Pakistan to deliver $1B spending plan

By CNN's Alex Frew McMillan in Hong Kong

KARACHI, Pakistan -- Pakistan will unveil a spending program of at least $1 billion next Tuesday, according to a report.

Pakistan's finance minister, Shaukat Aziz, has pledged to deliver the package on August 14, a report in the Financial Times says.

That is Pakistan's Independence Day, and a national holiday.

The spending program will focus on infrastructure projects such as a new port in the southern city of Gwadar. Other plans involve dams and roads.

Pakistan expects the Chinese government to lend money for the Gwadar project, which would help strengthen transport ties between China and the Arabian gulf.

Saudi Arabia has commited $250 million to the plans, Aziz said over the weekend.

The minister is traveling to China this week to discuss links between the two countries. He was due to finalize the Gwadar port project Monday in Beijing. He is also discussing coal-mine and coastal-highway projects.

Most ambitious plans to date

The $1 billion spending program would be the most ambitious infrastructure plan since General Pervez Musharraf seized power in October 1999. He appointed himself president in June.

Pakistan is also due to break ground on the Gomal Zam Dam on Independence Day. The $136 million project, 75 kilometers from Dera Ismail Khan, will take four years to finish.

But Pakistan is also under pressure from the International Monetary Fund to rein in government spending. An IMF team is due to arrive in Pakistan on August 15, the day after the package is announced.

They are due to discuss terms for a three-year IMF loan program, probably in the region of $2.5 billion to $3 billion.

Pakistan's current one-year, $596 million loan ends in September and it wants to join the IMF's Poverty Reduction and Growth Facility program.

Aziz said the upcoming construction projects would not add to Pakistan's bulging budget deficit, now running at 5.5 percent of the country's output.