Romania to stop government-funded infrastructure investments programme.

By bne IntelliNews April 17, 2012
Romanias development ministry has prepared an ordinance to cut down the size of the local infrastructure programme PNDI by RON 15.9bn (EUR 3.65bn) to only RON 5bn (EUR 1.15bn), Ziarul Financiar daily reported. Under the decree, only the projects that have already started will be completed because of budget constraints. The investment programme, which includes local road repairs, water and sewage projects in rural areas and small towns, was previously announced by the government as one of the main growth drivers for this year. The IMF has criticised during its quarterly review of the stand-by programme with Romania the off-budget capital projects such as PNDI, saying that they go in the wrong direction in terms of improving transparency and control of public resources. Such projects should be halted, the Fund has recommended. Nonetheless, the latest letter of intent (LoI) sent by the government to the IMF and endorsed by the Funds Board, set a ceiling of RON 10bn for works contracted under the PNDI this year. In 2011, the government approved a multi-year PNDI program of about RON 20bn (4% of countrys annual GDP) that will invest in rural and small town infrastructure projects, such as water, sewage, roads, the LoI has specified. The works will be undertaken in 20122020 with budgetary payments made in 2015-2020.

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