Caretakers hiked project costs by 30pc before exit

Just before the end of its tenure, the caretaker government allowed a cost escalation of about 30pc to “ongoing contracts” of hundreds of development projects, financed under the Public Sector Development Programme (PSDP) of the federal government. The country’s large development portfolio has always been subject to time and cost overruns, leading to repeated revisions in financial costs, besides loss of opportunity costs. According to the International Monetary Fund (IMF) estimates for the fiscal year 2022-23, the federal PSDP portfolio of Rs10.32 trillion alone contained about 1,153 development projects. This includes 909 ongoing projects worth Rs7.96tr, coupled with the addition of 244 new projects with a total cost estimate of Rs2.26tr. Against such a large programme, the 2022-23 budget allocated a paltry sum of Rs727.5bn. It is no wonder the IMF believed that this rate of execution required, on average, 14.1 years for a project to reach completion, and that too only if no new projects were started during this time.