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Politike

"A hidden debt for...", KLSH publishes the findings from the report on the compatibility of objectives with budget realizations: PPP risk for the public budget, increase the exposure to financing

"A hidden debt for...", KLSH publishes the findings from the report on

Concession contracts and unaccounted arrears in debt and arbitration cases threaten transparency and the state budget.

In the report on the compatibility of the objectives with the budget realizations, KLSH evidences that for a number of public entities of the central and local government, there is an increasing trend of the use of PPPs, which present a fiscal risk.

Concession contracts, according to the audit authority, expose public authorities to financing to complete the payments of these contracts, thus increasing the fiscal burden of citizens.

"The increase in expenditures for concessionary contracts/PPP from year to year constitutes a fiscal risk for the budget, moreover, in the absence of measurable indicators of their performance, it is questionable the timely achievement of their objectives with efficiency, economy and effectiveness. Also, since these concessionary/PPP contracts are budget-supported and the concessionaire has no responsibility or financial commitment, these expenses from the state budget are a hidden debt for the following years", says KLSH.

Also, according to KLSH, the accumulation of arrears to concessionaires is not included in the calculation of public debt in statistical reports, thus reflecting an underestimated and unrealistic value.

The high state audit assesses that the lack of an analysis on the causes, level and increase of these obligations hinders the possibility of drawing accurate conclusions and giving the most suitable recommendations.

Arrears, according to the report, represent a fiscal risk, not only for the budget indicators of the responsible institutions, but also at the macroeconomic level, since despite the fact that these obligations are not calculated and recorded in the public debt indicators, they underestimate the latter, since they are obligations that will be settled in the future.