National Public Investment System of Argentina
Governing Statutory Body:
The Secretariat of Cabinet of the Minister Cabinet Leadership (JGM) is the authority to apply the SNIP. Its functions are focused on regulatory aspects and inter-institutional coordination for the formulation of the National Public Investment Plan (PNIP). In particular, it has the power to formulate instrumentation, complementary or explanatory regulations of the Law on Public Investments entering into the administrative acts required for the integral management of the SNIP. Moreover, it informs and advises Minister Cabinet Leadership of the Nation on the inter-institutional coordination for sectoral prioritization of public investment and shows them for consideration the PNIP proposal prepared by the National Directorate of Public Investment (DNIP). The DNIP is the body responsible for the SNIP and has the following fundamental goals:
1. Controlling the formulation and assessment of investment projects carried out by public entities, in terms of compliance with the established methodologies, guidelines and procedures;
2.Collaborating with the political authorities for the best selection of projects to be included in the national budget; 3. to prepare the PNIP annually; and
3. Preparing the annual PNIP; and,
4. Managing the the public investment project bank (BAPIN), which supplies adequate, timely and reliable information on public investment projects.
The National Budget Office (ONP) intervenes in the formulation, execution programming, modifications and assessment of the budgets of the National Public Administration (APN). The ONP annually communicates the budget limits to each of the APN’s institutions. Once the budget available for each entity is known, they select the projects (already assessed by DNIP) with own criteria, which will finally form part of the PAIP. The DNIP sends the investment plan to the ONP to be incorporated into the annual budget. Additionally, the ONP, in coordination with the DNIP, is in charge of supervising the budget execution of the public investment projects, as well as their physical progress. The records of this progress are kept in the Integrated Financial Planning System (SIDIF).
The entities that form the APN have the following faculties: identifying, formulating and assessing the investment projects inherent of their area, keeping the public investment projects inventory up to date, carrying out the physical-financial control of the projects, performing ex-post assessments and exchanging information with the DNIP and the ONP.
The SNIP was created by the Public Investment Law (24,354) published on August 22nd, 1994. This law determines the functions of the body responsible for the system and provides for the preparation of the PNIP. Decree 720/1995 published on May 22nd, 1995 appoints the DNIP as the body responsible for the SNIP and creates the BAPIN. This Decree also determines that the PNIP is formulated annually with a three-year projection and empowers the Secretariat of Budgetary Evaluation, Public Investment and PPP (former Undersecretariat of Budgetary Evaluation and Public Investment) to set the maximum amount of programs or projects that may be directly approved by the initiating agency for inclusion in the National Public Investment Plan (PNIP). In 2017 Decree 696/2017 modified the Law of Ministries and its modifications, assigning to the JGM the function to take care of preparation, registration, monitoring, assessment and planning of the public investment projects. As a result of this reorganization, the DNIP and its organizational dependencies are transferred from the Ministry of Production to the area of the Sub-Secretariat of Budget Assessment and Public Investment, reporting to the Secretariat of Public Policy Coordination of the JGM. Finally, Resolution SEPIPyPPP No. 1/2021 and its amendments (Art. 7 and Art. 9 - Updated by Resolution 1/2022) establishes the requirements to be met by the projects to be included in the National Public Investment Plan (PNIP), determines that the DNIP will evaluate the information submitted and issue a Technical Qualification Report in the cases included in Art. 11 of Law No. 24,354 and incorporates the establishment of annual criteria for the prioritization and selection of investment projects. See the complete legal framework
The DNIP has developed methodologies and manuals to facilitate the formulation and assessment of projects, as well as their registration in the BAPIN. The main documents include: The General Investment Project Assessment Guide to value projects based on indicators by method - Internal Return Rate (IRR) and Net Present Value (NPV) - or by technique minimal cost o cost efficiency. Some sectors have specific assessment guides (culture, education, urban solid waste and transport), the Instructions for Uploading into the BAPIN, the Conceptual Assessment Guide and the list of types of projects, types of assessment and indicators. In 2022, the Guide for the ex post evaluation of public investment projects was published.
In accordance with current guidelines, levels are established for the information requirements on the formulation and evaluation of investment projects. Three strata are defined according to the total amount of investment each year (low: less than 1/0 of the Consolidated Budget of the National Public Sector, medium: between 1/0 and 1/0, and high: higher to 1st/o). In all cases, the required information is registered in the Bank of Public Investment Projects, according to the general and sectoral guidelines, according to the requirements for each stratum. Those of low stratum can be approved directly by the initiating organizations, with basic information on formulation and evaluation (quali-quantitative indicator on the need to satisfy). Medium-tier projects must provide at least one quantitative/qualitative indicator, and one simple economic evaluation indicator that aims to establish the cost reasonableness of the proposal, as well as answer the 12 questions of the Conceptual Formulation Principles. High-level projects must complete the economic evaluation, also incorporating an indicator by method or technique (cost benefit and/or cost efficiency) established in the Conceptual Evaluation Guide, as well as the calculation bases and assumptions that support them. On the medium and high strata, the National Directorate of Public Investment issues Technical Qualification Reports, which enable these projects to be incorporated into the Budget. (https://www.argentina.gob.ar/jefatura/evaluacion-presupuestaria/dnip/evaluacion-de-proyectos/informes-de-calificacion-tecnica)
The National Public Investment Plan (PNIP) has a multiannual (3-year) horizon and is updated annually and prepared by the DNIP, in accordance with the establishments of Public Investment Law No. 24354. The PNIP outlines the investment projects that are part of the Budget Bill for the year of publication, as well as its stipulations for the years after. Consequently, it provides for the totality of capital expenses, those destined to the execution of the works and those to acquire capital goods to be executed directly by some APN body, those executed by third parties with APN resources (capital transfers), and financial investment. Likewise, projects are included for execution under the Public-Private Associations (PPA) modality. The plan is linked to other national, sectoral and territorial planning documents, since it explicitly mentions that connection. An example is the Belgrano Plan and the National Water Plan.
One of the main elements of the SNIP of Argentina is the Public Investment Project Bank (BAPIN). The APN ministries and dependencies register in the BAPIN all projects to be included into the national budget. Through the BAPIN the formulation and assessment of the public investment projects is controlled. The BAPIN assures traceability of the public investment projects from their formulation until they are finalized. At the same time, the BAPIN is interrelated with the SIDIF, facilitating budget formulation and follow-up of the physical-financial execution of the investment projects. Access to BAPIN is restricted to authorized officers. Additionally, the possibility of georeferencing public investment projects is in the process of development. In addition, there is the possibility of geo-referencing public investment projects.
In accordance with its faculties established in the Public Investment Law Art. 5, the DNIP has developed an annual training program in coordination with the National Public Administration Institute (INAP). The DNIP’s website shows the programming for the courses, which are offered presence-based to public officers of the APN. The topics are mainly methodologies for project formulation and assessment, use of the national public investment project bank, budget formulation, etc.
Public investment projects start with the identification of a need that was raised, which the formulation departments of the APN bodies depict in a project document. Through a series of questions called “Conceptual Formulation Principles” on the BAPIN project registration form, entities respond on the most important aspects of the projects such as: how the project was thought of, what the need is, the goal, what alternatives were evaluated before deciding on the one formulated, who the beneficiaries will be and the project’s geographical location. Additionally, in accordance with the investment amount, quantitative and/or qualitative indicators are to be included to assess the project (see methodologies).
Once the information has been given, as per the type of project, the DNIP determines whether the assessment is complete, partially complete or incomplete. In case of projects that exceed 1% of the Consolidated Budget of the National Public Sector, a technical opinion is given on the economic assessment and it is determined whether the formulation and assessment of the project is approved or approved with observations. The projects with a complete registration and favorable DNIP observation will be considered as priority, and then the APN dependencies must select the projects they wish to execute, in accordance with the budget limits communicated to them by the OPN.
During the execution phase, the entities of the APN are in charge of performing and informing on the physical-financial progress of the projects and registering them on the SIDIF platform of the Ministry of Finance, which shares this information with the BAPIN until the execution of the assigned budget has been finalized. The DNIP has established mechanisms for transparency and accountability, which include quarterly progress reports of all the investment projects. The DNIP gives project formulators and executors transversal access to methodological guides and manuals to facilitate their respective tasks and carries out different training workshops which are periodically published on its website. When finalizing the projects, the executing dependencies have the faculty to perform the ex-post assessments they deem pertinent.
The cycle of the Public Investment Policy in Argentina starts with the annual planning of the investments. The DNIP uses the BAPIN as the main tool for this. The BAPIN is extremely relevant since it is the only entrance of public investment projects into the national budget. In May the entities of the APN must register the investment projects in the BAPIN that they plan to include in the budget. This stage is known as the “investment demand”. Once this instance has been finalized, the political authorities define the capital expense quotas (budget limits) for each entity. Then the ONP communicates these limits and the public entities must select the projects from the “investment demand”, which they decide to include in the budget, by virtue of the assigned quota.
Once the selected projects have been communicated to the DNIP the National Public Investment Plan (PNIP) is prepared and it is sent to the ONP to be included as part of the national budget. The plan is updated annually and shows a 3-year horizon. The plan includes all public investment projects with the total investment amounts and the amounts are specified which are expected to be executed in the next 3 years. The PNIP also shows general public investment scenarios in the different sectors (public works, health, education, transport, etc.). In parallel to the PNIP there are sectoral plans such as the National Water Plan, with a horizon until 2030.
The monitoring of the execution and progress of the investment plan is done by the DNIP and the ONP based on the information reported by the APN entities in the SIDIF. Through this monitoring, an annual assessment can be made of national public investment and the conclusions of the analysis be considered for the preparation of the investment plan for the following year. The most relevant observation on the public investment of the year before can be found in the PNIP and the plan highlights the improvements that were made to the SNIP as a whole during the last budget year.
The budget formulation process for the preparation of the Budget for the year 2023 began in mid-April 2022. First, the Investment Demand survey was carried out, in which the agencies of the National Administration uploaded and/or updated in the BAPIN system the projects proposed for inclusion in the Budget. This survey reached the rest of the National Public Sector agencies that required transfers for the financing of their projects. The subsequent stages of the process, once the financing possibilities had been defined, were carried out within the FOP-ESidif (Budget Formulation Module). The agencies selected the investment projects previously registered in BAPIN directly in this system for the Preliminary Draft Budget. The Multiannual Programming of Investment Expenditures voucher to update the BAPIN continues to be used.
As a novelty of the present formulation cycle, the prioritization criteria to be taken into account by the different agencies when selecting their investment projects were established, communicated and formalized ((Joint Resolution 1/2022, RESFC-2022-1-APN-SCPYPD#JGM) those projects initiated; to be initiated that have the Technical Qualification Report in force; that have a positive impact on the generation of employment; that have an impact on enhancing technological development; that promote export activity and/or contribute to reduce imports; that contribute to the reduction of regional development gaps and that contribute to the adaptation and/or mitigation of climate change).
Latest update: November 2, 2022