Rs77bn cut likely in KP Annual Development Programme

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PESHAWAR: There is a likelihood of the cash-strapped Khyber Pakhtunkhwa government cutting the Rs174 billion Annual Development Programme for the current fiscal by Rs77 billion.

The reason cited by the relevant officials for the possible move is the overestimation of the funds availability.

Of late, the finance department asked the planning and development department to identify the ADP dormant portfolio, which depends on the availability of the funds to be provided by the centre as the net hydel profit arrears and those generated by the uncapping of the NHP.

According to the officials, the finance department sent a letter to the P&D secretary on Jan 29 asking his department to point out the dormant portfolio in case of non-receipt of funds.

The letter, a copy of which is available with Dawn, says the finance department has so far released over Rs82 billion for the 2015-16 ADP schemes

“As the province has not received the corresponding funds from the federal government, the P&D department should identify this portion of the ADP to be made dormant,” it added.

The 2015-16 ADP has a total outlay of Rs174 billion.

Of this amount, around Rs111 billion is for the schemes proposed by the provincial government and Rs30 billion for those suggested by the district governments.

Foreign donors and financial institutions are to contribute Rs32 billion to the programme.


Officials attribute possible move to overestimation of funds inflow


Documents available with Dawn show that dormant portfolio of Rs77 billion was incorporated in the budget making process and P&D department was tasked to identify schemes worth Rs77 billion for the dormant portfolio, which was to be operationalised only the receipt of the corresponding revenues from the federal government and other sources.

An official said the P&D department had so far not responded to the letter.

He said the province was faced with severe financial crunch amounting to about Rs100 billion on account of the NHP arrears and other heads.

The official said the government had estimated to generate Rs14 billion from its own receipts from Rs7 billion in the previous year.

According to him, the government was hopeful of getting Rs17 billion over the uncapping of the NHP from the current Rs6 billion and around Rs52 billion as the NHP arrears. In addition, the finance department also estimated to get Rs14 billion from the building housing schemes and Rs7 billion from the sale of timber.

The official however said the provincial government was not in a position to meet that large monetary gap and therefore, the ADP was likely to be curtailed.

He said only respite to the government could come from non-utilisation of Rs30 billion district ADP, which it re-appropriated for the provincial projects.

Another source said the government was desperately trying to get its arrears and uncapped amount from the federal government but it was an unlikely scenario.

He said towards the end of the January KP finance minister and other officials held a meeting with the federal government officials in Islamabad to urge them to release province’s money.

The source, however, said as for the uncapped amount of Rs17 billion, the federal ministry of water and power has yet to notify a decision in the favor of the province by the Nepra earlier in November.

He said if the issue was raised in the Council of Common Interest, there were little chances of the province winning the case, as the decisions were made at the forum by consensus.

“It is very unlikely that Punjab will agree to this at this forum,” he said.

The source said as for the arrears, the KP government was desperately trying to get this amount in one go to avoid the financial crisis.

He, however, said the best scenario would be getting Rs52 billion in at least three installments.

Interestingly, KP finance department on Jan 18, 2015 through a letter copied to all departments and districts across the province had circulated additional austerity measures for the current fiscal year.

The letter of which a copy is available with Dawn had announced the imposing of a complete ban on the holding of seminars and workshops Rs77bn cut likely in KP Annual Development Programme involving government funds in five-star hotels, and the purchase and use of electric heaters and geysers in all government organs excluding hospitals.

The department also issued directions for the principal accounting officers to pay electricity bills on time to avoid late payment charges, curtail phone calls from official and residential numbers beyond authorised limits, and use double sides of papers.

It also directed an immediate halt to all unauthorised vehicles and handing over of the redundant vehicles to the administration department saying no 1000cc vehicle would be used for local general duty.

Another relevant official requesting anonymity said the government was not able to utilise this amount, if it not had to curtail the size of the ADP.

He said the budget was huge deficit budget, which was kept hidden from public and now it was haunting the government. “They are making mistakes upon mistakes and instead of fabricating things should made budgets based on verifiable and credible figures,” he said.

The official said the government should have realised that they could not generate funds for over Rs170 billion ADP.

“The government should do right-sizing and appropriation of schemes instead of hiding its mistakes,” he said.

When contacted, KP finance minister Muzafar Said insisted there was no proposal under consideration to cut the ADP.

“We’ve yet to utilise the amount released for the ADP projects, so it will be premature to say that the province has no funds for such schemes,” he said.

The minister said the situation on the ADP cut would be clear in the last quarter of the ongoing fiscal.”