SAO: Stagnation, slow dynamics and increased costs for infrastructure projects

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There is a standstill and slow dynamics of the implementation of strategic infrastructure projects, and the costs of the projects have increased due to a higher construction cost than originally planned, as well as secondary costs, states the State Audit Office (SAO) after the audit of performance on the topic “Indebting of public sector entities, degree of utilization of credits and loans and paid and incurred expenses” in order to answer the question of whether public investments that are financed with loan funds are realized in an efficient and economical way.
“With the conducted audit, it was established that in the management of public investments, there is no systemic legal framework, procedures, competent institutions and defined indicators for a system for monitoring and supervising the implementation of public investments, which contributes to the untimely undertaking of corrective measures, then the main projects are monitored in a decentralized manner for which there is no comprehensive picture of progress in implementation, the regulation in the field of construction as a whole does not contribute to the efficient implementation of projects according to international FIDIC conditions for construction, and the concluded construction contracts according to international FIDIC conditions cause additional costs and risks of additional claims from the contractor, risk of contract termination and international arbitration.

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