Govt cuts foreign-funded development projects' allocation by over 50% to Rs255 billion

Profit, published by Pakistan Today, reports that the federal government has trimmed the rupee funding earmarked for projects financed by foreign lenders by more than half. The allocation falls to Rs255 billion from the Rs537 billion needed in FY2026-27, with fiscal limits cited as the reason. The information emerged at a session of a Senate panel on planning, chaired by Senator Quratulain Marri.

Planning Secretary Dr Tahir Noor told lawmakers that 98 such projects, costing Rs8.1 trillion in total with Rs4.65 trillion in external assistance, sit within the PSDP for 2026-27. The Economic Affairs Division had proposed Rs425 billion against a Rs537 billion requirement, but the National Economic Council approved only Rs255 billion within an overall PSDP of Rs1 trillion, against demand of Rs2.9 trillion.

The committee voiced concern about dependence on foreign borrowing, recommended that domestic resources be prioritised to cut debt obligations, and urged adequate rupee funding to avoid implementation delays. Officials said the Sukkur-Hyderabad (M6) Motorway could start construction within months once $705 million in foreign financing is available. Sections I and II are advancing through a public-private partnership structure, and the concession award is aimed for February 2027, while the Asian Development Bank will provide transaction advisory services.