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Nature of public programs and projects

Nature of public programs and projects

The similarity between public projects and programs is that they have the object of change. However, they differ in size, territorial scope, the significance of the problem being solved, and partly in the arrangements for organizing implementation.

Unlike the program, each project ends with more concrete results and a tangible product. Public sector projects and programs are funded by state budgets, financial instruments of the European Union, and other international organizations and financial institutions. The quality and effectiveness of public projects and programs developed and administered by public administration affect public well-being.

Typical strategic goals of a public program

Typical strategic goals of a public program for the development of national infrastructure are:

  • accelerating economic growth and creating the preconditions for sustainable development;
  • restructuring of the national economy in market conditions;
  • integrating the country into the transnational space and creating conditions for an equal partnership;
  • accelerating the processes of convergence of the level of development of individual regions in the country;
  • balanced allocation and concentration of public financial resources.

To identify priority projects for the development of the national economic infrastructure, it is necessary to draw up a system of rules and criteria. It focuses on the contribution of projects to accelerate the economic growth of the economy, to develop integration relations, to solve social problems related to employment, and to protect the environment.

Investment in public sector infrastructure projects

Public sector infrastructure projects are investment projects aimed at changing the quantitative and qualitative parameters of infrastructure. They are defined as activities to achieve specific results in the relevant infrastructure sector. Projects have specific goals, defined resources, and duration to complete the tasks and a certain level of quality. The effects of implementing infrastructure projects are mainly social and economic. They bring benefits to all actors in the public arena and are aimed at effectively meeting public needs.

Investment in infrastructure is undoubtedly one of the prerequisites for sustainable economic growth. Increasing the level of infrastructure construction provides macroeconomic benefits for the national economy. The development and implementation of infrastructure projects bring many economic benefits:

  • increasing the investment activity of national and foreign capitals;
  • ensuring industrial growth and reducing regional disparities;
  • Increasing productivity and reducing costs for consumers and producers;
  • effective profits and increasing the competitiveness of the national economy;
  • stimulation of technological transfer;
  • development of the local capital market and the introduction of modern financial instruments;
  • providing strategic management and government control over the infrastructure.

Project types

Different types of infrastructure projects have been validated in theory and practice.

Typologizing of public sector infrastructure projects can be done based on a set of principles - focus, guiding functions, and objectives, fields of application, level of management and application, the scope of objectives, number of participants, duration, and scale. Based on these principles, public sector infrastructure projects can be classified as follows.

Typology of infrastructure projects

Investment projects are activities, activities that imply the implementation of a set of actions ensuring the achievement of certain goals. Investment projects can be perceived as a system of organizational, legal, and financial accounting documents needed to carry out any action.

Investment projects are most often specified in product creation, expansion or reconstruction of an existing facility, construction of a new site, technology transfer transactions, provision of engineering services, preliminary studies, design, and other technical studies.

Major projects are defined as a stand-alone activity, an operation containing a series of works, activities or services designed by their nature to perform a unified task of a precise economic or technical nature, with clearly defined objectives. They are characterized by high value, require unconventional forms of financing, have a long duration of realization. According to EU regulations, the total cost of eligible projects for large projects exceeds € 75 million. Major projects can be international, national, regional, and mixed.

For international projects, there is cooperation between at least two countries. Usually, these are projects related to the provision of external assistance (technical assistance or financing) for the development of the area. These projects are of long duration, high cost, require joint-stock, mixed forms of financing, have a complex regulatory system.

Public-private partnership projects are a form of cooperation between public-law organizations and the private sector to improve the effectiveness of infrastructure investment. They provide public services by sharing risks, pooling private sector experience and knowledge, or providing additional sources of capital.

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Author: BVOP™ Published on: Saturday Nov 16, 2019
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