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Power sector suffers due to govt’s apathy

The non-seriousness of the federal government in resolving the energy crisis can be gauged by the fact that out of total of 43 power sector projects envisaged in the last fiscal year’s federal PSDP, part payments were released for only two projects.

According to details issued by the Planning Commission, Rs11.7 billion were released against the allocation of Rs15.5 billion for construction of Diamer-Basha Dam project land acquisition, while Rs333.9 million were released for grid stations in the southern Punjab. “It is the inability of WAPDA to arrange funds that is hampering the planned growth in the power sector projects as rupee component of power sector projects is arranged by WAPDA from its own resources,” an official of the ministry of finance said.

The rupee component of most of the power sector projects was not part of the budget and was not released by planning & development division, the official said, adding that since the WAPDA was unable to generate funds the targets in the sector were missed.

Out of the allocation of Rs32.86 billion in the federal PSDP in 2011-12 for the power sector projects, only Rs12.033 billion were released.

Of the total allocation, the foreign aid component comprised of Rs13.323 billion and the government could not secure even a single penny under this head.

In a recent report, the Planning Commission identified inadequate funding in the last fiscal year and several shortcomings in the identification and preparation, appraisal, approval, execution and completion phases of public sector development programme (PSDP) funded projects.

Though PSDP projects contributed to the national economy, these were not enough in the backdrop of rapidly growing population and consequent increased demand for infrastructure facilities, said a Planning Commission document.

According to details, proper feasibility studies were not undertaken in some projects resulting in weak project preparation while ownership issues between provinces and districts generated sustainability issue during operational phase. Besides, unrealistic financial phasing resulted in delayed, insufficient funding and delayed project execution. Moreover, lack of holistic approach in planning initiated projects with overlapping objectives. In certain projects, envisaged results were not achieved due to weak scrutiny and inaccurate economic analysis.

The Commission has also highlighted delay in contract award, hiring of consultants, problems in land acquisition, inadequate funding, management capability and inefficiency of executing agencies for inefficient project handling resulting into delays.

In addition, due to delayed transfer of projects to recurring budget the cost overruns, the report added.

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