World Bank-funded project cost doubles after revision

Express Tribune

18-05-2025

The government has made the third revision in the troubled World Bank-funded Pakistan Raises Revenue project and almost doubled the cost to $150 million to upgrade technology and also to procure 179 vehicles, including bullet-proof cars.
In rupee terms, the cost was increased from the original price tag of Rs12.5 billion to Rs40.8 billion — a surge of 226% in addition to giving two years' extension in its completion period.
The Central Development Working Party (CDWP) on Thursday referred the project to the Executive Committee of the National Economic Council (Ecnec), said a statement issued by the Planning Ministry on Friday.
The CDWP also expanded the scope of Punjab Chief Minister Laptop scheme and increased its cost by 170% to Rs27 billion. The Investment Projects Financing (IPF) component of Pakistan Raises Revenue Project worth Rs40.8 billion was referred to Ecnec for further consideration.
The Planning Ministry said the project will be financed through a World Bank loan.
The revised project focuses on modernizing the Federal Board of Revenue's (FBR) infrastructure through the replacement of outdated hardware, deployment of a private cloud, updated software licensing, and enhanced connectivity for field formations.
The project documents stated that an amount of Rs2.2 billion has been allocated for procurement of 179 vehicles of different makes at the unit cost of Rs12.5 million for Digital Enforcement Units. These include 15 bullet-proof vehicles.
The government had taken a $400 million loan in the name of Pakistan Raises Revenue. Out of which, $80 million had been allocated for hardware upgrading. Now this component has been increased to $150 million.
The ministry stated that the FBR's requirements have substantially changed as a result of organization-wide thrust to adopt information and communication technology (ICT) based solutions for its core operations and facilitation of taxpayer, as envisaged under the FBR Transformation Roadmap 2024.
The concept clearance proposal of the programme was approved in 2019. Ecnec in 2020 approved the original project at a total cost of Rs12.6 billion. Later on, the first revision of the project was approved by Ecnec in its meeting held in 2023 at a total cost of Rs21.5 billion. Now, the cost is Rs40.8 billion.
The project documents underlined that based on discussions and understanding between the FBR and the World Banks's team during Mid-Term Review (MTR) mission aide memoire, the project has been restructured for including additional funding therefore scope of the project has been revised.
There are certain changes in implementation strategies for achieving the programme's objectives and goals. The additional funds will be utilized to meet the requirements.
These include piloting Mobile Tax Facilitation Services, initiatives for improved taxpayer compliance, establishing forum for technical consultations with provincial tax authorities on tax harmonization, staff capacity building, backup power equipment up-gradation and control rooms, it added.
The project has been restructured on instruction of the prime minister and discussions and understanding between the FBR and World Bank's team during the Mid-Term Review mission aide memoire.
The FBR had also conducted an inquiry report for identifying external reasons.
The delay was because of non-award of contract under original project, lack of adequate rupee cover allocations as a main hindrance in procurement during last three years and the PM's directive to revise PC-I of Pakistan Raises Revenue to include components of the FBR Transformation Plan falling within scope of the project.
But the Planning Ministry stated in its comments that these risks should have been catered in the risk mitigation strategy of the project and could have been managed by the project authority.
The Planning Ministry recommended fixing the responsibility for the inability to mitigate these risks to complete the project as per its approved scope and time period.
The revised project is also aimed at rolling out a Single Sales Tax Return system, development of Data Warehousing and BI tools, and digital transformation of value chains, the components that do not require any foreign loan.
The project supports faceless assessments, border technology upgrades, and capacity building through training, expert panels, and IT enhancements, along with business process automation and risk management frameworks, according to the Planning Ministry.
The Punjab CM Laptop Scheme worth Rs27 billion was referred to Ecnec for further consideration. The project is funded by the government of Punjab and will be completed by October this year.
The project aims to distribute laptops to approximately 112,000 students currently enrolled in public sector educational institutions across Punjab with the final number subject to revised allocations.
Targeting students in BS, MS, MBBS, and Engineering programmes, the selection will follow criteria approved by the Steering Committee and be based on verified student data from respective institutions.
This initiative seeks to digitally empower students, enhance access to educational resources, reduce socio-economic disparities, and promote equal opportunities.
It also aims to foster collaboration with the local ICT industry, support economic growth and entrepreneurship, and invest in human capital by equipping students with the skills needed to compete globally and regionally.
To qualify for the laptop, the public sector universities and colleges students should get a minimum of 65% marks in intermediate exams. For public sector medical and dental colleges and universities minimum of 80% marks in intermediate are required. Students must not be a recipient of any laptop from PM laptop programme or any government laptop scheme.