Disbursing Rs 1.2 trillion for public investment projects

The Government’s massive public investment of Rs.1.2 trillion this year remains confined to seven key sectors along with projects which were halted or delayed due to the pandemic or economic crisis, official sources divulged.

At least 200 foreign-funded development projects suspended in 2022 due to holding of loans by foreign funding agencies, would most probably resume this first quarter, State Minister for Finance Shehan Semasinghe said.

Social and commercial infrastructure growth will be among major objectives for the public investment programme 2024 formulated by the National Planning Department (NDP).

Necessary guidelines have been issued requiring all project proposals utilising the consolidation Fund to be submitted to the National Planning Department (NPD) where it has to undergo preliminary and detailed appraisal before moving to the funding arrangement stage.

The breakdown of project investments this year for seven key sectors are social infrastructure Rs. 210.64 billion, agriculture Rs.57.72 billion, commercial infrastructure Rs.743.33 billion, governance Rs.73 billion, environment Rs.7.14 billion, social protection Rs.13.29 billion and regional development Rs.71.47 billion, finance ministry data shows.

According to latest NDP findings, a significant number of project proposals are directly submitted to the Cabinet for approval skipping appraisal by the department entirely.

The Ministry of Finance is required to ensure that all projects included in budget documents are from the list of assessed and prioritised projects.

The total investment for new projects during 2024 is Rs. 234 billion while priority needs to be given to projects that address the post crisis recovery requirements, officials said.

Financing the investment projects is crucial considering the high debt burden and uncertainties in the speed of the recovery. Hence, non-debt financing options such as FDIs, green bonds etc. should be encouraged.