Ministries, including the Interior, Housing and the Israel Lands Administration (ILA), don't use the budgets allocated to them for planning and infrastructure development, according to an analysis by economists of the association for self-employed architects and engineers.
In 2002 ministries used NIS 6 billion out of NIS 8.7 allocated to them for planning and implementing development projects - just 69 percent of the budget. The analysis is based on the 2004 budget proposal and a review of the use of the 2002 and 2003 budgets in sections relating to planning infrastructure master plans, as they appear on the Finance Ministry's Internet site.
The economists claim that through September 2002, government ministries used only 42 percent of the budget allocated for infrastructure development. The development budgets are used among other things to design master plans (under the auspices of the Ministry of Interior); water and sewerage facilities (under the auspices of the Ministry of National Infrastructure); planning and development in the minority sectors (under the auspices of the ILA); for developing roads (under the auspices of the Ministry of Transportation); and development projects in advance of the construction of new neighborhoods (under the auspices of the Ministry of Housing).
Eldad Spievak, chairman of the association of self-employed architects and engineers, said that despite the Knesset's approval of planning and development budgets, government ministries do not use them.
The eventual result, he says, will be the creation of statutory bottlenecks when there is a decision to do a large number of projects at the same time.
"There is no inventory of plans, there are no contingency plans and therefore even when the economy recovers, it will not be possible to implement the plans because of planning problems. Everyone is talking about investing in infrastructure, but in the end everything has been merely all talk."
So, for example, the Ministry of Housing's development budget for 2002 totaled NIS 1.2 billion. According to the Finance Ministry data, the ministry used NIS 446 million only, or 35 percent of the allocated funds. In 2003, it was allocated NIS 940 million, of which only NIS 476 million was used through September 2003, or just 51 percent. The ministry's development budget for 2004 totaled NIS 620 million.
The Ministry of Interior's development budget for 2002 totaled around NIS 111 million. According to the Finance Ministry data, the ministry used just NIS 75 million of that sum, or 52 percent of the allocated sums. In 2003, it was allocated NIS 95 million, of which it used only NIS 64 million through September 2003, or just 49 percent.
The ministry's development budget for 2004 amounts to NIS 65 million. An analysis of planning budgets shows that general planning budgets of the ILA for 2002 amounted to NIS 155 million.
According to Finance Ministry data, the ILA used only around NIS 71 million, or just 46 percent of the budget allocated to it. In 2003, the ILA was allocated NIS 130 million, of which it used only NIS 30 million through September 2003, or 23 percent. The ILA's total general planning budget for 2004 is NIS 100 million.
The Ministry of Interior's planning budget for master plans totaled NIS 29 million in 2002. According to Finance Ministry data, the ministry used only NIS 5 million of that sum or 19 percent of the budget allocated. In 2003, the ministry was allocated NIS 23 million, of which only NIS 6.5 million or 29 percent has been used through September 2003. The ministry's planning budget for master plans in 2004 totals NIS 9 million.
In a letter he recently sent to Finance Minister Benjamin Netanyahu, Spievak wrote: "The government states that investment in infrastructure will extricate the economy from the recession and at the same time, government ministries do not utilize the planning budgets approved for them in the state budget by the Knesset, while cutting budgets allocated for building infrastructure in 2004."
Spievak further wrote that the engineering and architectural industries are in an unprecedented low due to the situation of the economy in general and the construction industry in particular and that the existing production and planning power is far greater than the findings indicated by projects in the private and public sector.
There his view is backed by trends and actions by government and public agencies, that unnecessarily harm the industry, such as commissioning planning from foreign entities and unrestrained tenders for planning fees.
According to Spievak, all of these may lead the industry to wide-scale departure from the power of planning and knowledge accumulated, and to a substantial drop in the quality of planning.
Lior Dushinsky, a member of the economic council of the association of self-employed architects and engineers, says that the association is planning to advise the Finance Ministry to set up a monitoring committee, that will obligate government ministries to present detailed working plan for development and planning, including timetables. The government ministries will report once each quarter on their progress.
The association added that if there is no change in government ministry policy, they will consider petitioning the High Court of Justice or the State Comptroller. The chairman of the association of construction and infrastructure engineers, Yoav Sarna, said in reference to the data that the prime reason for the failure to utilize the budgets is bureaucracy in the planning authorities.
This starts with the local authorities and moves through the district committees and the various bodies with the authority to approve plans: "There is no binding target date for approving any given plan, there is no supervision and there are no timetables. The planning committees delay approval of plans for months and years, and return the plans with minor changes. Ostensibly, this is a planning process, but in practice, the feeling among all those handling the approval of plans is a lack of urgency. Bureaucracy is what is halting the economy's wheels of growth."
The acting deputy director of the Ministry of Interior's planning administration, Dan Amar, responsed to the data in the infrastructure budgets analysis. According to ministry working arrangements, when there is a decision to prepare a master plan and a deal is signed with a planner, all the funds designated to prepare that project are allocated in advance, even if preparing the plan takes two to three years and sometimes longer.
Therefore, a situation has been created where the money is transferred from one year to the next, without it being used for other needs since it is designated solely for preparing the specific plan.
Amar said this method guarantees the completion of the program regardless of cuts or changes in the budget over the years. However, that is also why ostensibly it seems that the budget is not being fully used. He said the Ministry of Interior is now reviewing the possibility of changing the budget method to enable greater flexibility.
The Finance Ministry said that even when the budget is approved, the money is paid only for projects that are implemented. The money for projects that are not completed in accordance with predetermined timetables is rolled over to the following year. Thus even if it appears the budget is not being fully used, it occasionally refers to a roll over from a previous year.
The Ministry of Housing said the ministry would be happy to have budget surpluses remaining, since we are in a situation where "a scrap will not satisfy a lion." The bottom line, according to ministry data is that investments for 2002-2003 infrastructure spending will be fully used.
Ministry officials say that in long-term projects, lasting five to ten years, budgets are allocated only for that a specific project and if it is not fully used, it is rolled over to the following year and may not be used for other projects. (A.G.)
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