Under the PPRA Rules of 2004, public contracts cannot be given without first ensuring competitive bidding.

But senior government officials maintained that there was no comparison between the road project and the Kartarpur corridor, as in case of corridor scheme the project had been inaugurated without first securing the approval of the PC-I. Under the rules, no public sector project can be started without first getting approval from competent forums like the Central Development Working Party (CDWP) and Ecnec.

Ecnec also approved amendments in the minutes of its meeting held on June 4. In June Ecnec had approved the Sindh Early Learning Enhancement through Classroom Transformation Project at an estimated cost of Rs27.2 billion. At that time, the project approval had been given on the condition of conducting the feasibility study.

But on Wednesday, Ecnec was requested that the feasibility study condition may be relaxed as the project is funded by the World Bank. The Ecnec chairman decided that in case World Bank did its own appraisal, the feasibility study should not be required anymore, said the officials. Pakistan and the World Bank on Wednesday signed the loan agreement for the Sindh Early Learning Enhancement project. The bank is providing $100 million loan. Ecnec also amended its earlier decision regarding establishment of University of Applied Engineering and Emerging Technologies (UAEET), Sialkot, to pick half of the Rs16.7 billion cost.

The finance ministry reported that Ecnec discussed the Attabad Lake Hydropower Project at a cost of Rs25.4 billion. The project envisages construction of 54MW hydropower project located on the bank of Hunza River, towards downstream end of Attabad Lake. The energy generated from the above project will be transmitted to the load centres in Hunza Valley.

“After due deliberations, the committee directed the government of Gilgit-Baltistan and Water and Power Development Authority (Wapda) to work out an updated proposal ensuring sustainability of the project and present before the Committee for requisite approval,” said the finance ministry. The finance minister stated that development of the Gilgit-Baltistan is a top priority of the government. After including all the auxiliary cost, the per unit power generation cost comes to Rs10, which Ecnec observed was not viable. The official handout stated that the Ministry of Planning and Development tabled another summary regarding Pakistan Optical Remote Sensing Satellite (PRSS-02) to be sponsored and executed by SUPARCO. The satellite will generate very high resolution earth imaginary and designed for service life of at least seven years, it added.

After detailed discussion, the committee directed to present a feasibility report of the entire project to gauge its viability in the long run. The committee further directed to hire independent financial adviser(s) for exploring funding options and strengthening internal financial capabilities. The services of globally reputed technical advisers/consultants may be hired for support in design and procurement, it added.

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