Pakistan Institute of Development Economics

PSDP in Pakistan: A History of Unfulfilled Socio-Economic Objectives
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PSDP in Pakistan: A History of Unfulfilled Socio-Economic Objectives

Publication Year : 2023
Author: Muazam Ali

Pakistan has faced significant challenges in achieving socio-economic development since its inception. To address these issues, various development boards and commissions have been established, with the first development board established in 1948 with the aim of investing public funds to improve people’s lives. Over time, the planning board underwent structural changes before becoming the Pakistan Planning Commission in 2013, which now serves as the apex think tank for the government, responsible for national planning and resource allocation. Despite the significant annual investment of billions of rupees into PSDP projects, they have not achieved their intended goals. In 2022-2023, a total of 330 schemes, both federal and provincial, were funded through PSDP at a cost of Rs. 727 billion. These projects continue to face issues such as cost overruns, schedule delays, and lack of funds.

PSDP project failures in Pakistan have been extensively discussed, focusing on both internal management issues and external factors. However, project management tools, techniques and processes that are crucial for project success are often overlooked in managing large-scale projects. This article takes a project management perspective on PSDP. PMI define project management as ‘the application of knowledge, skills, tools, and techniques to project activities to achieve project objectives’. The PMBOK serves as the primary guide for project management in Pakistan, but issues arise from the project design phase.

In Pakistan, projects are often designed hastily, with insufficient time devoted to assessing their economic and technical viability, resulting in poor project design. This issue is further compounded by political pressure, as politicians seek to gain public support by announcing new projects. As a result, politicians often issue directives to the planning commission to approve projects, even if they are not economically viable. To win public support, political leaders often set unrealistic timelines for project completion. For instance, the Peshawar BRT project was promised to be completed in just six months due to political reasons, resulting in schedule delays and cost overruns costing billions of rupees in public money.

In order to ensure that the benefits of a project outweigh its costs, a cost-benefit analysis (CBA) must be conducted once the project is conceived. However, in Pakistan, there is currently no proper mechanism at the government level for performing CBA. CBA is essential for the Planning Commission to select the most beneficial project, based on its return on investment (ROI). The government can then choose the project that has a high ROI and is growth-driven. Therefore, it is crucial for the Planning Commission to introduce a robust CBA mechanism into its system to help select the best projects.

The failure of PSDP projects can also be attributed to a lack of proper project prioritisation by the Planning Commission and its departments. To avoid this, the Planning Commission should first develop a project priority matrix. The priority matrix can be built based on multiple criteria, such as project impact, cost, complexity, time, and urgency. Each project should then be evaluated based on its significance, and the priority matrix should be used to rank the projects in order of importance. This ensures that the planning departments and government concentrate on the most crucial PSDP projects, ultimately achieving the program’s socioeconomic objectives. A well-defined project priority matrix allows for better decision-making, ensuring that resources are allocated to projects that offer the highest returns. This approach helps to focus on achieving the projects’ goals and objectives effectively.

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The success of a project largely depends on the human resources involved, and this is also true for PSDP projects. However, the availability of skilled personnel is a significant challenge. The workforce is experiencing significant technological advancements, and there is a dire need for individuals with the required skills. Unfortunately, employees are not provided with the necessary training to keep up with these technological changes. This lack of training results in employees being unable to use modern technology effectively in office affairs, which ultimately impacts project implementation. Additionally, organizations prefer hiring internal candidates as Project Directors or Project Managers instead of selecting qualified individuals from a proper hiring process. This decision leads to individuals lacking the required qualifications and skills, which ultimately affects the success of the project. Therefore, to address this issue, the government needs to prioritise the hiring of qualified and skilled individuals through proper hiring processes, along with providing capacity-building training to employees to enhance their skills to keep up with technological advancements.

Effective monitoring is a critical aspect of project management, as it helps the team identify potential issues and take proactive measures to keep the project on track. Unfortunately, monitoring is often overlooked in PSDP projects, and when it is conducted, it is often done manually, leading to delays. However, with the latest technological advancements, project teams can leverage software to obtain real-time data and information, facilitating effective monitoring and ensuring that the project stays on track.

In modern project management, stakeholder satisfaction is recognised as a crucial factor for project success, and stakeholders themselves play a vital role in achieving this success. However, in PSDP projects, especially those located in provinces, stakeholder management is often neglected. The Project Director fails to allocate enough time to engage and communicate with stakeholders, which can lead to delays and extra expenses. Active involvement and communication with stakeholders is critical to identifying and addressing market or organizational changes proactively.

Risk management is another critical aspect of project management that is often overlooked in PSDP projects. It is crucial to prepare a thorough risk management plan during the feasibility studies phase, well before commencing the project. Given the prevalent political and economic instability in Pakistan, a well-structured risk management plan is imperative to mitigate any uncertainties that may arise during project implementation.

In conclusion, the failure of PSDP projects in Pakistan is not solely due to external factors or internal management issues. Effective project management is crucial to the success of any project, and Project Management tools, techniques, and processes play a vital role in achieving success in mega-scale projects such as the PSDP. Improvements must be made in project design, prioritization, workforce, monitoring, stakeholder management, and risk management to increase the success rate of PSDP projects.


The author is a Young Development Fellow at the Ministry of Planning, Development and Special Initiatives.