Budget 2017 has been a miserable failure – Opposition Leader

Sep 09, 2017 News

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As it prepares for the unveiling of Budget 2018 in another two months, the Opposition already has its views on the effectiveness of Budget 2017. In a nutshell, the People’s Progressive Party (PPP) believes that this year’s budget has been nothing but a miserable failure.
Particularly uttering this and other sentiments recently was Opposition Leader, Bharrat Jagdeo.
At his Church Street headquarters, Jagdeo said that the purpose of a budget is to enhance the welfare of a country, expand opportunities, and support the creation of wealth at every level. He noted, however, that Budget 2017 has failed miserably in achieving those objectives.
Jagdeo asserted that the lack of implementation of the budget is just a symptom of the confusion which exists in Government. He said that the frequent interference of the government in the tendering process has also contributed to the ineffectiveness of budget 2017. In this regard, Jagdeo sought to cite a few examples to support his position.
“If you use international funds it could very well take six months or eight months to go through an entire tendering process…Every time they don’t get a particular outcome, they cancelled those tenders. The same thing happened with drugs,” Jagdeo explained.
He continued, “They used to say that we were single sourcing drugs from New GPC and now they are doing it. The IDB water treatment plant; we left a big loan to do several water treatment plans and upgrade the water system. But there was frequent retendering. The Sheriff Street Road…they annulled the tender a couple times now and the contract is coming to an end. The loan agreement is about to expire and now they are looking to shift the resources to housing…but it could have gone ahead.”
The former President added, “So when you do that, you can’t get projects off the ground because you are cherry picking who you want projects to go to, and so that is affecting implementation too. It is corruption, pervasive corruption everywhere.”
Jagdeo said, too, that the PPP left behind a record of 90 percent implementation regarding completion of projects and spending of budgeted funds. Given what is taking place now, Jagdeo is not optimistic that the Government will be able to achieve 60 percent.
The rate of implementation of projects was also highlighted in the half year report of the Ministry of Finance.
According to the Ministry, the Public Sector Investment Programme (PSIP), which is financed by both local and foreign-funded sources, expended $15.8 billion during the first half of 2017, reflecting a 19.8 percent increase over the first half of 2016.
Finance Ministry officials said, however, that this represents only 27.9 percent of the PSIP’s budgeted allocation of $56.8 billion.
It was noted that the locally-funded projects were primarily constrained by delays in the project implementation as a result of a dearth of procurement planning, apparent lack of capacity, and delays in the tender process.
The Ministry noted that this resulted in only 26.8 percent of the budgetary allocation of $34.6 billion expended at half year. The implementation of the foreign-funded projects was also plagued by delays emanating from the late finalization of a number of financing agreements with both multilateral and bilateral development partners and the subsequent setting up of the project implementation unit.
As such, the Finance Ministry noted that a mere 29.6 percent of the budgeted sum of $22.1 billion of the foreign-funded portfolio was expended.
In the first half of 2017, the amounts expended for major projects including the Cheddi Jagan International Airport Expansion Project, the Power Utility Upgrading Programme, and the West Coast Demerara highway Project, were $2.8 billion, $1.2 billion, $0.6 billion, respectively.
In spite of these constraints, Government said that it remained committed to delivering the budgeted PSIP and has taken steps towards the improvement of the pace of implementation. These include increased monitoring, the introduction of a Cabinet level reporting mechanism in June 2017, and training Ministry officials from key sectors in procurement planning.
Further, in an effort to attract more persons to the national pool of evaluators, a stipend of $3,000 per session was approved by Cabinet, for each evaluator. In addition, monthly stipends were introduced for members of the Ministerial, Regional, Departmental, and Agency Tender Boards.
At the end of June 30, 2017, there were a number of ministries which were below the 30 percent margin regarding their rate of implementation.
The Ministry of Social Protection, for example, had a budgetary allocation of $477M, but up to June last, it had only used up $81M. This represents an execution rate of 17 percent. Also, the Ministry of Public Security was allocated $2.4B but only used $631M, an execution rate of 25 percent.

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