ISLAMABAD: The federal government has yet to provide a clear commitment on the timely release of rupee cover for billions of rupees worth of foreign-funded development projects, raising concerns among development partners and executing agencies.
While the Ministry of Planning, Development and Special Initiatives has included numerous foreign-assisted schemes in the proposed Public Sector Development Programme (PSDP) 2026-27, their implementation depends largely on the Finance Ministry’s approval of rupee cover.
The Power Division recently informed the National Assembly Standing Committee on Power that several projects are facing delays despite available foreign financing. Officials noted that imported equipment accounts for nearly 60 to 75 percent of project costs, yet obtaining rupee authorisation remains a challenge.
The committee acknowledged that many payments are made through externally managed third-party arrangements and recommended reconsidering the rupee cover requirement for such transactions. It also proposed exemptions for foreign-funded components to avoid delays and cost overruns.
Prime Minister Shehbaz Sharif has already formed a ministerial committee, led by Planning Minister Ahsan Iqbal, to resolve the issue. The committee is expected to review recommendations prepared by a sub-committee in its next meeting.
