Government to complete 121 mega projects this year amidst financial woes
File picture of a construction project in Colombo.
The Government, amidst a bleak economic situation with an almost empty coffer, has drawn up plans to complete 121 mega scale development projects this year, a Cabinet memorandum presented by the Finance Ministry on August 16 revealed.
The aim of presenting this memorandum by Finance Minister Basil Rajapaksa is to inform the Ministers on the performance of 319 projects which are to be completed during the period of 2021 -2030.
Work on only three projects out of 121 projects scheduled for 2021 has been completed as most of these project construction slowed down or halted due to financial constraints and COVID -19 situations, the cabinet memorandum clarified.
284 mega scale development projects are in the phase of implementation under the purview of 41 line ministries at present.
The approximate total investment of these projects is Rs. 6,744 billion and Rs.1, 638 billion out of this amount has already been spent. The total allocation for 2021 is Rs. 692.5 billion, the cabinet memorandum indicated.
The Ministry is facing a gigantic task in raising this money at time where the country’s revenue has fallen to less than 9 percent of the GDP although it generally needs around 20 percent of GDP to meet the financial liabilities of Defense, Health and Education sectors.
Sri Lanka is losing Rs. 522 billion per annum revenue owing to tax amendments introduced in 2020 and it will be the same this year, economic experts said adding that its essential to introduce economic reforms pruning expenditure.
Further travel restrictions imposed due to the spread of the COVID-19 pandemic, drawbacks in the economic activities due to restrictions on international trade as well as limitations on allocation of funds due to fluctuation of exchange rates remain as major challenges for the implementation of development projects in 2021, a senior Treasury official said.
Therefore space in the Public Investment Programme for investment of Rs.4.47 trillion should be maintained throughout the period until 2030, as all these projects are scheduled to be completed in 2030, he said.
Loans have been obtained from local banks and foreign lending agencies for financing of 127 out of 284 mega scale projects.
Approximately, Rs. 185 billion has been allocated in 2021 for 53 new projects of which Rs. 25 billion was expected to be spent for the first quarter. However, only 38 percent of the targeted expenditure has been met.
A special discussion on formulating a mechanism for promotion of sectors and projects of national importance was held at the Ministry of Finance this week.
The meeting was chaired by Minister Rajapaksa who emphasised the need of identifying sectors that could attract investors and improve other sectors which had already attracted investments.