National Public Investment System of Colombia
Statutory Governing Body:
The statutory governing body of the National Public Investment System in Colombia is the National Planning Department (DNP) through the Directorate of Finance and Public Investment (DFIP). Its main functions are the following: determination of guidelines and methodologies to be used for investment project formulation and assessment. The DFIP also manages the Unified System for Investment and Public Finance (SUIFP). Once the projects have been registered, the Sectoral Technical Directorates are responsible for technical analysis and issuing viability opinions. The DFIP, in turn, is responsible for aligning the investment projects with the National Development Plan. The DFIP annually prepares the Annual Operative Investment Plan and submits it for revision and approval to the National Council for Economic and Social Planning (CONPES). The CONPES is the highest national planning authority and is the government's advisory body in all aspects related to the country’s economic and social development. To achieve this, it coordinates and orients the organizations in charge of economic and social management by studying and approving documents on the development of general policies presented in the session. The Vice-President of the Republic forms the CONPES, all the ministers, the Director of the Administrative Department of the Presidency of the Republic, the Director of the National Planning Department, and the Director of the Administrative Department of Science, Technology, and Innovation.
The Colombian Ministry of Finance participates in the public investment cycle as the key stakeholder because it is, among other things, responsible for preparing the Medium-Term Tax Framework, which projects the public investment budget and is an important input for the determination of the budget limits for public investment, the preparation of the National General Budget (PNG) and the budget of the General Royalties System, as well as following up on their execution and assessment.
The public entities that receive resources from the PGN, being the main entities in charge of investment projects, participate in their entire life cycle. Their main faculties include formulation, assessment, prioritization, execution, and operation of investment projects. During these stages, they are subject to the guidelines established by the DNP according to the legal framework in force.
There are different legal instruments that regulate public investment in Colombia in a coordinated way. The main laws include the Organic Law of the National Development Plan, which, among other things, mandates the preparation of the Pluriannual Public Investment Plan as part of the PND, as well as the delimitation of the roles of each of the public entities in terms of planning, formulation, execution, and assessment of public investments. Additionally, there are Decrees and regulations for the detailed instrumentalization of the Law, such as the enforceability of using the methodologies developed by the DNP and the use of the Investment Project Bank. In parallel, Organic Statue Law 38 of the General Budget of the Nation (PGN) establishes the guidelines for budget formulation, including the budget destined for public investment. It determines the procedures the public entities that are financed with PGN resources must submit to. See the complete legal framework.
Through the Investment and Public Finance Directorate, the DNP puts the General Methodology for identification, preparation, and ex-ante evaluation of public investment projects at the disposal of the public entities. To contribute to these processes, a web platform is designed based on the methodology that facilitates the formulation and assessment process of the projects. In accordance with Law 152 of 1994 and Resolution 4788 of 2016, the General Adjusted Methodology is an information tool of Internet Access (MGA WEB). The MGA mainly aims at registering and presenting the formulation and structuring of the public investment projects to manage them before the national and territorial entities. Furthermore, as part of the process of quantification of the projects’ benefits, the general methodology provides for the calculation of the Economic Net Present Value (EVPNE), the Economic Internal Return Rate (EIRR), Equivalent Annual Cost (EAC), and the multicriteria assessment for the non-quantifiable factors. See the full list of methodologies (Available only in Spanish).
The 2018-2022 Pluriannual Investment Plan is the document that includes investment projects that are considered a priority to reach the goals of the National Development Plan (PND). The Plan estimates investment amounts per sector per region, per department, and per each of the PND agreements (strategic pillars). The projected public investment includes resources from the Nation’s General Budget of the territories (department and local governments) and the private sector. Another particularity is that the document also includes the Pluriannual Investment plan for Peace, with a list of projects that contribute to peace reestablishment to be executed in specific territories. The general project list is divided by regions and type of projects (structured, understructure, and regional) and separated by each of the PND agreements (strategic pillars). No individual investment amounts are shown per project or source of financing.
The Unified Investment and Public Finance System (SUIFP) is an information system that integrates the processes associated with each one of the phases of the public investment cycle, accompanying the investment projects from their formulation to their delivery, articulating them with the government programs and public policies. This system includes the National Investment Program and Project Bank (BPIN). The BPIN forms an integral part of the public investment and keeps a direct relation with issues of formulation, programming, execution, and follow-up of the investment budget.
The SUIFP also has modules dedicated to budget programming, budget execution, and follow-up of public investment projects. This platform shares information with the Financial Information System, which records all budget execution transactions. It also shares information with the Public Purchase System and Project Banks of territorial authorities in order to have a project bank that can supply information of different government levels (departmental and local) and sources of financing. Access to the SUIFP, including the BPIN, is restricted to public officers with authorization of the DNP.
Citizens interested in knowing particular information about investment projects can consult the investment map. This platform is publicly accessible and shows the georeferenced location of the projects and their profile, with general content such as its goal, the responsible entity, total programmed amount, and physical-financial progress.
The DFIP offers training and technical assistance to public officers. It makes certified courses available on project theory, public investment budget management, and the investment project bank and viability. These courses are virtual courses that last 4 weeks. Additionally, virtual talks are offered on the use of the general methodology and the SUIFP. The details of the training offer and registration procedures can be found on the DNP’s website.
The cycle of the investment projects in Colombia starts in the formulation and assessment phase of the project. For the preparation of the project profiles, the DNP makes the web tool “General Adjustment Methodology” available for the public entities and territorial governments. With this methodological tool, the diagnosis of the problem, the analysis and comparison of solution alternatives, and the assessment of the identified alternatives can be standardized. Once the project profile has the information required by the methodology, it is registered in the Project Bank to obtain the technical viability opinion and alignment with the national planning goals by the DNP and the Technical Assessment Directorates of the sector. In accordance with the project type and dimensions, the Sectoral Directorates and/or the Investment and Public Finance Directorate can request an analysis of disaster risks and the effects of climate change and their relevant strategy for their mitigation. Some projects may also require an environmental impact analysis before they can be declared viable.
Once the projects have been declared viable, they are selected and prioritized by the public entities to be included in the PGN in accordance with the budget limits determined by the Ministry of Finance. Projects from territorial governments are selected and prioritized by their relevant Collegiate Administration and Decision Bodies (municipal, departmental and regional) who present their projects for financing to the General Royalties System. The effective standard indicates that all the investment projects that seek resources from the PGN or Royalties budget must be formulated according to the general methodology guidelines, be registered in the SUIFP, and be supported by the competent authorities to be included in the corresponding budget and receive resources from it.
During the execution stage, the public entities register and report the physical-financial progress in the Project Bank managed by the DNP and the Financial Information System of the Ministry of Finance. Based on this information, investment budget execution progress reports are prepared and uploaded onto publicly accessible information platforms, such as Mapa Inversiones (Investment Map). On this platform, citizens can obtain the most relevant information of the projects related to their geographical location, programmed and executed investment amounts, and expected product indicators. When the execution phase is over, the DNP can select investment projects to include in the annual investment program and perform the ex-post assessments deemed pertinent.
The Public Investment Policy provides that, since part of the PND is prepared at the beginning of each presidential period, a pluriannual investment plan must be included. The 2018-2022 Pluriannual Investment Plan joins the priority investment plans to achieve the “Agreements” (strategic pillars) of the PND. The plan includes projects that are already structured or in the execution stage and indicative projects and other regional projects that were identified by participation in working sessions held in several regions of the country, with the presence of citizens and territorial authorities. In these sessions, the various stakeholders have the opportunity to contribute to identifying priority actions and projects in their territories.
Based on the general projections of the Medium-Term Tax Framework and the available resources, the Ministry of Finance annually determines the budget limits for public investment with PGN resources and bi-annually the public investment resources for the territorial governments from the Royalties budget. Based on these budget limits, the public entities select their projects registered in the Project Bank and declared viable by the DNP, who verifies alignment and contribution of the selected projects to the Annual Operative Investment (POAI). The main function of the POAI is to be the link between the PND and the budget system. Then the POAIs are sent to the National Council for Economic and Social Policies (CONPES) for discussion and approval. Once the CONPES has approved the POAI, it is included in the Budget Bill for analysis and approval by the Congress of the Republic.
During the budget execution stage, the public entities report on their project portfolio's physical and financial progress through the Financial Information System of the SUIFP. Based on this information, the Ministry of Finance prepares the budget execution. The DNP prepares the Result Balance of the PND, which is sent to the CONPES and is published on its website for public consultation. This balance includes the assessment of the public investment projects executed during the year and their contribution to the PND. For this purpose, the tool for Colombian Investment Budget Assessment (EPICO) is used.
Latest update: July 1, 2021