By Abdul Ghani

Pakistan has finalised a new scorecard-based system for selecting and prioritising development projects, shifting the Public Sector Development Programme (PSDP) from a demand-driven list of schemes towards a priority-based investment portfolio.

According to the Ministry of Planning, Development and Special Initiatives' Monthly Development Update – September 2026, available with Wealth Pakistan, the new Public Investment Procedure and Parameters (PIPP) has been designed to make public development spending more strategic, selective and impact-driven.

The reform follows a comprehensive public investment management assessment that identified weaknesses in project selection, prioritisation and allocation of funds.

Under the new mechanism, federal ministries will no longer simply submit lists of projects for funding. Instead, they will be required to rank projects according to prescribed scoring criteria, after which the Planning Commission will conduct cross-sectoral comparisons to align the final development portfolio with national priorities.

The new approach represents a shift from project lists to ranked and scored proposals, from annual fund distribution to strategic investment decisions, from an expanding portfolio to fewer and better-prepared investment-ready projects, and from isolated project decisions to portfolio-based prioritisation.

Projects will be assessed through multiple lenses, including national priorities, economic viability, technical readiness, climate resilience, social impact, sustainability, private-sector participation and measurable results.

The report says the objective is not to maximise the number of schemes included in the PSDP but to maximise the development impact generated by every rupee of public investment.

Under the new framework, priority will be given to fewer, better-prepared, higher-impact and investment-ready projects instead of continuously expanding the development portfolio.

The system will also seek to protect funding for high-priority ongoing projects, with the report stressing the need to avoid initiating new projects before the existing portfolio is brought under control.

National priority initiatives, strategic and core projects, exceptionally high-scoring schemes and climate-responsive projects will be considered for inclusion under the portfolio-based approach.

Sustainability will also become part of project assessment. The report says every major project should have a credible post-completion sustainability and operations and maintenance plan, identifying both financing sources and institutional responsibility.

The reform comes as the federal government operates a Rs1 trillion PSDP for FY2026-27, including Rs255 billion in rupee cover for foreign-funded projects. The government has already stated that development resources will be concentrated on fast-moving, high-impact ongoing projects amid fiscal constraints.

The PIPP framework formalises that approach by linking future project selection and prioritisation to measurable criteria rather than relying primarily on individual project submissions.

According to the report, the overarching principle of the reform is that every rupee of public expenditure should generate the maximum possible economic and social return, with quality and development impact taking precedence over the number of projects included in the PSDP.

Credit: INP-WealthPk