KARACHI (April 24): The Prime Minister of Pakistan, Shahbaz Sharif, chairing a meeting with Sindh Chief Minister Murad Ali Shah, and his team to discuss financial and developmental issues yet to be resolved between the federal and provincial governments.
During the meeting, the Prime Minister instructed Planning Minister Ahsan Iqbal, Finance Minister Mohammad Aurangzeb, and the Secretary of Communication to hold meetings with the Sindh Chief Minister or his team to resolve all the pending issues as a matter of priority. He further stated that he was here [in the Sindh CM House] to resolve all the lingering issues, so that developmental projects could move forward, and financial issues could be resolved. To show his commitment, he announced that the provincial government would receive 150 buses to add to its fleet.
The meeting was held at CM House and was attended by federal and provincial ministers, as well as concerned federal and provincial secretaries and heads of different organizations. The meeting aimed to resolve outstanding issues as soon as possible through discussion.
Sindh Chief Minister Syed Murad Ali Shah through a detailed presentation apprised the issues to the prime minister.
Arrears & shortfall in federal transfers: The Sindh Chief Minister told the prime minister that during 2022-23 the provincial government’s share in the budget estimates was Rs1,078.187 billion against which Sindh received Rs1,050.167 billion showing a shortfall of Rs28.030 billion. He added that in July 2023 Rs4.383 billion and Rs3.801 billion in April 2024 were received but still, the federal government has to release Rs19.846 billion to Sindh.
According to Mr Shah, during the current financial year, 2023-24 (July 2023 to April 2024)the Sindh government’s share as per budget estimates is Rs1,092.416 billion. The Sindh government has received Rs1,009.559 billion showing a shortfall of Rs82.857 billion. At this, Prime Minister Shahbaz Sharif directed federal finance minister Aurangzeb to discuss [shortfall] issues with the Sindh government and resolve them amicably.
Federal Govt Share: Murad Shah said that for the construction of houses for flood-affected people the World Bank funded $ 500 million and the remaining amount was required to be shared by the federal and the provincial governments on a 50:50 basis for two years, Murad Shah said and added that the provincial government has released its share of Rs 25 billion and the Federal Government has yet to release during the current financial year.
The reconstruction of Schools in flood-hit areas costs Rs. 11,917 million, the CM said and added the federal government had assured to bear 50 per cent cost. During the current financial year, the federal government had to fulfil its commitment of Rs2000 million but nothing has been released so far.
Murad Shah said that the Sindh government has negotiated $200 million – IsDB and ADB 400 million with a $40 million Sindh govt share, he requested the prime minister to commit 50 per cent financial burden.
Sindh’s share in federal PSDP-2023-24: The Chief minister told the prime minister that presently only 19 Schemes of Rs144.743 billion were included in PSDP. This year the federal government has allocated Rs53.124 billion against which only Rs. 12.079 billion has been utilised, the CM said and added 11 out of 19 schemes have zero releases to date.
The Federal government asked for schemes to be included in PSDP 2023-24. The Sindh government submitted 55 Schemes but only four were approved and included in the PSDP but not a single penny has been released by the federal government to start the schemes, Murad Shah said.
Mr Shah told the PM that his government has submitted 50 New Schemes of 426.759 billion for inclusion in PSDP 2024-25. He requested the prime minister to allocate Rs. 108.557 billion for 2024-25 so that appropriate work could be executed on them next year.
The lining of the KB Feeder: The CM said that the lining of the KB Feeder project was Rs39,942 million. It has an allocation of Rs3000 million in the federal PSDP but nothing has been released so far.
Hyderabad-Sukkur Motorway (M-6): The PM was told that the construction of 306 km long, 6-lane, access-controlled fenced motorway project/Hyderabad-Sukkur Motorway was originally included in CPEC but deleted without assigning any reason.
The project was approved by ECNEC in July 2020 for Rs165.67 billion revised in May 2021 at the cost of Rs. 191.47 billion. Lastly, the project work was awarded by NHA for Rs.308.194 billion under the PPP mode. “Lately reported that the project has again been scrapped because Concessionaires failed to do Financial Close,” the CM said and requested the prime minister to direct the NHA to undertake the project in the next financial year.
The Minister said that he would discuss the matter with the Communication Ministry and get the matter resolved on priority basis.
Jamshoro-Sehwan Road (N-55): The N-55 project was approved in 2017 for Rs.14 billion. The CM said that the Sindh government was forced to pay 50 per cent cost of the project- which means Rs7 billion which we paid in 2017. “The project however continues to suffer delays as the release of the federal government funds is not sufficient to complete the project,” the CM said.
The Prime Minister directed Chairman NHA to speed up work on the N-55 and report to him. He ordered the release of funds, if pending.
KCR: The CM told the prime minister that on the advice of the federal government, revised feasibility was undertaken in 2023 and shared with the Economic Affairs Division & Ministry of Transport, People’s Republic of China on 4th May 2023.
Murad Ali Shah requested the prime minister to order the concerned ministry to facilitate the Framework agreement for the execution of KCR under the CPEC. He also requested the prime minister to direct the Ministry of Railways to hand the Right of Way (RoW) of KCR to the Government of Sindh. At this, Prime Minister Shahbaz Sharif directed Planning Minister Ahsan Iqbal to take up the KCR project and remove all the impediments in its way so that it could be executed.
150 buses: Minister Transport Sharjeel Memon requested the prime minister to provide 300 buses for Karachi. The prime minister said that the federal government would provide 150 buses to the Sindh transport department to add them to their fleet.
Lyari Expressway: The CM said that the Lyari expressway project is a 16.5 km, two-lane dual carriageway on the Lyari River banks. The project was originally designed for heavy traffic, but it is being used for light traffic only.
Mr Shah requested the prime minister to direct NHA to allow heavy traffic on Lyari Expressway to ease traffic congestion in the city. The PM directed the NHA to resolve the issue andreport his secretariat.
Projects awaiting CDWP/ECNEC approvals: The CM told the prime minister that various projects that were being launched with the assistance of the donor agencies were pending in the federal government for approval. The projects he brought in the knowledge are as follows:
• PC-1 for K-IV Augmentation Works of Rs. 52 billion was submitted to the planning commission in June 2022 for CDWP. The PC-1 was resubmitted after compliance with observations. The CDWP cleared the PC-1 in August 2023 for ECNEC but authorization for the project is still awaited.
• The Sindh School Rehabilitation Project under the Flood Restoration Program of $275 billion is pending for issuance of Authorisation by the Planning Commission.
• Competitive and Livable City of Karachi (CLICK) of Rs58,953 million is pending for CDWP from August 2023.
• Sindh Barrages Improvement Project, Phase-II – Rehabilitation and Modernization of Sukkur Barrage and Remaining Works for Rehabilitation and Modernization of Guddu Barrage of Rs74,618.340 million is pending issuance of Authorisation.
• Solid Waste Emergency / Efficiency Project of $105 million is also pending with the Planning Commission for CDWP since March 2024.
PPP Project: The Prime Minister lauded the Sindh Chief Minister Syed Murad Ali Shah for establishing one of the best Public Private Partnership (PPP) Units in Sindh which has executed 10 projects of Rs62,412 million, its five projects of Rs142,467 million at the advanced stage and 10 other projects of Rs267,000 million have been kicked off for investor solicitation. He not only clapped himself for Sindh chief minister got the claps from all the participants for Murad Ali Shah.
At Source deduction: The CM told the prime minister that in June 2016, FBR attached and deducted Rs 5.427 billion in an Ex parte decision on account of Withholding Tax on an incorrect Newspaper’s news. He added that his government appealed in different legal fora of FBR for more than 4 years and finally got an order on 29th Sept, 2020 wherein an amount of Rs 421 million was charged as a liability while Rs 5 billion was declared for refund but never refunded.
Thereafter, the Sindh government took the matter to CCI. Consequent to the CCI meeting held in November 2020, Rs 1 billion was refunded by FBR while in a subsequent order of 19th March 2021, remaining amount was adjusted against the demand of different years (2015-18).
After eight years of unnecessary litigation, the Sindh government has won all appeals in the Court of Commissioner (Appeals) and the claim of FBR was set set-aside and deleted in March 2024 in five appeals reinstating the claim of the Sindh government of Rs 5.427 billion. Out of it, Rs 1 billion has already been refunded.
Murad Ali Shah requested the prime minister that Rs 4.427 billion be refunded to the Sindh government along with the applicable interest rate from 14th June 2016 till the day it is credited to the Sindh government. He added that an interest on Rs 1 billion be paid from 14th June 2016 to 25th January 2021.
The chief minister said that FBR should make its own arrangement from 1st July 2024 to collect Withholding Tax and CVT because the provincial Excise & Taxation department could not be its Withholding Tax and CVT collecting agent. At this, the prime minister directed the Chairman FBR to resolve all their issues with the Sindh government.
