The Government of Colombia sought to strengthen the capacity of its Bank of Public Investment Projects. Weak capacity and systems made it difficult to manage projects and coordinate among subnational governments in the planning and execution of public investment projects.  The opportunity for a knowledge exchange with Peru presented Colombia with the direction it needed to improve the strategic vision of BPIN.

Challenge

More than half of Colombian national resources flow directly to the regions, but execution rates at the subnational level remain low mainly because of weak capacities and systems. The Government of Colombia recognized the need to strengthen the  capacity of its Bank of Public Investment Projects (BPIN). It needed a better solution for managing projects financed with transferred central resources or other external funding entities and for improving project coordination among subnational governments (SNG).

The BPIN is responsible for transferring resources to municipalities and departments for the delivery of education, health, and water and sanitation services. Since 2000, the central government has been developing indicators and strengthening capacity to properly monitor these central-financed services delivered by subnational government; but national goals such as improving tracking, monitoring, and controlling SNG compliance have not been achieved.  Enhancing the capacity of the BPIN would strengthen the central government’s capacity to manage the Decentralization and Territorial Management Framework and reduce the risk of investment fragmentation and low-quality projects from subnational governments.

Solution

The learning exchange offered a unique opportunity for the Colombians to interact with representatives of well-established decentralized public program systems in neighboring Peru, the Fondo de Cooperacion para el Desarrollo Social (FONCODES) and Sistema Nacional de Inversión Pública (SNIP).

A team of decision-makers from Colombia’s Department of National Planning (DNP) and Ministry of Finance and Public Credit traveled to Peru May 19-23, 2014. For the first two days, the Peruvian Ministry of Finance offered presentations on the SNIP theoretical framework, structure, operational platform, and information system and methodology. Delegates from Colombia also met with representatives from FONCODES to learn about its planning and decentralization. Managers presented FONCODES’ strategy, economic opportunities, and subnational programs.

Traveling to Tarapoto in the Amazon region, the DNP delegates visited three local FONCODES-financed projects: one cacao plantation and two bridges over the Mayo River connecting key communities and supporting their local economies. Local staff explained how investment projects are evaluated, coordinated, and approved at the subnational level using external agents and executed through a model of participatory and transparent local public investment. This model consists of a private community-representative body, with participation in the local government, which manages and administers the project funds from the implementation phase to completion and delivery to the community.

While the DNP group visited Tarapoto, a parallel session took place between Peru’s Ministry of Finance and three representatives from Colombia’s Office of Fiscal Support in the Ministry of Finance and Public Credit (MHCP). This session was organized in response to Peru’s request to learn from good practice approaches in the implementation of transparency initiatives, making this a true reciprocal knowledge exchange between countries.

Following the field visit, delegates prepared a report and short video for dissemination to a wider audience in Colombia and provided a dissemination workshop in collaboration with Colombia’s Department of National Planning, the Peruvian Government, and the World Bank.

Results

• Colombian team improved BPIN capacity to support the decentralized system and learned perspectives on permanent coordination mechanisms for territorial strategic planning.
• Colombia delegates emerged with a clearer understanding and practical experience in utilizing project management tools and templates generated during the creation of social and infrastructure development funds.
• Both government teams agreed to work on a common agenda and action plan for further discussion of key issues such as royalty systems and policies, budget classifiers, monitoring and evaluation strategies, and implementation of specific subnational project templates (formularios) for the design of sectoral projects and the spirit of the Contratos Plan (framework contracts between the central government and subnational governments).
• The Colombian team acknowledged the need for establishment of permanent coordination mechanisms at the national level for territorial strategic planning.  The Bank team offered to serve as facilitator of this ongoing dialogue by facilitating the working sessions via videoconference from local offices in both countries and providing technical inputs and

Lessons Learned

There were no lessons learnt from this Exchange.

World Bank Group Contribution

The commitment from the World Bank to the subnational agenda is very high and on December 24, 2013, the Government of Colombia signed a US$70,000,000 loan with the World Bank for the financing of a Subnational Institutional Strengthening Project. For the next 7 years, the Bank will provide technical and financial assistance to the Government of Colombia in the following areas agreed in the project’s document: (a) structuring regional and local projects and designing long-term territorial strategic planning tools; (b) applying incentives for territorial management; (c) providing technical assistance support to SNGs; (d) strengthening control and monitoring of territorial management.

Partners

Project partners and their contributions, implementing bodies.

Colombia

• Department of National Planning (DNP)
• Ministry of Finance and Public Credit (MHCP)
• Bank of Public Investment Projects of Colombia (BPIN)

Peru

• Cooperation Fund for Social Development (Fondo de Cooperacion para el Desarrollo Social FONCODES) from the Ministry of Development and Social Inclusion (MIDIS)
• National System for Public Investment (Sistema Nacional de Inversión Pública, SNIP), managed by the Ministry of Finance (MEF)

Moving Forward

The Peruvian authorities expressed interest in further promoting and participating in this type of knowledge exchanges in the near future. They are particularly interested in visiting DNP and Ministry of Finance and Public Credit (MHCP) in Colombia to learn about the monitoring and evaluation system that the Colombian Government has in place in addition to some current innovations such as the Contratos Plan and the recent royalties reform. In turn, the Government of Colombia will train SNG representatives on the use of these resources for successful project implementation. The learning program will serve as useful input for DNP in the design of a strategy for SNG participation in the management of public investment projects. This strategy would be implemented during the next 2-6 years and hence would have a long-term impact.

Beneficiaries/Participants

Participants from the Government of Colombia comprised staff from the Department of National Planning and Ministry of Finance and Public Credit, including high-level policy- and decision-makers in the area of public investment as well as technical staff:

From Colombia:

• Director of Investments and Public Finance (DIFP).
• Advisor to coordination group of the General System of Royalties (SGR) in DNP.
• Javier Villareal, Coordinator of the General System of Royalties (SGR), DNP: "This exchange with Peru has allowed us to learn from innovative experiences in regards to the public investment cycle and the generation of local capacities. The knowledge gained during this week, will help our government to strengthen the SGR through a strategy focused on the development of subnational capacities.”
• Hernan Velandia, Focal Point for the Eastern Plains Region (Region Llano), DNP: "The visit to Peru has allowed us to witness how the different levels of government address local populations of real problems. We return to Colombia more enriched with knowledge on practical procedures on how to strengthen our public investment processes."

From Peru:

• Nelson Pinedo, Jefe (e) de la Unidad de Inversión facilitadora de FONCODES.
• Jesús Ruitón, Director de Inversión Pública, Dirección General de Política de Inversiones (DGPI).
• Eloy Durán, Director General de Políticas de Inversiones (DGPI), SNIP, Ministry of Finance.

Learn More

www.foncodes.gob.pe
www.snip.gob.pe

Short documentary on exchange: https://vimeo.com/109251111