ISLAMABAD – In an unexpected development, the federal government has decided to slash the  salaries of contractual employees linked to China-Pakistan Economic Corridor.

The decision came after the finance ministry refused to pay them as per their agreements though it is considering a raise in compensation for the government employees stationed across the country.

The contractual employees of development projects may face up to a 33% cut, depending upon their salary packages.

According to a report by Express Tribune, the Accountant General of Pakistan Revenue (AGPR) objected over fixing their salaries over and above the Standard Pay Package of 2009 for project staff, following which the finance ministry issued an official notification.

The AGPR does not recognise the salaries mentioned in PC-I approved for the said projects.

“The pay of the project staff should be made as per the Standard Pay Package 2009 and was revised from time to time and not on the basis of emoluments approved in the PC-I,” said a notification issued by the Regulation Wing of Ministry of Finance.

In the notification, the Ministry of Finance endorsed the AGPR’s point of view, which believes that there should not be two different pay packages for project employees.

Ironically, the pay packages have been approved by the Central Development Working Party (CDWP), which is headed by Minister for Planning and by Executive Committee of National Economic Council (Ecnec), headed by the finance minister and so the finance ministry might indulge into a legal battle in days to come.

Sources said that Planning Minister Ahsan Iqbal has referred the matter to Secretary Planning for immediate resolution. In his note, the planning minister has acknowledged that the Standard Pay Package of 2009 is not in line with market rates and should be made compatible with 2017 ground realities.