Muneeb ur Rehman

Leakages and inefficiencies are plaguing the projects being executed under the Public Sector Development Programme (PSDP) in Pakistan that eventually result in suboptimal outcomes. Therefore, the adoption of the Public-Private Partnership (PPP) model can help reduce leakages in the projects by leveraging the efficiency, expertise and investment of the private sector, leading to more transparent and accountable project management. Talking to WealthPK, Nadeem ul Haque, former deputy chairman of the Planning Commission, said that the effective implementation of PSDP was crucial for Pakistan's socioeconomic development. "The leakages often result from a lack of transparency, accountability, and inefficient management of public funds. Factors contributing to leakages include corruption, mismanagement, and inadequate monitoring and evaluation mechanisms."

According to the Pakistan Economic Survey FY23, development expenditures increased by 0.9% and stood at Rs1,060.4 billion during July-March FY23 against Rs1,051.1 billion in the comparable period of last year. An amount of Rs87.055 billion (11.97% of total PSDP) was allocated for 76 water sector development projects/studies. Haque added that public funds alone may not be sufficient for large-scale development projects. "The private sector can provide additional financing, reducing the reliance on government budgets and thereby mitigating financial leakages." "Private sector partners often bring expertise and innovative technologies to the table, which can result in improved project quality and cost-effectiveness. They have a track record of successful project execution in various sectors, which can benefit PSDP projects as well."

Haque suggested that the PSDP projects should be designated for potential PPPs, wherein the specific objectives, targets, and timelines should be established through collaborative discussions involving all relevant stakeholders. It will, in his words, help economic growth through an enhanced multiplier effect of the PSDP. "The fundamental issue with PSDP is the absence of comprehensive sectoral planning. Instead, the focus remains on isolated, disjointed projects, often lacking a thorough evaluation of costs and benefits, which is notably downplayed by both government and donor entities," he lamented. "An active private sector with significant cash reserves is actively seeking lucrative investment opportunities in Pakistan. Through the active involvement of the private sector, the projects can be completed on time, thereby minimising the chances of delays in payments on the part of the government," he said.

Credit: INP-WealthPk