Staff Correspondent

Delay in procurement resulting from reluctance of contractors and officials in an atmosphere of fear and soaring prices of construction materials slowed the development spending to four years’ low in the first half of 2007-08 fiscal, an official report reveals.

During the July-December period of the current fiscal year, the government could spend Tk 5,493 crore, which was only 21 per cent of the Tk 26,500 crore annual development programme.

The development spending was 25 per cent in the year-ago period.

The dismal scenario was reflected in the planning ministry report discussed at a meeting of the Executive Committee of the National Economic Council, the government’s highest policymaking body, presided over by chief adviser Fakhruddin Ahmed on Wednesday.

Procedural complexity in releasing money, lack of capacity of officials involved in project implementation process, impacts of cyclone Sidr and lack of proper monitoring were also blamed for the poor development spending.

The implementation rate was the lowest in four years, and finance ministry officials said it would be even lower if some exaggerations in the report were corrected. For example, an official cited, the post and telecommunications ministry spent only 3.6 per cent of the ADP money in six months to December 2007, while the Planning Commission report showed it to be 7 per cent.

The rate seemed not upsetting yet for the government. ‘The ADP implementation has attained higher pace after November,’ finance and planning adviser AB Mirza Azizul Islam told reporters after the meeting at the NEC Bhaban.

He pointed out that only December saw six per cent utilisation of ADP money. Historically, the major portion of the development budget is implemented in the second half of the fiscal year, said officials concerned.

The adviser also ruled out the possibility of any kind of anarchic situation due to the sluggish implementation of the development programme in the first half.

‘There is no likelihood of anarchic situation,’ he said when asked if the slow implementation would leave a negative impact on employment.

The first six months of the previous fiscal year [2006-07] witnessed implementation of 25 per cent of the development programme, while spending rates were 27 and 29 per cent in the first half of fiscal years 2005-06 and 2004-05 respectively.

The ECNEC chair and chief adviser was said to have asked the secretaries to closely monitor the process of implementation for expedition and also gave a directive not to transfer project directors in quick succession and stop appointments from officials awaiting retirement.

The meeting also endorsed 11 projects worth Tk 4750 crore. Eight projects will be entirely funded by the government while international donors and lenders will provide Tk 1467 crore for the rest three.

Only 10 ministries account for 81 per cent of the ADP allocation. Of them, performance of six improved while that of the rest deteriorated, the adviser admitted.