Colombia eyeing budget amendments for delayed infrastructure projects

Colombia intends to reschedule investment budgets for infrastructure projects that stretch over multiple fiscal periods but fail to progress according to schedule.

"If the work is delayed, it makes no sense to allocate resources only for them to end up being stuck in a trust. The goal is to prioritize the budget and disburse it based on the progress of the work," said finance minister Ricardo Bonilla in an arbitration forum.

The finance ministry has a draft decree, which would give President Gustavo Petro the authority to reschedule the budgeting.

If the decree is indeed issued, it would mean that decisions on projects involving future fiscal periods would be centralized with the president, which would affect the transparency of public finances.

"Petro will be the finance minister, mining minister, transportation minister, head of planning, and head of any portfolio that has an investment project financed using future fiscal periods, already controlling spending as we look toward 2026," economist Andrés Valencia, who served as agriculture minister under former president Iván Duque, said on social media.

The draft decree establishes that investment projects, entities that belong to the executive branch and are included in the national budget, must request presidential approval once they obtain the green light from planning department DNP in cases of authorizations of future fiscal periods or rescheduling and budget transfers.

Bonilla said that any project declared strategically important will remain so, but the country needs the initiatives to progress, so they must be assessed and if there is no progress, the funds can be allocated to other projects.

News website Valor Analitik quoted Bonilla as saying that “perhaps I would keep an eye on the most emblematic of all – Mulaló-Lobo Guerrero [highway], which has 1.8tn pesos [US$460mn] locked in a trust and this year we would have to disburse 450bn pesos,” funds that “could resolve the problems of some roads such as Rosas in Cauca and Villa Aldeana.”

Line No. 1 of the Bogotá subway could also be evaluated. “It has been declared strategically important and what is being evaluated this year is whether it really needs funds this year because it has enough cash and is behind schedule,” Bonilla said.

The announcement of the new decree on future fiscal periods comes a few days after the government outlined 13tn pesos in the budget for more than 100 infrastructure projects throughout the country, after a wave of criticism of the lack of specific budgetary items for these developments.

With this decision, the government also announced that a report on the status of the infrastructure works will be published in March, since some have been halted, others will have to be concluded in the next two months and others are advancing slowly.

Bonilla underscored that concession contracts stipulate that disbursements must be made in line with the progress of the works.

The draft version of the new decree can be downloaded in the Documents box in the top-right corner of the screen.