Public sector spending to accelerate – Harmon

Minister of Finance Winston Jordan on Wednesday presented to Cabinet the mid-year report on the implementation of the Public Sector Investment Programme (PSIP) and shared the reasons behind the low spending, Minister of State Joseph Harmon said yesterday.

Speaking at a post-Cabinet press briefing, Harmon informed that while the capital spending of the $6.75 billion set aside for the project was “very slow” in the initial months, it improved significantly towards the end of the first half of the year.

Explaining that PSIP is the main mechanism for government’s capital spending, Harmon stated that Cabinet was informed of the issues that hindered the implementation of projects under the PSIP and ways and means of assisting the budget agencies to improve their performance in relation to capital spending were discussed.

Cabinet, he said, also indicated its intention to continue to closely monitor the implementation of the PSIP. Permanent secretaries who were there, he said, expressed appreciation for Cabinet’s intervention and assured Cabinet that the bulk of the PSIP spending and projects for the year 2017 will be implemented.

Joseph Harmon

Harmon said that many of the issues identified had to do with, in some cases, unfamiliarity with the procurement system by some of the permanent secretaries. He said that what they had to do was come “to grips with the fact that VAT was actually now charged on some of government’s services and therefore when the initial contracts were awarded they did not include that and so that amounted to some amount of delay.”

He said they now have to go through a procurement system which required checking, double checking and triple checking to ensure that no mistakes were made. “As you are aware in previous years there was a lot written about the way contracts were awarded and… a lot of criticisms about that and so the procurement entities have been very careful now in checking these things,” he said.

Harmon added that in the ministries there was a recommendation that project management officers be employed at each ministry. “I believe that is having an effect already because some of the ministries already have these officers in there and others that don’t have the Ministry of Finance is now looking at assisting them to have officers in their ministries to be able to help push the paperwork in those ministries so that we believe is going to help significantly. We also believe the better streamlining of the procurement process from the time a contract is awarded up to the time that the mobilisation is given to the contractor and he starts work. “What we are trying to do is to narrow that gap so that things can happen at a faster pace.”

Late last month, Jordan, while addressing the Budget 2018 Preparation and Sensitisation Training Workshop, had lamented the low spending and challenged the participants at the workshop to deliver results.

In his remarks to the heads of budget agencies and other senior government officials, Jordan highlighted the fact that the 2017 Budget had been delivered since November 26, 2016 and yet, there were budget agencies in June still figuring out specifications of items to be purchased.

As at end June, less than 30 percent of the PSIP was expended. “What is the reason for this continued sloth in the implementation of the PSIP, at a time when it was touted as a boost to spending in the economy?” Jordan asked.

“We have awarded only 53 percent of the PSIP and expended a mere 28 percent on maintenance of infrastructure within the recurrent budget. While we happily and deservedly bask in the glow of improved Grade Six examination results, we need to wake up to the reality that less than 50 percent of our Grade Six children passed mathematics this year. Drugs and medical supplies are still in short supply at GPHC and in all of our regions,” the minister lamented.

The Finance Minister reminded the participants that they are servants of the people charged with spending taxpayers’ money prudently and goals must be realistic. For ideas that reach the area of implementation, poor execution would compromise and depreciate the quality of the undertaking. He added, “Wastage and inefficiency are to be abhorred since they rob the people of better services, better infrastructure and, ultimately, a better quality of life.”

Jordan suggested as a collective that they use the opportunity of reflection to renew their energies towards improved performance and better results across all sectors. He observed that the 2018 Budget was being crafted at a time when domestic revenues and other sources of financing are not expected to be substantially higher than the current year.

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