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Ministers, Cabinet bypassed to fast track development
The Government has decided to bypass the need to get approval of the minister and the Cabinet if two state institutions decide to enter into an agreement in the future.
In a circular, the Treasury Secretary S. R. Attygalle says the authority to enter into such agreements without the approval of the minister concerned or the Cabinet will now be vested with the Line Ministry Secretaries.
The Treasury Secretary has also been empowered to issue Letters of Credit (Collateral), Letters of Comfort and Treasury Guarantees within the applicable statutory limit.
In addition, the Treasury Secretary is also vested with powers to resolve issues with regard to Cabinet approved projects with the involvement of the bilateral and multilateral agencies through policy dialogues on operational and tactical matters. The Treasury Secretary’s decision will be considered to be final, the circular says.
These decisions have been taken this week in what the Finance Ministry states is a move to “simplify systems and processes to fast track implementation of development activities”.
The new directives have been set out in the circular sent out by Treasury Secretary Attygalle this week after the Cabinet approved the proposals to achieve the Government’s priorities such as ensuring access to water, rehabilitation, development of roads, improving connectivity, access to markets, irrigation and improving livelihoods and supporting agriculture.
The circular states these activities have been “severely compromised” due to existing an “archaic” regulatory framework requiring approvals from several entities and finally the Cabinet of Ministers.
Delays in payments to contractors have been identified as key impediments to fast track development activities. The delays result in cost escalations also, according to the circular sent to all Secretaries of Ministries, Chief Secretaries of Provincial Councils, Heads of Department and Local Authorities, Chairpersons of Government-owned Corporations, Companies and Statutory Boards.
Accordingly, when agreements are entered into between government agencies including ministries, departments and State Owned Enterprises the agreement could be signed with the approval of the Ministry Secretary keeping with the relevant Act of incorporation or the Companies Act.
“Agreements between Ministries, Departments and otherwise when SOEs (state-owned enterprises) are a party to such agreements, the approval of the governing body as stated in the Act of incorporation or the Companies Act will suffice and should not be forwarded for the approval of the Cabinet of Ministers,” the circular says.
However, matters related to procurement of goods or services undertaken in line with the procurement guidelines issued by the government are excluded.
For the changes to be made on the ongoing Cabinet approved projects, a Committee headed by the Treasury Secretary is to be appointed along with secretaries of key ministries to look into the matters such as restructuring, additional financing, loan extensions and cancellation of projects. The committee decisions will be considered as final.