Montenegro BusinessNewsMontenegro, why is the realization of capital projects late?

Montenegro, why is the realization of capital projects late?

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In the first three months of this year, the Directorate for Capital Projects and Traffic realized EUR 13.24 million worth of projects, which is only 28% of the realization compared to the plan, data from the Ministry of Finance showed.

According to the data provided to Vijesti, work has not even started on over a hundred projects included in the capital budget. The main reasons why only a little more than a quarter of the planned money was spent on the planned capital projects are unsecured project documentation, unforeseen additional works, property disputes, but also the fact that unprepared capital projects are introduced during the adoption of the budget in the Assembly.

By March 31, a total of EUR 13.24 million was realized, and it refers to projects that were started in the previous period. In relation to the three-month spending plan, which foresees a total of EUR 47.1 million for the implementation of capital budget projects, the implementation so far, as of March, is at the level of 28.1% – the Ministry announced.

They stated that the Traffic Administration paid EUR 9.5 million for capital projects, and the Capital Projects Administration paid EUR 3.8 million. According to this year’s capital budget, which envisages over 290 projects, the Traffic Administration will implement investments worth EUR 90 million, and the Capital Projects Administration will implement investments worth EUR 112.7 million. The Railway Administration should invest EUR 22.8 million in the development, regulation and supervision of railway traffic.

When asked what are the main reasons for the delay in the completion of some of the projects, the Directorate for Capital Projects explained to Vijesti that these are usually deficiencies in the project documentation, which is why they must work on its additions and improvements before the tender is issued or the works begin.

There are also frequent changes to the revised main project, which results in the appearance of additional and unforeseen works. In accordance with the current legal regulations, additional and unforeseen works, which are not included in the basic contract, must be contracted through a tender procedure – the Administration explained.

Until the conclusion of the procedure for contracting the necessary additional works, the execution of works on the building itself is, as stated by the Administration, suspended or its execution is extended until the contracting of all the works that are necessary in order to achieve a functional and technological whole.

They also said that the realization of a significant number of projects was prolonged due to property-legal relations, the resolution of which is not within their jurisdiction. When asked if the delay in the implementation of projects is also due to the increase in prices in the construction sector, the Capital Projects Administration explained that because of this, the contractors turned to the competent Ministry of Finance, which at the end of December adopted information that included the methodology for determining the difference in prices and subsequently prepared guidelines for their application.

In accordance with the aforementioned documentation, contractors who consider it expedient prepare documentation that proves the increase in prices, and on the basis of which annexes to the contract with the Administration for Capital Projects will be concluded. With the mentioned conclusion of the Government, the contractors are also able to terminate the contract if they believe that through the mentioned methodology and guidelines they cannot achieve the desired changes in the contracted prices of goods and services, which is what some of them decide to do. All of the aforementioned problems are not within the competence of the Administration for Capital Projects, and directly affect the implementation of projects and the overall implementation of the capital budget – the Administration stated.

The Directorate for Capital Projects also said that before starting the implementation of a project, it is necessary to carry out preparatory actions, stating that it is impressive that during the previous years, mostly already contracted activities were carried out on old projects, and that new ones were not adequately prepared.

As many as 110 projects included in the capital budget for last year were not realized at all. In the second half of last year, the Directorate for Capital Projects started solving numerous open issues that slowed down the dynamics of the implementation of the started projects or even led to their suspension, and special attention was paid to the preparation of new projects – said the Directorate.

This is supported, as they state, by the fact that the Directorate for Capital Projects announced 34 public tenders in December out of a total of 124 last year. They emphasized that the trend of project preparation continued this year, so a significant number of them are in the final stage of preparation and tendering.

Contracting and intensive implementation of these projects is expected in the second half of the year and will continue in March, which will be the year of construction, and after quality preparation in the current year. The capital budget for last year included as many as 97 new projects out of a total of 291 projects, which are most often included as amendments for implementation through the budget. Given that for a significant number of new projects we have not yet received documentation from the initiators, it can be concluded that they are immature candidates and covered by the Budget Law – said the Administration.

 

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