Sri Lanka makes public investments only in priority projects

Sri Lanka is now compelled to make public investments only in selected priority projects due to financial constraints of the Treasury and the political instability in the country, official sources said.

The Treasury will be managing public investments properly within the limited fiscal space in the medium term to support achieving long term objectives, a senior Treasury official told the Business Times.

The process of selecting priority projects within the chosen sector has been an issue over the years.

To address this critical issue, new project submission format and the operational manual have been introduced by the Finance Ministry to streamline limited public investments.

The operational manual issued to ministries provides guidance to prepare a comprehensive project proposal including the inclusion of Sustainable Development Goals (SDG), among others.

It has adopted a “rolling plan” approach for maintaining the flexibility to update annually based on the macroeconomic fundamentals, progress of ongoing projects and new project portfolios, he added.

The total investments required for the period 20182021 is estimated at around Rs. 2,655 billion.

The highest amount has been allocated for the infrastructure development within which the transport sector has been given a high priority because it creates investor-friendly environment and links rural and urban commercial centers in the country.

Human resource development, industry, agriculture and regional development have also been prioritised in the public investment programme (PIP).

Key challenges for the PIP at present are lower implementation readiness, land acquisition and procedures, compensation, financing, delays in procurement procedures, time consuming procedures on investment, financing limitations, institutional coordination, human capacity, lack of expertise in relevant areas and labour.

The PIP has been prepared by t r a n s f o r ming t he Government’s development priorities and objectives envisaged in the “Vision 2025” together with “Sustainable Sri Lanka, Vision and Strategic Path” into feasible projects and programmes in the medium-term. (Bandula)