Shortage of Local Funds Cuts Foreign-Funded Projects by Half

For context, the administration has cut funding for foreign-funded development projects by more than half, reducing the allocation from Rs.

Key points

• The decision was documented to the Senate Standing Committee on Planning, Development and Special Initiatives by a team led by Planning Secretary Dr.
• 537 billion in local currency funding, the Economic Affairs Division had proposed Rs.
• Sections I and II are being processed under the public-private partnership model, with the concession award targeted for February 2027.
• The committee additionally reviewed progress on the Sukkur-Hyderabad (M6) Motorway and expressed concern over prolonged delays.
• Senator Quratulain Marri, who chaired the session, sought details of projects anticipated to be completed during the current financial year.

In practice, the decision was documented to the Senate Standing Committee on Planning, Development and Special Initiatives by a team led by Planning Secretary Dr. Tahir Noor.

In practice, the committee was informed that 98 foreign-funded projects, with a combined estimated cost of Rs. 8.1 trillion, were included in the Public Sector Development Programme (PSDP) for fiscal year 2026-27. These projects involve foreign assistance of Rs. 4.65 trillion. FIA Uncovers Rs. 120 Billion Online Gambling Network.

Against a requirement of Rs. 537 billion in local currency funding, the Economic Affairs Division had proposed Rs. 425 billion after consulting relevant ministries, administration divisions and donor agencies. Nevertheless, the National Economic Council approved a total PSDP of Rs. 1 trillion on June 10, against an overall demand of Rs. 2.9 trillion, allocating only Rs. 255 billion for foreign-funded projects due to fiscal constraints.

Senator Quratulain Marri, who chaired the session, sought details of projects anticipated to be completed during the current financial year. The planning ministry team remarked most were anticipated to be completed within the year.

In practice, the committee stressed the need for effective monitoring and timely implementation, particularly for projects nearing completion. It additionally called on adequate local currency funding to prevent delays and emphasized transparency, accountability, prudent financial management and coordination with donor agencies. Govt Wheat Policy Has Failed Again.

Members additionally triggered concern concerning reliance on foreign loans, particularly dollar-denominated financing that carries interest and repayment obligations. While carefully assessing the financial implications of external borrowing, the committee remarked the administration should prioritize domestic resources and rupee allocations where feasible.

Notably, the panel emphasized balancing foreign assistance with the country's fiscal capacity and making better employ of local resources to reduce unnecessary dependence on external loans.

Meanwhile, the committee additionally reviewed progress on the Sukkur-Hyderabad (M6) Motorway and expressed concern over prolonged delays. Planning Secretary Dr. Tahir Noor informed the gathering that work on the project would commence "within months" after the availability of $705 million in foreign financing.

Sections I and II are being processed under the public-private partnership model, with the concession award targeted for February 2027. The Asian Development Bank has agreed to provide transaction advisory services for these sections.

Financing arrangements with international development partners have additionally been secured for the remaining sections, according to the Planning Ministry. Stay Connected with ProPakistani.

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For now, shortage of Local Funds Cuts Foreign remains the part of the story worth watching, and further updates are likely as more details are confirmed.