Āl ʿHadid [57:1-2]

Approval Process of Public Sector Projects in Pakistan

by: Engr. Daanyal Umar
LECTURE 04

MS-214 ENGINEERING ECONOMICS (FALL 2019)

Approval Process of Public Sector
Projects in Pakistan
 In Pakistan, identification, formulation, appraisal, approval, implementation, monitoring and
evaluation of development projects is carried out by various ministries, autonomous bodies and
departments at Federal as well as Provincial level.

 Various forums have been set up by the Government for approval of projects at Provincial and
Federal levels and financial powers for such approval have been delegated to ECNEC, CDWP,
DDWP and PDWP.

 The project approving bodies working at various levels are the following:
Executive Committee of National Economic Council (ECNEC)
Central Development Working Party (CDWP)
Departmental Development Working Party (DDWP)
Provincial Development Working Party (PDWP)

Engr. Daanyal Umar, CED, CECOS

Forums for Approval of PC-I/II
Approval Approval Power (Million) Composition
Forum

DDWP Rs. 60 (old) Headed by Secretary of Concerned Ministry with Reps.

of Planning Commission and Finance Divisions as
Rs. 2,000 (2019) Members
CDWP Rs. 1,000 (old) Headed by DCPC with Secretary P&DD, Members of the
Planning Commission, ACS (Dev) of Provinces, Reps of
Rs. 10,000 (2019) Finance, EAD and concerned ministries as members

ECNEC Above Rs. 1,000 (old) Headed by Prime Minister with representatives from
Provinces an concerned ministries as Members
Above R.s 10,000 (2019)
Corporate ECNEC Powers Headed by Chairman of the Public Sector corporation
DWP with reps of Planning & Finance as Members

Source: Planning Commission Engr. Daanyal Umar, CED, CECOS

GENERIC PROJECT CYCLE
PC-V

Identification
Ex-post Evaluation
PC-IV
Monitoring &

PC-I/PC-II
Evaluation

Implementation Preparation

PC-III

Financing Appraisal & approval

Engr. Daanyal Umar, CED, CECOS

 PC Performa: Summary
For the project cycle following six (6) proforma have been
designed by the Planning Commission.
No Performa Purpose

1 PC-I Form
Detailed project document

2 PC-II Form
For preparation of pre-feasibility, feasibility study, conducting survey

3
PC-III Form For submission of quarterly monitoring/progress report of project

4
PC-IV Form For submission of completion report of project
5
For submission of evaluation /implementation report on annual basis for five
PC-V Form
years (helps in policy formulation for future)

6
Low cost PC-I Form For preparation of small projects costing less than Rs. 1.0 million
Engr. Daanyal Umar, CED, CECOS
Methodology of Processing Project
Development
Key Stakeholders
 PIP and PIA Section
PC
 Technical Sections
 Ministries/Organizations/ Provincial Governments
 Ministry of Finance
 Economic Affairs Division

Engr. Daanyal Umar, CED, CECOS

1. National Economic Council (NEC)
Composition Functions
Chaired by the Chief Executive of the Country  Supreme policy making body in the
(President/P.M) economic field

Members:  Approves all plans and policies

Federal Ministers (in-charge of Economic Ministries) relating to Development
Deputy Chairman Planning Commission
Governors/Chief Ministers of Provinces  Overall control of Planning
machinery
Secretariat: Cabinet Division

Engr. Daanyal Umar, CED, CECOS

2. Economic Coordinate Committee of the
Cabinet (ECC)
Composition Functions
Chaired by the Prime Minister  Attends all urgent day to day
economic matters
Members:  Coordinates the Economic Policies
All Federal Ministers (in-charge of Economic Ministries) of the Government
 Keep vigilance on monetary and
credit situation
Secretariat: Cabinet Division
 Regulate credit in order to maximize
production and exports and to
prevent inflation
 Approve the projects in private
sector

Engr. Daanyal Umar, CED, CECOS

3. Executive Committee of National
Economic Council (ECNEC)
Composition
Chaired by the Minister for Finance
Members:
All Federal Ministers (in-charge of Economic Ministries)
Provincial Governors/ Chief Ministers or their nominees
Provincial Planning and Finance Ministers
Functions
 Sanction development projects in
the public and private sector
 Approve moderate changes in the
plan and plan allocations
 Supervise the implementation of
Economic Policies laid down by the
NEC/Government
Engr. Daanyal Umar, CED, CECOS
4. Central Development Working Party
(CDWP)
Composition Functions
Chaired by Deputy Chairman Planning Commission  Approve/scrutinize projects
exceeding a certain financial limit of
Members: the Federal Ministries, Provincial
Governments, Autonomous Bodies
Secretaries of the Federal Ministries Concerned with
Development
 Submit/ recommend such projects
to the ECNEC for final approval
Heads of the Planning Departments of the provincial
Governments

Secretariat: Planning Division

Engr. Daanyal Umar, CED, CECOS

5. Departmental Development Working
Party (DDWP)
Composition Functions
Headed by the respective Secretary of the Division/ Head  Approve/scrutinize development
of the Department projects of Federal Ministries/
Division/Departments according to
Members: their financial limits
Representative of the Finance Division

Concerned Technical Section of the P&D Division

Engr. Daanyal Umar, CED, CECOS

6. Provincial Development Working Party
(PDWP)
Composition Functions
Headed by the Additional Chief Secretary Development/  Approve development Projects
Chairman P&D Board according to its financial limits

Members:  Scrutinize projects for inclusion in

Secretaries of the Provincial Departments concerned with the provincial ADP
Development
 Recommend projects to CDWP
Representative of Federal Ministry of Planning & above certain financial limits
Development

Engr. Daanyal Umar, CED, CECOS

 Phase-I: Kick-off

 In December of every year Public Investment Programme (PIP) Section of the PC seeks
from the Federal Ministries/Organizations/ Provincial Governments the details and
priorities of the projects (whether ongoing or new) to be funded from PSDP

 Working paper is prepared by the PIP section in consultation with concerned technical
sections  for the “Priorities Committee” meeting to be held in the Finance Division,
under the chairmanship of Additional Secretary (Budget)

Engr. Daanyal Umar, CED, CECOS

 Phase-II: Priorities Committee

 Issues a schedule of consultative meetings (Feb. to May) with the concerned stakeholders to
determine the priorities of the projects

 In consultation with the PIP section of the Planning Commission and Ministries/
Organizations/Provincial Governments a working paper for Annual Plan Coordination
Committee (APCC) reflecting prioritized allocations in light of the available size of the
development envelope is prepared

Engr. Daanyal Umar, CED, CECOS

 Phase-III: Annual Plan Coordination
Committee
 It is headed by the Deputy Chairman Planning Commission

 Projects and their allocations are finalized in consultation with the same Ministries
represented at the level of Ministers/Secretaries/Chief Secretaries

Engr. Daanyal Umar, CED, CECOS

 Phase-IV: National Economic Council
 Headed by the Prime Minister and attended by Senior Federal & Provincial Ministers and
Secretaries of the concerned Ministries

 The final set of project allocations is prepared and presented for the approval of National
Economic Council (NEC) and published/ printed in shape of a book for circulation to all
concerned

 NEC meeting is usually held in the last week of May or first week of June

Engr. Daanyal Umar, CED, CECOS

 Core Forums

National
PIP Economic
Council

Annual Plan
Concerned
Coordination
Ministries etc
Com
WP
Priorities
Com
Technical
Priorities Com WP
Sections (PC) APCC

Engr. Daanyal Umar, CED, CECOS

PC-II: Survey/Feasibility Study
 This Form envisages details with regard to survey and pre-feasibility & feasibility study
before approving the project

 Intended to get full justification for undertaking the project before large resources are tied
up with them

Engr. Daanyal Umar, CED, CECOS

PC-I: Complete Project Detail
This Form or document envisages complete project details such as
 Project description
 Purpose
 Objectives
 Cost
 Design
 Completion time, annual recurring expenditure, management structure, environmental
impacts, technical/financial/ economic feasibility/ rate of return, benefits, justifications etc

Engr. Daanyal Umar, CED, CECOS

 Categories of PC-I
 Production
 Agriculture Production
 Agriculture Extension
 Industries, Commerce And Minerals
 Infrastructure
 Transport & Communication
 Telecommunication
 Information Technology
 Energy (Fuel & Power)
 Housing, Government Buildings &
Town Planning
 Irrigation, Drainage & Flood
Control
 Social Sector
 Education, Training and
 Manpower
 Health, Nutrition & Family Planning &
Social Welfare
 Science & Technology
 Water Supply & Sewerage
 Culture, Sports, Tourism & Youth
 Mass Media
 Governance
 Research
Engr. Daanyal Umar, CED, CECOS
 Appraisal
 The sponsors send 45 copies of the PC-I/II to the PC. The document is first appraised by
the PIA Section which is the secretariat for the above forums and if cleared by them it is
circulated to all Members of the DDWP/ CDWP/ ECNEC and the concerned technical
section of the PC dealing with the subject.

 Technical section carries out the technical appraisal while the Economic Appraisal Section
conducts the financial/economic viability of the project including Internal Financial Rate
of Return (IFRR), Net Present Value (NPV) and sensitivity analysis etc.

Engr. Daanyal Umar, CED, CECOS

Forums for Approval of PC-I/II
Approval Approval Power (Million) Composition
Forum

DDWP Rs. 60 (old) Headed by Secretary of Concerned Ministry with Reps.

of Planning Commission and Finance Divisions as
Rs. 2,000 (2019) Members
CDWP Rs. 1,000 (old) Headed by DCPC with Secretary P&DD, Members of the
Planning Commission, ACS (Dev) of Provinces, Reps of
Rs. 10,000 (2019) Finance, EAD and concerned ministries as members

ECNEC Above Rs. 1,000 (old) Headed by Prime Minister with representatives from
Provinces an concerned ministries as Members
Above R.s 10,000 (2019)
Corporate ECNEC Powers Headed by Chairman of the Public Sector corporation
DWP with reps of Planning & Finance as Members

Source: Planning Commission Engr. Daanyal Umar, CED, CECOS

 Central Development Working Party
 Technical sections prepares a working paper for CDWP

 PIA Section circulates the working paper to all the members of the CDWP who while
attending the meeting comment, appraise and support the project

 After detailed deliberations projects may or may not be approved keeping in view the
national/public interest

 If it is agreed to approve a project which is beyond Rs. 10,000 million, the CDWP
recommends it to the ECNEC for final approval

Engr. Daanyal Umar, CED, CECOS

 Executive Committee of the National
Economic Council
 A summary for ECNEC is prepared by the concerned technical section of the PC and sent
to the Cabinet Division who circulate the summaries to all the members of the ECNEC

 ECNEC normally holds its meetings on quarterly basis

 Anticipatory Approval:
• In case a project has to be started in urgency and the CDWP has already recommended it for approval
but the meeting of ECNEC is not scheduled in near future

• The sponsors through Planning Commission move a request of anticipatory approval of Chairman
ECNEC stating the justification, importance and urgency of the project

Engr. Daanyal Umar, CED, CECOS

 Approval
 Once the project is approved from the relevant forum, after receipt of minutes and other
necessary documents the PIA Section issues administrative approval of the project to the
sponsors for taking up the case of financial releases with the Finance Division who make
quarterly releases only if an allocation of that project is available in the PSDP.

 The sponsors are also required to prepare annual cash/work plan of the project for getting
the releases.

Engr. Daanyal Umar, CED, CECOS

 PC-III: Monitoring
 The Projects Wing of the Planning Commission is responsible for undertaking the
quarterly monitoring of the projects which have been started by their sponsors and have
attained 30% progress

 The PC-III contains a questionnaire seeking information on the progress of the project
such as physical and financial targets of the next quarter and achievements of previous
quarter

Engr. Daanyal Umar, CED, CECOS

 Types of PC-III
 PC-III (A) form for Annual Physical Targets based on PSDP Allocations
 To be furnished by 1st July of each year

 Activity Chart or Work Plan/ Cash Plan

 PC-III(B) Monthly Progress Reporting

 To be furnished by 5th day of each month

Engr. Daanyal Umar, CED, CECOS

 PC-IV: Project Completion Report
 Performa filled by the Sponsoring/Executing Agency at the time of completion of a project
and sent to the Planning Commission for approval and onward transmission to the Finance
Division for shifting the project from implementation stage/ development budget to the
operational stage/ non development/ recurring budget.

Engr. Daanyal Umar, CED, CECOS

PC-V: Annual Performance Report After
Completion of Project
 Once the project gets into the operational stage after completion its performance is judged
in light of the given financial/economic feasibility, benefits and objectives of the project as
were set out in the PC-I. This proforma has a questionnaire seeking information on annual
performance of the project.

 Report to be furnished by 31st July of each years for 5 years after completion of Project
indicating Projects operational results during the last financial year.

Engr. Daanyal Umar, CED, CECOS

 Q/A-SESSION

“If you set your goals ridiculously high

and it’s a failure, you will fail above
everyone else’s success.” 
― James Cameron

Engr. Daanyal Umar, CED, CECOS

 QUIZ 1
QUIZ TIME (15 Mins)

When I say pens down, you have to submit quiz

within 45 seconds

NO LATE SUBMISSION SHALL BE

ACCEPTED
Engr. Daanyal Umar, CED, CECOS