Govt to encourage private sector investment in rail, road projects.

Byline: Khaleeq Kiani

ISLAMABAD -- The government has decided to shift most of the infrastructure projects of road and railway sector to the private sector investment instead of Public Sector Development Programme (PSDP) because of shrinking fiscal space in the 12th Five-Year Plan.

'PSDP is not enough for the timely completion of ongoing infrastructure projects and the projects under 12th Five-Year Plan,' said the Federal Minister for Planning, Development and Reform Makhdum Khusro Bakhtyar.

He was presiding over a meeting to review infrastructure projects under China-Pakistan Economic Corridor framework, PSDP-funded projects and the fiscal difficulties.

The government has already scaled down the current year's PSDP from around Rs1 trillion to Rs675 billion under the supplementary budget due to fiscal constraints. It was reported that the government would have to attract private sector investment by formally operationalising public-private partnership (PPP) or offer road and railway projects through Build, Operate and Transfer (BOT) mode.

National Highways and Motorways have been consuming bulk of the share of PSDP funding over the past four years, primarily because of many CPEC-related roads. Last year, the National Highway Authority spent Rs341bn out of PSDP's total spending of around Rs795bn.

The meeting was also attended by Secretary Planning Zafar Hasan, Secretary Communication Shoaib Ahmad Siddiqui, DG National Logistics Cell Maj Gen Asim Iqbal, Engineer-in-Chief of Pakistan Army Lt Gen Muhammad Afzal, Chairman NHA Jawad Rafique Malik, Member Infrastructure Malik Ahmed Khan and senior officials of ministries concerned.

All the participants were directed to consider innovative financing models for private sector investment. It was explained that some major motorway projects had also been developed on BOT model with varying degrees of successes and failures and should be kept in mind while going ahead with fresh financing schemes.

The meeting was briefed about the...