Smart Islamabad Project Faces Delay as Funding Shortfall Halts Implementation

Pakistan’s ambitious “Smart Islamabad” initiative, aimed at transforming the federal capital into a digitally integrated smart city, has encountered a major setback after implementation work was temporarily suspended due to a severe funding shortage.

The project, launched to modernize Islamabad’s digital governance, surveillance, security coordination, and public service delivery systems, was assigned to the National Information Technology Board (NITB) under the supervision of the Ministry of Information Technology and Telecommunication.

However, official documents reveal that the originally approved project budget of Rs 708.3 million has proven insufficient for the execution of the initiative, forcing authorities to halt implementation activities despite ongoing planning and procurement efforts.

According to sources, NITB had requested an additional Rs208 million allocation for the fiscal year 2026–27 to continue project implementation. The financial gap reportedly widened further after bids submitted for equipment required for the project’s proposed Fusion Centre exceeded Rs1 billion.

The Fusion Centre is considered one of the project’s central components and is expected to support integrated monitoring, coordination, urban management, and digital governance operations across Islamabad.

Officials confirmed that although physical progress on the project has reached nearly 20 percent, financial progress remains effectively at zero due to the lack of available funds and pending approvals. Sources said NITB has formally approached the IT Ministry seeking revision of the project’s PC-I in an effort to increase the approved project cost and make implementation financially viable.

According to documents, recommendations have been made to revise the total project cost to between Rs1 billion and Rs1.5 billion amid rising equipment and infrastructure expenses. Officials familiar with the matter said the Ministry of IT and Telecommunication is attempting to secure approval for the revised PC-I ahead of the upcoming federal budget, which would allow authorities to proceed with the first bidding phase already initiated for the project.

The Smart Islamabad Initiative carries a two-year completion timeline and has been viewed as one of the government’s flagship digital governance projects designed to improve urban management systems, centralized monitoring capabilities, and citizen services within the capital city.

The delay comes as Pakistan continues pushing broader digital transformation and smart governance initiatives aimed at modernizing public infrastructure and expanding technology-driven administrative systems nationwide.

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