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In 2018, the planned expenses of the Ministry of Regional Development and Infrastructure were GEL 1.8 billion which was adjusted in December 2018 and shrank to GEL 1.58 billion. In accordance with the official data, 2018’s budget was executed at 104.89%. However, had the adjustment not taken place, a full execution of the budget would have been impossible. The budget adjustment took place precisely to execute the budget plan. In addition, GEL 658.4 million (41.56% of the adjusted budget) was spent from the budget in the last month of 2018. More precisely, these funds were transferred from the budget, mostly as advance payments. Taking this into account, we can conclude that the 2018 budget of the Ministry of Regional Development and Infrastructure was executed on paper only and spending money for infrastructural projects was problematic.

For the first half of 2019, the budget of the Ministry of Regional Development and Infrastructure was executed at 100.1%. Additionally, the budget plan was executed at 100.4% in 2017 as well whilst in other years spending always lagged behind the plan. Therefore, in the nearest past there was no clear-cut trend of execution of the six-month budget plan.

Analysis

The Prime Minister of Georgia, Mamuka Bakhtadze, spoke about the budget of the Ministry of Regional Development and Infrastructure and stated: “This year, we gave 20% more budget to the Ministry of Infrastructure and in accordance with the six-month data, they are fulfilling their task at more than 100%.”

In 2018, funding for the Ministry of Regional Development and Infrastructure was GEL 1.58 billion (adjusted) which is nearly 20% less as compared to the funding for this year (GEL 2 billion). In accordance with the official data, 2018’s budget was executed at 104.89%. However, of note is that 2018’s budget was cut by GEL 230.9 million in December last year. Had the adjustment not taken place, a full execution of the budget would not have been possible. The budget adjustment took place precisely to execute the budget plan. In addition, GEL 658.4 million (41.56% of the adjusted budget) was spent from the budget in the last month of 2018. More precisely, these funds were transferred from the budget, mostly as advance payments. Taking this into account, we can conclude that the 2018 budget of the Ministry of Regional Development and Infrastructure was executed on paper only and spending money for infrastructural projects was problematic. Therefore, it is not relevant to compare the adjusted amount to 2019’s planned amount. The planned for 2019 amount exceeds 2018’s planned amount by 10% whilst it exceeds 2018’s adjusted amount by 20%.

Table 1: Adjusted Budgets of the Ministry of Regional Development and Infrastructure in 2012-2019 and Rate of Execution (GEL)

Year

Budget (Plan)

Budget (Adjusted)

Fact

Execution

Share in Total Budget

2012

717,115,100

767,980,011

655,075,159

85.29%

8.86%

2013

901,000,000

1,003,599,800

798,595,100

79.57%

10.29%

2014

875,000,000

935,734,500

904,963,100

96.71%

9.63%

2015

869,501,000

880,149,200

898,398,000

102.07%

9.03%

2016

950,000,000

967,461,900

971,817,600

100.45%

9.22%

2017

1,288,047,000

1,323,847,000

1,355,150 200

102.36%

10.98%

2018

1,815,000,000

1,584,100,000

1,661,664 448

104.89%

14.56%

2019

2,000,000,000

-

-

-

15.27%

Source: Ministry of Finance of Georgia

Table 2: Six-Month Plan and Execution in 2013-2019 (GEL Million)

Year

Six-Month Plan

Six-Month Execution

Execution Rate (%)

2013

235

223,3

95,0

2014

419,6

305,4

72,8

2015

379,4

352,7

93,0

2016

389,8

360,1

92,4

2017

581,1

583,4

100,4

2018

555,6

490,5

88,3

2019

672,9

673,4

100,1

Source: Ministry of Finance of Georgia

In the first half of 2019, the budget of the Ministry of Regional Development and Infrastructure was executed at 100.1%. Additionally, the budget plan was executed at 100.4% in 2017 as well whilst in other years the six-month spending always lagged behind the plan. Of note is that in the nearest past there was no clear-cut trend of execution of the six-month budget plan.

Of additional importance is that in 2012-2017, with 2015 being the only exception, the adjusted budget of the Ministry of Regional Development and Infrastructure increased vis-à-vis the planned budget whilst the adjusted budget decreased in 2018. There were serious failures on certain sections of the high-speed highway. The planned budget for the construction of the high-speed highway in 2018 was GEL 823.8 million whilst this amount decreased precisely by GEL 149.3 million (to GEL 674.5 million) in December. In addition, GEL 491.2 million was spent from the budget in December alone.


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