Governor of the Central Bank Hector Valdez says that the country’s finances will not be a problem if the government decides to make this a public works priority and proceeds with the construction of a first stretch of metro line in Santo Domingo. Metro Minister Diandino Pena has said the 10-km stretch will cost US$327 million, compared to costs of EUR1 billion for shorter stretches of metro now underway in Paris and Amsterdam. Likewise Pena has said the metro will cost users RD$5-RD$10, when similar services in New York cost RD$60, RD$40 in Washington, RD$42 in Barcelona, RD$51 in Paris (at the overvalued Dominican peso rate).
In a press conference called yesterday, Valdez Albizu defended the construction of the metro. He said that the proposed project does not go against the arrangement with the IMF because the agreement sets a ceiling on public investments, but investment priorities are ultimately the government’s decision. He said that this year’s ceilings are RD$38.2 billion for public investment and US$1.1 billion in foreign debt repayments. Of the US$1.1 billion, the government is free to use US$439 million. The rest is committed for repaying the petroleum debt, and to the power sector and health sectors.
Valdez stressed that the magic word is prioritizing capital spending that may allow the government to replace one project for another according to current priorities.
Valdez was referring to statements made by the IMF representative in the country Ousmene Jacques Mandeng, who commented that “there are certain spending ceilings” that have to be managed within the arrangement.
Mandeng was quoted in the press as having said: “The Metro represents a deprioritizing of the projects that the government has budgeted for,” during a visit to the Chamber of Deputies. For the IMF rep, the metro represents a challenge to the goals proposed in the agreement, but he acknowledged early on in his statements that the government is free to set its priorities.