National Public Investment System of Honduras
Statutory Governing Body:
The Secretariat of Finance, through the General Public Investment Directorate (DGIP), in accordance with the legal frameworks in force, is the statutory governing body of the Honduras National Public Investment System (SNIPH). The DGPI, as the steering entity, prepares regulations and methodologies that rule the SNIP and is in charge of the prioritization of the project viability, physical and financial programming of investments, physical-financial monitoring and project closure.
Other institutions that participate in the SNIPH are the Government Secretariat for General Coordination through the Presidential Directorate of Strategic Planning, Budget and Public Investment (DPPEPIP), which determines whether the projects are aligned with the national strategies in force. The External Credit Committee (formed by the General Budget Directorate, the General Directorate for Public Credit and Public Investment and the Directorate for Macro Tax Policy) also participates and determines whether there is tax space and issues a technical note for the project to be registered in the investment project bank and gives the priority note for later inclusion into the Public Investment Program.
The investment projects that enter the SNIPH are formulated, assessed, selected, executed and operated by the different entities of the National Public Administration and municipalities.
The SNIPH is ruled by the Public Administration Law. This law authorizes the Secretariat of Finance as the entity responsible for programming public investment. The Organic Budget Law in Title III Chapters I, II, and III outline the SNIPH’s structure, determines the characteristics of the Pluriannual Investment Program and the Annual Public Investment Plan and mandates the processes to be fulfilled by the institutions that submit investment projects. These laws are supported by the Technical Public Investment Regulations and the Budget Execution Regulations in force in chapter IX on public investment. See the complete legal framework.
In order to standardize the formulation and assessment of investment projects, the DGIP has developed the “General Methodological Guide for the formulation and assessment of public investment programs and projects”. This methodology enables the formulation and assessment of investment projects based on the cost-efficiency and cost-benefit analyses of the alternatives for solutions to the problem to be addressed. Currently, the general methodology is being updated. As a result of this updating process, social prices are included, such as the Social Discount Rate, the Price of Labor and Currencies.
There are also two sectoral methodologies, the “Sectoral Methodological Guide for Formulation and Assessment for Farming Programs and Projects for Irrigation Systems” and the “Sectoral Methodological Guide for Formulation and Assessment for Programs and Projects on Drinking Water and Sanitization”. The “Method for Protection of Infrastructure Projects” has been developed, which considers the identification of disaster risks of investment projects and preparation of an action plan to mitigate these risks, as well as the cost-benefit calculation of the mitigation measures. See the full list of methodologies (Available only in Spanish).
The SNIPH prepares the Pluriannual Investment Program with a horizon of 4 years outlining the annual finance amounts for each particular project. Annually, the Annual Investment Plan is published, which is divided into five sections. The first two are dedicated to the conceptual, legal and regulatory framework for public investment in Honduras, the third section describes the evolution of public investment since 2013, the fourth section outlines the most relevant aspects projected for public investment in 2020, highlighting the projects of the greatest importance and the sectoral physical targets. The last section shows a management balance identifying the problems and outlining actions to take to solve these problems. The annex includes the complete list of investment projects to be executed during the year, outlining those of external funding and Public-Private Partnership (PPP).
As established by Articles 56 and 57 of the Organic Budget Law, the public investment program is formed by sectoral and interinstitutional programs and projects proposed by public-sector institutions, after their technical, environmental, legal, economic and social viability has been analyzed and assessed, and the resource assignation has been determined as per the budget limits of the execution period. Both the Pluriannual Investment Program and the Annual Investment Plan are published on the SNIPH website. Additionally, there are sectoral investment plans, one of which is the 2020-2021 investment project plan INVEST-Honduras, which contains a broad portfolio of projects for road infrastructure, production infrastructure, and social service infrastructure. These projects are co-financed with resources from the Honduras Government and international organizations.
The Investment Project Bank (BIP) is the SNIPH project management tool. It comprises modules according to the projects’ life cycle: Pre-investment module (project formulation and priority note), programming and monitoring module, closure module. According to the effective regulation all investment projects must be registered and have viability opinions and priority note to be able to receive resources from the national budget. The BIP is of restricted access and requires a username and password which are assigned to the public officers appointed by each of the institutions that execute the projects. In this project bank, the different phases of the projects’ life cycles can be monitored and these are updated according to the progress of the project. The project bank shares information with the financial administration system SIAF. Based on the information uploaded by the project executory units, the DGIP prepares publicly accessible monthly, quarterly and annual progress reports (Available only in Spanish).
The DGIP prepares a training program every six months. The calendar for the workshops and technical assistance shows the dates assigned to each institution. The training plans can be consulted on the SNIPH’s website.
Once the investment project has been structured according to the effective methodologies and regulations, they are presented to the DPPEPIP of the General Secretariat General of Government Coordination, who will issue an opinion certifying that the project or program is aligned with the government priorities in accordance with the plans in force. After that, institutions must submit the project for analysis by the Budget Incorporation Committee (formed by the DGIP, General Budget Directorate, General Directorate of Macro-Tax Policy and General Directorate of Public Credit) which will issue a technical note to determine whether there is tax space for finance with external credits or donation funds for a new project or program.
The projects that have the two previous opinions can then be registered in the Project Bank of the DGIP for their technical analysis, which verifies whether the assessments made comply with the methodologies and, if they do, the DGIP issues the Priority Note (according to the establishments of article 62 of the Organic Budget Law). With the Priority Note the project can be included in the annual budget and receive financing for its execution in accordance with the projections by the public institutions which are in charge of formulating and assessing the investment projects in against the effective regulations and methodologies.
During the execution phase the executory institutions report on the physical and financial progress of the projects through the SIAFI and SNIPH systems. Additionally, SNIPH personnel pays visits to verify the physical progress of the most relevant projects of the investment program. If there are delays, they are to be exposed during the working meetings between the SNIPH steering entity and the project executory institution to know the causes of such delays and find solutions. When the project is finished, the institution must report the information on the scope of the established targets and the physical-financial closure in the Project Bank’s Closure Module. The SNIPH’s website informs on the progress in the execution of the investment projects.
As the SNIPH’s statutory governing body, the Secretariat of Finance, through the DGIP, is responsible for issuing the regulations and guidelines as per its faculties established in the Organic Budget Law. The DGIP prepares the Pluriannual Public Investment Program and the Annual Public Investment Plan. For investment projects (with own resources, external finance and PPP) to be included, they need endorsement by the General Secretariat of Government Coordination which establishes the connection with the government priorities and must have the technical note by the Budget Incorporation Committee (formed by the General Public Investment Directorate, the General Budget Directorate, the General Macro-Tax Policy Directorate and the General Public Credit Directorate) determining whether the budget limit for the institution is sufficient to conclude the project or not.
Once these requirements have been met, the projects are registered in the integrated project bank known as SNIPH where the fulfillment of the effective methodologies and regulations is reviewed and the DGIP issues the Priority Note. Only projects with this Priority Note will be included in the Public Investment Program which is part of the Budget Bill. During the execution of the Public Investment Program, the entities record the project progress in the SIAFI and SNIPH systems, and, based on that information, the DGIP prepares the progress of the investment program monthly and quarterly. Additionally, on the SNIPH website the Priority Notes issued annually can be publicly consulted, as well as the Financial Execution Matrix of the Investment Program. The new Public Investment Plan shows a balance of the previous fiscal year and highlights the main results achieved and the improvement areas identified during the previous cycle.
Latest update: July 1, 2021