R4D2 with the PWD Finance Team during the MTEP kick off session with MFEM representatives. (Photo: Marie Angeline)

On 18 December 2020, the Government of Vanuatu approved an additional budget of 2.5 billion to finance the construction of roads and local airports in Vanuatu for 2021. The additional budget resulted from the PWD’s effort in undertaking strategic budget preparation using the Medium-Term Expenditure Plan (MTEP) process introduced by the Ministry of Finance and Economic Management (MFEM) in January 2020.  R4D2 supported PWD’s finance team in the MTEP preparation. 

Mr Dimitri Malvirlani, PWD’s Administration and Finance Manager acknowledged R4D2 for the advice provided to his Finance team that led to the achievement the completion of the MTEP. He said, “The previous process was that we (PWD) waited for the budget to be approved by the budget committee before we do our planning for one year. However, last year (2020) was different. As early as February 2020, the 2021-2025 budget proposal was prepared using the draft Public Roads Policy (PRP), estimates and historical costs from all PWD units, including Fleet, Operations, Laboratory, Buildings, Airports, IT, and Human Resources”.   Based on these parameters and close coordination with MFEM, PWD was able to develop the recurrent budget and New Policy Proposal (NPP) for the 2020-2025 MTEP, including the realistic cash flow projection.

The additional budget is a significant achievement for PWD as this will help reduce the funding gap requirement for investments in the road subsector.  Five years prior, PWD’s recurrent  budget was within Vt 1.2 billion range.   With the approval of the Vt 2.5 billion for roads and local airport infrastructure, this increases PWD’s budget to 222%. While still insufficient to finance the requirements under the recently approved Public Roads Policy, which PWD used in their presentation to the budget committee, this is already an essential step towards increased investments in the subsector.