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Ministry concerned about projects delays

Thursday, February 07, 2013    

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FINANCIAL Secretary Devon Rowe admitted yesterday that the Ministry of Finance and Planning is concerned about the $2.4-billion underspending on a number of bilateral/multilateral projects by government ministries, department and agencies.

This $2.4 billion in underspending, plus $8.8 billion in reductions in the public debt, occasioned by lower than projected returns from government securities placed on the domestic market and foreign exchange fluctuations involving the US dollar and the euro, assisted the government in containing the cuts in the first supplementary estimates for 2012/13, tabled in the House of Representatives on Tuesday.

The financial secretary denied that the underspending was by design, saying that the ministry shared concerns expressed by members of Parliament's Public Administration and Appropriations Committee (PAAC) that the delays in implementing the projects will lead to increased costs.

"That's why we need to do a comprehensive review of the situation," Rowe said, while appealing to the PAAC members to await the completion of the ministry's review and the presentation of a report to Parliament before seeking more answers.

The supplementary estimates, tabled in the House of Representatives on Tuesday by Minister of Finance and Planning Dr Peter Phillips, showed a $9.896-billion reduction in the total budget for 2012/13, from $612.4 billion to $602.5 billion. The cuts included $7 billion in recurrent spending and $2.8 billion in capital spending mainly in the Capital B estimates, which cover bilateral/multilateral co-operation between the Jamaican Government and foreign institutions and countries.

However, the cuts did not seriously affect spending on domestic programmes as they were absorbed through the savings on the public debt and the re-prioritisation of expenditure, despite Government's absorption of Hurricane Sandy damage costs and other unplanned expenditures, panning out at $10 billion.

But none of these activities, which have cushioned the $14.5-billion loss in revenues up to December, seem welcomed by the ministry.

In response to the concerns raised by the MPs, Rowe said that the ministry would have to do some form of analysis of the reasons for the delays in implementation of the projects, which seemed to be related to problems in meeting the conditions for the disbursement of the funds, problems with the design of the projects and actions which have to be taken during the execution of projects to address.

He said that the ministry has also detected weaknesses in the executing capacity of some ministries, departments and agencies (MDAs), as well as in the levels of compliance with conditions for granting the disbursements.

"We are engaging shortly with a deliberate body of work with the Planning Institute of Jamaica to see to what extent there are reasons which we can identify, and have corrected," he said.

"The importance of these projects to the country's development, as well as the cost of additional commencement fees, imposes a responsibility on the Ministry of Finance to ensure that we examine the reasons, very carefully, and come up with the corrective action that is required," he explained.

The estimates were reviewed by the PAAC yesterday and will be sent next to Parliament's Standing Finance Committee, which includes all 63 MPs, on Tuesday morning, prior to being debated by the House of Representatives at 2:00 pm.

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