Government freezes non-essential projects: Ongoing projects including major road infrastructure to continue

By Maheesha Mudugamuwa

As the economic crisis deepens, the Government has temporarily suspended the implementation of all non-committed and non-essential projects of all ministries and state institutions for the next three months, The Sunday Morning learnt.

However, projects that are already in progress would be continued without any hindrance.

The freeze on non-committed projects is expected to be in place until the next budget, for 2022, is passed in Parliament.

Ministry secretaries and heads of all institutions were advised to identify the non-essential projects to be implemented by those ministries and institutions, and to hold those projects until the monetary allocations were made under the next budget.

However, the Government did not specifically mention the types of projects the ministries and institutions were to suspend or continue.

Also, the projects launched by the Ministry of Highways, especially highway projects and other road development projects implemented under the “100,000 km of Roads” national programme, would continue, it is learnt.

Speaking to The Sunday Morning, Deputy Treasury Secretary R.M.P. Rathnayake said: “We have not given any specification and therefore, it is up to the relevant ministry secretary or the head of the relevant institution to decide what projects they should put on hold.”

Rathnayake also noted that ongoing projects would not be suspended.

“We advised that only the projects that are not committed to as yet be held, and not to commence new projects,” he added.

In the meantime, in a circular issued by the Treasury Secretary on 28 July 2021 on the guidelines for the preparation of annual budget estimates for 2022 within the medium budgetary framework 2022-2024, all secretaries to ministries, state ministries, chief secretaries of provincial councils, heads of departments, and chairmen of corporations and statutory boards were informed that the decision taken by the Government to temporarily suspend the construction of new buildings was extended, and also that priority should be given to review and complete ongoing projects expeditiously, enabling people to get the benefits of such projects.

It is also stated that recruitment would be discouraged in 2022 and therefore, the financial provisions for the same would not be allocated. It also advised the officials to calculate overtime payments by deviating from traditional methods by reviewing the requirements, taking into consideration the new developments.

Furthermore, the ministries were informed that the allocation for stationery is expected to be reduced by 5%, and expenditure refreshments and travel as well as combined allowances will have to be reduced by holding virtual meetings.

The Government has also decided to limit the ongoing subsidy and welfare programmes to the beneficiaries already approved, unless otherwise decided by the Cabinet of Ministers, and also to restructure the welfare programmes/projects implemented through government funds by reviewing the same in the context of the Covid-19 pandemic.

When contacted by The Sunday Morning, Road Development Authority (RDA) Director General L.V.S Weerakoon confirmed that none of the expressway development projects or ongoing road development projects would be cancelled or suspended.

“In our budget meeting, we have decided to go ahead with all ongoing projects and there was also no restriction for the commencement of expressway projects,” he said.

Commenting further on the expressway projects, Weerakoon noted that the construction work of the Central Expressway Project (CEP) as well as Ruwanpura Expressway Project (REP) is continuing at present.

“We are waiting for the credit committee approval from the UK to go ahead with Section IV of the CEP. Also, we would be signing another $ 500 million loan agreement with the World Bank to develop rural roads,” he said, adding that the loan negotiations have now reached the final stage and would be signed next week.

“Under the World Bank loan, the repayments would only begin from 2032 and therefore, this is very advantageous to the Government,” he added.