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THE annual development spending in Khyber Pakhtunkhwa has witnessed an unprecedented growth over the last decade while public investment suffers from inefficiencies and unsound planning.
Official statistics show that the Annual Development Plan (ADP) has risen to Rs85.141 billion in the current fiscal year from Rs8.71 billion in 2002.
While high inflation and rupee depreciation have contributed to the surging nominal value of ADP, the democratic governments are far more focused on uplift programmes.
But neither the successive clergy nor the incumbent nationalists-led coalition have addressed the structural issues that undermine the outcome of public investment.
Then the government’s focus is on creating new assets rather than keeping the existing social and physical infrastructure in good condition.
Efficiency and quality of service delivery in education, health, drinking water-—the three main components of the social sector— is linked with higher revenue mobilisation because growth in incomes is essential to run the existing infrastructure efficiently.
For ensuring a balance between spending on new asset creation and maintenance of existing ones, the government’s policies have failed to take the O&M component into consideration while spelling out its development priorities.
The quality and efficiency of service delivery will suffer more because of current trend of squeezing the operation and maintenance budget. Hospitals without medicines, schools without consumables and depleted roads are some of its glaring examples.
Data of the Financial Management Information Unit (FMIU) of the Finance Department show that the government used to spend 30 per cent of its current budget on O&M in 2001-02,
that has dropped to less than eight per cent.
The government needs to integrate the current and development budgets for better outcome. The public financial management is also marred by issues in selection of projects and post-approval escalation costs. Unapproved schemes have also been made part of the ADP programme.
Block allocation in the ADP provides the chief minister the sole discretion to initiate any scheme in any district of his choice without established criteria for project selection. The ADP funds are spread thinly over a large number of projects, which in turn delays the completion of projects.
Cost escalation is another issue which even has been institutionalised. A 10 per cent buffer (escalation) is allowed in cost between project approval and grant of technical sanction.
This becomes inevitable because the procedures, involved in project planning, approval and hiring the contractors to execute a scheme, take almost a year or so, while the cost of project goes up on account of price inflation.
Apart from deficiencies in planning and implementation stages of the development cycle, monitoring and supervision is worse.
Monitoring of projects is a neglected area.
Ideally, line departments can check the quality of work in the field while the provincial inspection team also does conduct inquiries to examine the quality and observance of the standards.
But these arrangements have proved inadequate mainly because they are focused on a few big schemes. There is no such system for the public sector schemes at district and tehsil levels.
Recently the provincial government had set up a new directorate of Monitoring and Evaluation as a subordinate agency of the Planning and Development Department. But there is no visible impact as yet.
