Government “and” The money destined for capital projects

For the nine months of this year, about 260m euros have been spent, out of 789m how much they were dedicated to this year's budget for these projects.

The finance report of spending, which included the nine months of the year (January 9th) of the Ministry of Finance, says that the value of about 260m euros, represents a low execution rate, compared to the total annual value budgeted for this category or the same period of the preliminary year, as a result of the late adoption of the Law on Business Divisions for 2019 and a low intensity of budget execution by budget organisations.

Of this figure, according to the report, the largest amount has been spent on road construction, at over 154m euros, for buildings (schools, hospitals and other public objects) has been spent 44m euros, while the lowest value has been spent on land, expropriation, transportation, and public safety.

Economic experts and civil society representatives consider change needed in the way capital projects are planned.

Economics professor Musa Limani, in a conversation for Radio Free Europe, says that as a precondition for a project to be successful, effective and careful planning is required at first. From the local and central level, he points out, needed resources have been missing presented in public sector projects.

Thus, the means for capital projects, Limani says, cannot be exploited unless the feasibility of investment programmes exists.

I think the local level, but the central level, also, flows into the delivery of programmes and investments. But, mainly up to 90 percent of the value of capital investments has been spent on road infrastructure on highways. I basically disagreed with that, although infrastructure is a very important factor of economic development, but is not a host of economic development”, Limani said.

And Berat Thaqi, policy analyst at the Institute for Advanced Studies -- GAP, says the category of capital investments is the category of lower planning and realisation, compared to other budgetary categories.

He says the central and local institutions should initiate, plan and manage with such projects. But in this area, according to him, professional capacity is lacking in the design and management of projects in the public sector.

“Factors why this category is spent less are different. In the first place is the lack of professional capacities, whether in municipalities or central level, to manage capital projects because in capital investment spending, there are tendering procedures, procurement procedures and there are some difficulties reflecting in poor management or low public sector planning capacity in terms of capital investments”, Thaqi told Radio Free Europe.

He adds that since the establishment of local institutions, it has become a tradition for capital investments to be directed into road infrastructure. Thaci considers it necessary to change the orientation of the means for capital projects, and these will be realised for a longer-term plan.

Kosovo needs many new capital projects and challenges in many areas, but to address them all, a level of professionalism, generally better planning”, he says.

Meanwhile, Professor Limani stresses that the focus of budget money on infrastructure and construction of objects has bypassed investments in the production sector, which, according to him, can create new jobs and impact overall economic development.

I think that because of investment orientation in infrastructure and energy, other programmes are lagging due to lack of means. Capital spending should be invested in the production industry”, Limani said.

Otherwise, the value of spending on public sector projects has steadily increased in recent years. In 2017, the budgetary value for the category was about 470m euros, in 2018 about 533m euros, and this year it was 789m euros.

According to the medium-term expenditure Framework for 2020-2022, Kosovo's 2020 budget is estimated to be about 2.4 billion euros, while capital spending value will total over 794m euros.

In capital expenditures, said in the medium term, the priority will be given to activities that have impact on long-term economic development, including public infrastructure and influential investments in private sector productivity development.