Govt. to fast-track public sector investment programme

Jan 15, 2018 News

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– Major Ministries already targeted for capacity building

The poor implementation rate of projects planned by ministries last year, has led to the Ministry of Finance, and the Government as a whole, taking stricter measures this year to ensure that there are no recurrences. According to Finance Minister, Winston Jordan, the national performance on the public sector investment programme (PSIP) last year is still far below Government’s expectations and economic needs.
He reminded that last year, significant concern was expressed about the lack of progress of the PSIP, and the Mid-Year Report for 2017 echoed those same sentiments. Since then, Jordan said that the Government has worked to accelerate implementation.
He noted that the Government even approached the preparation of Budget 2018 with a significantly sterner disposition, since continuing with the status quo was untenable and unthinkable.
The Finance Minister articulated that during the preparation process, Budget Agencies were mandated to ensure that procurement plans were prepared in support of their 2018 work programmes; bills of quantities and terms of references were prepared in 2017 for 2018; and procurement processes commenced prior to the New Year. Jordan said that Budget Agencies should be in a state of readiness to implement the PSIP for 2018.
Jordan said that the make-up of the PSIP, in Budget 2018, is one that should allow for a more structured and timely execution within the parameters of scope, time and cost. He said that the Government has conducted a Public Investment Management Assessment (PIMA) and, based on the findings, will be taking further actions to improve the quality of expenditure outlays.
In support of improved capacity of the Central Government, the economist noted that the Government will be piloting a procurement planning training programme in 2018. It is anticipated that key sectors, such as health, education, public infrastructure, public security and agriculture, will be targeted for this capacity building exercise.
The Finance Minister said that officers will be trained on the development of procurement plans, and SPEND analysis, and will benefit from clinical sessions where a specialist will facilitate the development of actual procurement plans. He said that these procurement plans are intended to serve as a benchmark against which performance will be measured and, also, as an early warning mechanism to signal the need for remedial interventions.
The Finance Minister asserted, “In 2018, we will continue to strengthen our procurement systems through several new initiatives. We will be establishing a process for debarment, where the past performance of bidders will be appraised as part of the selection process. We will establish a contractor‘s register to support this particular initiative. Also, a register of all procurement evaluators will be established to ensure that turnaround times and procedures are monitored and enforced.”
Additionally, the economist expressed that the Government will be updating the procurement legislation, and will begin the groundwork leading to the eventual implementation of an eProcurement platform. This platform will allow for a more efficient and effective procurement system that has a greater capacity.

IMPLEMENTATION RATES
The rate of implementation of projects scheduled for 2017 was highlighted in the half year report of the Ministry of Finance.
According to the Ministry, the Public Sector Investment Programme, which is financed by both local and foreign funded sources, expended $15.8 billion, reflecting a 19.8 percent increase over the first half of 2016.
Finance Ministry officials said however, 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 finalisation 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 (CJIA) 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 remains 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.

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