Jan 05, 2020

Mega projects on hold until August budget Featured

The Government has decided to put on hold all major projects, including construction of roads and buildings, until the presentation of a budget in August this year, a senior Treasury official said.

The decision has been conveyed to ministries on the grounds that no allocation of funds will be available for the projects until a budget is presented.

The move would mean that ongoing construction of state buildings, including schools, hospitals, roads, and other public buildings, will be put on hold whether they are at the preliminary or final stages.

The Government also has put on hold obtaining of loans from international agencies as it is not in a position to meet the local component of the project. This is a requirement in obtaining such loans.

The official explained that the Government’s decision to provide concessions by reducing the Value Added Tax and the Nation Building Tax had resulted in a drop in state revenue and this had prevented spending on major projects.

He said that some of the allocations left over from the former government’s projects such as the ‘Enterprise Sri Lanka’ and ‘Gamperaliya’ would be used for the newly launched ‘Sapirigamak’ programme. “But the expenses will be minimal and it will be about Rs. 2 million a project”.

A senior Budget Department official said the Vote on Account which was passed by the former Government would be effective until April this year. A second Vote on Account would be presented by the President after the dissolution of Parliament and it would be effective for the next three months until July.

In August the next budget would be presented covering expenses for the entire year, while the 2021 budget would be presented in November.

The official explained that the 2020 budget could not be presented as a new government elected to power would have to implement programmes of the previous government.

Development Bank and Loan Schemes State Minister Shehan Semasinghe told the Sunday Times it was due to the fault of the previous government that a proper budget could not be presented. “We could have minimised delays in completion of projects if the previous government had presented a budget for 2020,” he added.

 (Except for the headline, this story, originally published by sundaytimes.lk has not been edited by SLM staff)