Local
The Ministry of Planning announced on Friday the completion of the initial draft of the investment framework for the 2027 budget, simultaneously confirming that accumulated contractor dues amount to approximately 8 trillion Iraqi dinars. Maher Hammad Juhan, Undersecretary of the Ministry of Planning, revealed that the ministry is a key part of preparing the "Programs and Performance Budget" for 2027. He explained that the ministry supports this program through two frameworks; the first aims to clarify the detailed concepts of this budget, leveraging the ministry's previous experience and implementation stages. The second framework focuses on measuring this budget, which he described as "easier and clearer" due to its direct link between outputs and inputs. Juhan elaborated that the fundamental idea of the Programs and Performance Budget is not to list detailed financial expenditures for immediate items, but rather to specify the allocated amount for an entity and its expected output. For instance, he noted that building a school to serve a larger number of citizens would be specified as the output, instead of allocating 100 million for fuel expenses and worker operations. Juhan indicated that meetings are ongoing to delineate the Programs and Performance Budget related to the investment budget. He confirmed the ministry's representation by the Director General of the Economic and Financial Policies Department, in addition to his own representation with the acting Minister of Planning. Regarding the investment framework for the upcoming budget, Juhan affirmed that the Ministry of Planning has completed its first draft following extensive reviews with sectoral entities, governorates, and the Ministry of Finance. He explained that the ministry built the framework on 3 or 4 options, preferring the fourth. One option focuses on the needs of ministries, entities, and governorates for spending in the coming year, which is considered but not solely relied upon. The second option, however, depends on the Ministry of Planning's vision and its assessment of project progress. The third option relies on the financial capacity of the Ministry of Finance and the execution capabilities of entities. Juhan clarified that the Ministry of Finance's capacity is assessed from previous years, based on its ability to provide appropriate funding. Accordingly, the volume of funding for 2027 is estimated, with a complete understanding of the challenges, obstacles, and the implications of the regional crisis between the American side and neighboring Iran on the primary economic resource. Concerning the prioritization of projects amidst financial pressures, Juhan stated that the adopted final option largely depends on the actual achievements of entities and ministries in 2026, serving as a primary framework for completed works advances and required appropriations, with a minor addition for what is anticipated. He noted that the allocated amount is still under review, but aims to be approximately 25 percent of the anticipated budget. He clarified that a portion of it will be allocated for ongoing and new loans, while the other part will support the general budget, expecting the volume as a percentage to be no less than 20 to 25 percent of the state's total general budget. Juhan emphasized that the ministry considered resource scarcity from the outset of its discussions, establishing a clear mechanism for prioritizing projects. This mechanism involved giving priority to projects closest to completion, selecting projects with the most urgent public need, and arranging other priorities on this basis. He pointed out that the ministry is not in favor of adding new projects except in extremely critical cases, given the large number of ongoing projects that provide essential services. He opined that it is preferable to complete and deliver these services rather than initiating new projects that may remain unfinished. Juhan added that the goal is to finalize what was started previously, and not to add any new projects except in very critical situations, before existing projects are completed by the respective entities. A formula or calibration might be introduced to allow for a new project for an entity that successfully completes and operationalizes a previous one. Regarding the number of ongoing and stalled projects, Juhan clarified that the exact figure is not immediately available, but it is approximately 3000 projects across ministries. He noted that the ministry undertook significant budget streamlining this year, reviewing project components and those not yet initiated, and requested entities to reassess their feasibility studies, leading to noticeable streamlining in the budgets of all ministries and governorates. He reported that there are projects with very high completion rates (97 or 98 percent) that remain suspended. He stressed that the ministry's directive to the entities is to bring these projects into service and remove them from the general budget, expressing regret that nearly completed projects are stalled due to minor services like a water or electricity pipeline. He indicated that the ministry possesses a list of stalled projects, with detailed figures to be provided later, expressing concern that current conditions might lead to a recurrence of stalled and halted projects. Juhan mentioned that the ministry requested information on which ongoing projects have stopped. While most entities have not officially reported a halt, confirmed information indicates a significant decline in their productivity rates, with project activities notably reduced. He added that over the past three years, the ministry has made significant efforts to revive many projects from their stalled state and bring them back into service, after they remained from the 2014 crisis. However, the current crisis might lead to a repeat of this experience, warning that projects returning to a stalled state result in very significant impacts and damages related to their deterioration, delayed service provision, changes in item prices, and many other issues. Regarding the financial dues of contractors and companies, Juhan confirmed the existence of "real and documented accumulated dues for contractors totaling approximately 8 trillion dinars." He indicated that the state has begun settling a portion of these amounts in the governorates, and there is a direct directive from the Prime Minister to settle these dues in the coming months, with the percentage of settlement potentially reaching over 20 percent of the total amount. He emphasized that contractors represent the private sector and are partners in construction, and their work positively impacts the creation of thousands of job opportunities. He affirmed the ministry's commitment to diligently work, pressure, and strongly support the Ministry of Finance and the Council of Ministers in ensuring the provision of private sector dues related to projects.
