Pakistan : Sindh Growth and Rural Revitalization Program - Subprogram 1

Public sector management / Public expenditure and fiscal management

The Program aims to assist the GoS to promote broad based growth, and to particularly accelerate rural growth. It emphasizes the importance of policy and institutional reforms to attain inclusive growth through getting greater private sector investment, along with ensuring efficient public finances and systems - for growth and rural development. Three broad core policy areas (CPA) have been identified to:

i. Expand the private sector participation in Sindh's economic activities and service delivery;

ii. Improve value for money for public expenditure; and

iii. Revitalize the rural economy.

The Program will undertake a combination of Short (1 year), Medium (2-3 years), and Long-term (3-5 years) actions. Accordingly, the Program is a cluster which includes 3 sub-programs.

Piggybacked TA - Enhancing private sector participation in public service delivery is a way of improving efficiency and effectiveness, as well as augmenting resources for public service delivery. This requires a mindset change, institutional realignments, and capacity building in contract design and risk management. The TA will provide national and international expertise to the Finance Department to support the establishment of the Public-Private Partnership (PPP) Unit and develop PPP policy and regulatory frameworks. Likewise, the TA will support the Planning and Development Department (P&DD) and line agencies in improving the quality of public sector investments by enhanced prioritization, project management, M&E, and medium-term planning. The TA will support the strengthening of governance structures, investment, policy, and legal frameworks for pension and other employee benefits.

1.

The following factors were taken into account in determining the size of the loan: (i) the strength of the Program and its development impact, (ii) the financial, economic, and political costs associated with the implementation of the Program, and (iii) the overall development financing needs estimated by the Finance Department of the GoS.

The primary driver in the Government's decision to seek the ADB's policy reform and financing support is to reduce rural-urban inequality and enhance the pace of growth, particularly in the rural areas through a set of targeted reforms and increased investment. The enhanced flow of funds to rural areas will enhance the productivity of agriculture, livestock, fisheries, rural infrastructure, rural health and education, and will be evidenced through their budgetary allocations. Additional supportive measures to be undertaken include the creation of mechanisms to bridge the viability gaps in critical areas to encourage private sector participation in infrastructure service delivery in a transparent manner.

1-a. PPP institutionalized

1-b. Public sector enterprises divested or private management introduced

2-a. Public sector investments prioritized, funded, and implemented as planned

2-b. Off-budget pension and general provident fund management institutionalized with due diligence, and their administration improved

3. Share of public spending on rural development increased, and private sector participation in rural economic activity and service delivery expanded

Detailed status of program outputs are provided in the program completion report.

Under the attached TA, two sets of workshops were held in Karachi for key departments that will be implementing PPPs in March and June 2011. PPP pipeline population continuing, as are technical and advisory support to the Government of Sindh.

Various consultants had been engaged under TA 7201 to support implementation of subprogram 1 and 2, including in the areas of public financial management, market development and corporatization of SOEs, and contingent liability management. Advisory and technical support for public private partnerships continued through 2013.