Minister of Finance Mohamed Shafeeq said on Sunday that the administration has suspended spending on structural development projects to prioritise ongoing projects which have been budgeted for. The minister was responding to opposition allegations of abandoned development projects, while financial reports also show low spending on Public Sector Infrastructure Program (PSIP) projects.

Shafeeq said that rumours that PSIP projects have stalled are not entirely accurate.

“There are some projects, for example, some dredging projects, which have an allocation of about MVR 5 million for the project. But it is estimated that it will cost three or four times as much to run the project,” he said.

According to the 2024 Budget, MVR 8.6 billion has been allocated across 1,780 projects under PSIP. Most of these are ongoing and contracted while 331 are new projects.

Spending on PSIP, as per the budget, was projected as MVR 3.2 billion from the State budget, MVR 4.6 billion from external borrowings, MVR 389.5 million from grants and MVR 380.9 million from the trust fund.

Shafeeq said that while the budgeted amount was MVR 9 billion, a proper estimate would come in at MVR 12 billion.

Therefore, work is now underway on projects with fixed funds and cash flow, he said. He also noted that projects which had not begun lacked the proper funds.

Some projects have not yet started but no projects have been cancelled, Shafeeq assured, adding that reports show that expenditure on PSIP has increased month by month since the administration took office. He said that as the assessments currently being conducted by the finance ministry are completed, projects will begin in the future and PSIP expenditure will increase further.

The government’s expenditure during the first two months of the year was lower than its revenue due to a suspension in PSIP projects.