Serbia, Less money for investment projects

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However, the Ministry of Construction, Transport and Infrastructure decided to abandon a certain number of investment projects this year, postpone them or start their implementation more slowly. Investments were reduced by 38 billion dinars, as can be seen from the rebalancing of the republic’s budget. This was hinted at by the President of Serbia, Aleksandar Vučić, when he said a few months ago that due to the energy crisis, the country may have to abandon some infrastructure projects. Then the former Minister of Construction, Transport and Infrastructure, Tomislav Momirović, said that the implementation of all projects will continue because they are all equally important, but movements on the global capital market, changes in supply chains and reflection of energy stability will be monitored.

Representatives of the Fiscal Council observe a drop from 78 billion dinars from the original budget to 40 billion from the rebalance. The largest decrease was suffered by the position where the financing of the start of the construction of the national stadium was foreseen – a drop of around seven billion dinars. Major changes have also been made in the field of road infrastructure construction, so seven important roads (among them the bypass around Kragujevac, the section of the Niš-Merdare highway and the section of the highway from Belgrade to Zrenjanin) will experience a collective reduction in investments of 18 billion dinars. In addition, another five billion refers to the reduction of the appropriation for the construction and modernization of railways (including the modernization of the Subotica-Szegedin railway), about seven billion less for the construction of communal infrastructure and about one billion less for other smaller projects.

According to the rebalancing of the budget, this ministry should end the year with 248.8 billion dinars in expenditures, which is almost seven billion less than what was foreseen in the original budget. The Fiscal Council, in its assessment of the budget rebalancing for 2022, emphasizes that although at first glance it is a small decline, by only 2.6 percent, there have been noticeable changes in the structure of capital expenditures of this ministry.

– We notice several large capital projects where the budgeted amount has increased, by more than 21 billion dinars in total – increased investment in Hungarian-Serbian railway projects, sections of the E-763 highway (Preljina-Požega, Novi Beograd-Surčin), the E-75 expressway and the construction of the Belgrade bypass. Other (non-capital) expenditures of this ministry are also growing by almost 10 billion dinars. Subsidies to public road companies “Roads” and “Corridors of Serbia” are increasing (by 12 billion dinars), but they are falling for air transport (by about two billion), according to the Fiscal Council.

Otherwise, the total republican investments in infrastructure (capital expenditures without the security sector and without commodity reserves) will approximately amount to 2.7 billion euros in 2022. When investments from other levels of government (local, APV, road companies and funds) are added, the sum is reached of 3.6 billion euros, that is six percent of GDP, which corresponds to the total infrastructural investments of the general state. According to the assessment of the representative of the Fiscal Council, this is above the average of Central and Eastern Europe and significantly more than the budget funds allocated for these purposes until a few years ago, which is an extremely positive trend.

The main disadvantage, on the other hand, is that the rebalancing reduces the already insufficient investments in communal infrastructure, since it is an area where the infrastructure network is the least developed (sewerage, waste water purifiers). According to the calculations of the Fiscal Council, the republic’s investments in the utility network and environmental protection in 2022, together with capital transfers, will amount to just over 100 million euros, which is several times less than the annual amount that, according to their estimates, the state should realize in the long term period.

The aspiration to preserve a high level of public investments of around 7.5 percent at the level of the entire country in 2022 is commendable, although the management of capital projects in Serbia is still not at the appropriate level – the Fiscal Council states, Politika writes.

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