According to an official source, the Federal government will establish Infrastructure Management Unit to supervise the four years' "Infrastructure Development Programme" in the country, which was implemented with the financed assistance of Asian Development Bank up to September 2009.
According to a source of Planning and Development Division, the government's vision for economic growth and poverty reduction sets ambitious targets, which will require massive infrastructure development. However, the government has recently concluded that public funds would be able to meet only about $1.5 billion of estimated total infrastructure investment requirements of $2.5 billion-$3.0 billion annually. The remaining resource gap would have to be funded by the private sector, multilateral financial institutions, and bilateral agencies.
Timely development and implementation of infrastructure investment projects are indispensable to economic progress. Infrastructure institutions need sufficient capacity to carry out analysis, project development and preparation, and pre-construction activities on time and efficiently for external and/or private financing.
The pivotal step from the strategy to the implementation of infrastructure projects is to create an environment conducive to private investment. The government is adopting investor-friendly policies, but operational, legal, and procedural constraints still have to be identified and removed to achieve the MTDF's private investment targets.
The infrastructure sectors covered under the project are power, transport, and water resources. The government's infrastructure strategy is embedded in its Medium-Term Development Framework 2005-2010 (MTDF). The government is pursuing an integrated approach to infrastructure development through broad-based development of a number of infrastructure sectors while increasing infrastructure services countrywide.
The strategy ensures investor-friendly policies. The allocation for infrastructure development has been placed at 54 percent of the government's total planned development expenditures.
According to a source of Planning and Development Division, the infrastructure development plan, assisted by ADB, will develop the infrastructure investment environment, making it attractive to international and domestic private developers and investors, and to multilateral institutions and bilateral agencies. The Infrastructure Development Programme will also increase infrastructure facilities and thereby contribute to national economic development and reduce poverty and to help (a) improve the general investment environment, (b) increase infrastructure capacities in the power, transport, and water resource sectors without unnecessary delay, (c) continue and introduce international standards and best practices, (d) improve governance, and (e) increase the focus on safeguard issues.
According to Planning and Development Division, infrastructure users will be able to undertake economic activities more efficiently and effectively, resulting in an overall improved economic growth.
Infrastructure Development Programme will also support capacity building to improve the impact and sustainability of infrastructure investment. The ultimate beneficiaries are the consumers, who will benefit from increased infrastructure facilities, which will spur economic activity. Investors will benefit from an improved investment environment. The immediate beneficiaries of the programme will be the EA and IAs as their project preparation capacity will improve to international standards and result in improved governance and transparency in consultant selection and procurement.
At present, the medium-term beneficiaries are the poor, as improved rural and urban infrastructure will reduce poverty. The Infrastructure Development Programme will constitute a key intervention for strengthening and further consolidating the long-term development partnership between ADB and Pakistan in the area of infrastructure development, and it indicates the ADB's continued high-level commitment to increase infrastructure services. A second key intervention earmarked in the 2005 programme is the Public Private Infrastructure Financing Facility (PPIF), which will reduce policy constraints on private participation in infrastructure.
While the Infrastructure Development Programme will tackle some immediate policy constraints, the PPIF is expected to focus on private participation in infrastructure over a longer horizon.