Foreign-funded development projects have been allocated Rs. 255 billion in local-currency funding this fiscal year against a requirement of Rs. 537 billion, a shortfall of Rs. 282 billion, Planning Secretary Dr. Tahir Noor told the Senate Standing Committee on Planning, Development and Special Initiatives, ProPakistani reported on Tuesday, October 13, 2026.
The committee was told that 98 foreign-funded projects are in the 2026-27 Public Sector Development Programme (PSDP), with a combined estimated cost of Rs. 8.1 trillion. Foreign assistance accounts for Rs. 4.65 trillion of that. By simple subtraction, about Rs. 3.45 trillion of the cost has to come from local resources over the projects’ lives.
How the figure came down
The Rs. 537 billion requirement was cut in stages before the final allocation:
| Stage | Local-currency funding figure |
|---|---|
| Initial rupee-cover demand, as described by Planning Minister Ahsan Iqbal in June | Rs. 832 billion |
| Requirement cited to the Senate committee | Rs. 537 billion |
| Economic Affairs Division proposal after consulting ministries and donors | Rs. 425 billion |
| Allocation approved by the National Economic Council on June 10 | Rs. 255 billion |
The National Economic Council approved a total PSDP of Rs. 1 trillion, against overall demand of Rs. 2.9 trillion, according to the briefing as reported. In early June, Ahsan Iqbal had told the Annual Plan Coordination Committee that the rupee-cover demand was rationalised to Rs. 426 billion and that the development programme was left with almost no room for new projects.
The reports do not say how the Rs. 537 billion figure relates to the Rs. 832 billion and Rs. 426 billion given in June. Budget documents reported by Nukta also list Rs. 255 billion as the foreign-assistance portion of the Rs. 1 trillion federal PSDP, so it is unclear whether the committee’s figure describes the same line.
Senators question reliance on dollar loans
Committee chair Senator Quratulain Marri asked which projects would finish this year, and the planning team said most should be completed within the year. The committee asked for adequate rupee funding so that projects nearing completion do not stall, and for stronger monitoring and coordination with donors.
Members also raised concerns about dollar-denominated loans, which carry interest and repayment obligations. The panel said the government should favour domestic resources and rupee allocations where possible and weigh the financial implications of external borrowing carefully.
Sukkur-Hyderabad motorway waits on foreign financing
The committee also reviewed the Sukkur-Hyderabad (M6) Motorway and voiced concern over prolonged delays. Dr. Noor said work would start “within months” once $705 million in foreign financing becomes available. Sections I and II are being processed under a public-private partnership model, with the concession award targeted for February 2027 and the Asian Development Bank providing transaction advisory services. According to the Planning Ministry, financing arrangements with development partners are in place for the remaining sections.
