The need for effective .project planning in the farmework ofmacro planning has always been very strong in Pakistan as projects formthe basis of development. Without the successful execution of projects,it is unlikely that development plans could be implemented effectively.In Pakistan an elaborate machinery for the planning of developmentprojects exists but its prformance has been far from satisfactory. Ifone has to write the porject history of Pakistan, one wiII come acrossnumerous examples of projects that have failed due to the ineffecientfunctioning of this machinery. Needless to say these failures have costthe economy billions of rupees, which in a capital-scarce economy likePakistan, would have made a substantial difference towards economicdevelopment had this machinery operated efficiently. The objective ofthis paper is two fold: first to indentify shortcomings and weak linksin the project planning system which are responsible for the failure ofmost projects. Failure here refers to the lack of implementation in timeand within the project’s planned budget estimates. And second, tosuggest appropriate remedial policy measures. Experience has shown thatthe process of project planning and implementation in the country hassuffered from inherent problems ranging from conceptual differencesabout the projects, hurriedly prepared feasibility studies deficient inproper technical and. economic underpinnings and the lack of basicinformation obtained through insufficient investigation and surveys toinadequate project monitoring and almost non-existent in-depthevaluation studies.