Funds for capital projects in Serbia are not spent because the projects are not ready or the expropriation of land has not been completed

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This year, 3.6 billion euros have been allocated for capital projects, which is about 40 percent more than the previous year. When it comes to important components of economic growth, most of the money is intended for infrastructure, but the budget for the environment has also been increased two and a half times. However, that money is not spent enough because the projects are not ready or the expropriation of land has not been completed.
The President of Serbia, Aleksandar Vucic, criticized the ministers for withdrawing only 28% of the money provided for capital investments and for asking for more money than they could spend. And this is not the first time, since he has reprimanded them on the same topic since the beginning of the year.
The Ministry of Construction, Transport and Infrastructure emphasizes that the construction of transport and railway infrastructure significantly affects the GDP growth rate, and this is confirmed by the results in the first quarter of 2021, when real GDP growth, compared to the same period last year, was 1.7 percent. In that growth, construction affects as much as two thirds.
– We are currently implementing more than fifty projects throughout Serbia, and only in the field of traffic infrastructure, a total of about 1,000 kilometers of highways and expressways are being designed and built. After the second quarter of 2021, we withdrew about 368 million euros, of which 137 million euros in the first, and 231 million euros in the second quarter of 2021. In general, the realization of infrastructure projects of importance for the Republic of Serbia was mostly realized as planned – the ministry states.
For several projects, they are in the phase of negotiations on the money needed for their realization. On that, they say, they are working quickly so that the projected dynamics would be realized.
– In order to eliminate any dilemma or ambiguity, we especially want to inform the public that due to the speed of work on certain projects, the last two quarters in 2021 have a higher execution than the first two quarters. Due to the dynamics of the works, the third and fourth quarters are significantly higher than planned in the first half of the year – they emphasize in this ministry.
We did not receive an answer from the Ministry of Environmental Protection, how much money they spent and whether there are any problems with the projects. They received 104 million euros from the budget, and it is expected that the projects for the construction of wastewater treatment plants, landfills and the like will contribute to GDP growth.
The Ministry of Economy told us that the projects are being implemented in phases according to the plan and program, and the money will be spent by the end of the year as planned.
Ljubodrag Savic, a professor at the Faculty of Economics, explains that Vucic insists on spending as much money as possible from the state budget because that increases the gross domestic product.
– All ministers have serious plans, but they make the bill without the innkeeper. They have reserved money in the budget, and there are no projects. That money could have been used differently and more efficiently. Money must begin to be spent from January, for field preparation and the like. What the president does and what he is interested in, those things go. Most ministers wait for something to happen, and nothing happens. That is why Vucic’s criticism is in place – Savic explains and emphasizes that someone balanced the budget, planned revenues and expenditures, and now there is a surplus not because he worked well, but because he did not spend money.
He cites the example that five billion euros of loans were approved to the railways at the time, only 900 million euros were withdrawn, penalties were paid for the difference, because in order for someone to give a loan to the state, he must reserve that money, and every reservation has a price.
Goran Rodic, vice president of the Chamber of Civil Engineering, says that not enough money is spent because the projects have not been completed and the expropriation has been completed, and no one can start doing business without it.
– If something is in the realization phase, and no money is withdrawn, it means that it is not being done. Also, uncertainty arises because contractors do not have adequate guarantees. These are all reasons why money can stand – Rodic notes, Politika reports.