‘Low Priority Projects’: Alter decision to halt fund disbursement

The road transport and bridges ministry has asked the finance ministry to reconsider its decision to halt fund disbursement for "low-priority projects" of the Annual Development Programme (ADP).  

The ministry, rather, proposed cutting the same amount of ADP fund, which the finance ministry wants to save by not allocating money to low-priority projects, from all projects being implemented by the Roads and Highways Department (RHD).

It wrote to the finance ministry in this regard on Tuesday, sources at the division told The Daily Star.

The decision to halt fund may have some negative impacts, including the possibility of cost escalations and time extensions of the projects, they added.

The government in July decided to put a hold to the implementation of low-priority development projects amid drastic fall in revenue collection caused by the pandemic.

Although the low-priority projects were allowed to use project aid or foreign loans, if they had any, but their implementing authorities cannot use them as they have to pay custom duties and VAT to release the foreign funds, the money for which are not available now, this correspondent learnt from officials involved with some low-priority projects.The Finance Division advised the road transport and bridges ministry that it would be halting 30 percent allocation from the ADP due to the pandemic. The allocation was to come from the government.Following the advice, the road transport and bridges ministry divided all its ongoing projects into three categories -- high, medium and low priority projects -- and sent a list to the Finance Division. 

Of the 196 ongoing projects, the ministry categorised 57 as low-priority projects, and the Finance Division halted the government funding of the projects.

All 57 projects were being implemented by RHD with government financing, sources said.

The work of the low-priority projects is going on at field level and dues of contractors are increasing. Besides, as land acquisition issues are related with the projects, there is a compulsion to pay the money, the road transport and bridges ministry said.

If the projects remain unimplemented, it could have a negative impact on people and there is a possibility of cost escalations and time extensions, it added.

In this situation, instead of releasing fund for RHD projects on the basis of priority list, funds should be released for all projects, cutting 30 percent allocation from all the projects, it added.

The RHD suggested halting the ADP allocation of Tk 4,685 crore from all projects.

The Daily Star could not reach Road Transport and Highways Division Secretary Nazrul Islam for comments over phone. 

On July 8, Budget Wing-2 of Finance Division issued a circular about allocation of ADP funds on the basis of project categories.

Contacted, an official of the wing said apart from the road transport and bridges ministry's proposal, they have received proposals from other ministries, including LGRD, women and children affairs, and fisheries and livestock, to change the decision regarding the low-priority projects.

Some of them proposed upgrading some low-priority projects, while some others requested to reconsider and reduce the amount of fund cut, the official said, wishing not to be named.

 "We are now scrutinising the proposals and yet to reach the final decision. However, we are going to change it," the official added.