Pnrr doesn’t go as planned. Known delays and other issues put the National Recovery and Resilience Plan at risk: There are 120 projects that the government considers at risk of implementation, some of which may even be interrupted. Measures that can be omitted include reforms and investments in central areas of the Plan, such as infrastructure, energy and digitisation. These include funds for floods, droughts, transport, waste and renewable energy, all critical and current issues that Italy has been lagging behind for years. Let’s see which are the most important projects at risk and how many billions of euros they are worth.
Pnrr in Italy so far
Italian Pnrr provides 132 investments and 63 reforms for a total of 191.5 billion euros financed by the European Union, including 68.9 billion non-refundable grants and 122.6 billion loans to be used in the 2021-2026 period. So far, Italy has received about 67 billion euros from the European Commission, but the request for payment of the third installment of 19 billion euros remained pending: at the end of April, the government said it was “a matter of hours” to receive it. , then to move the deadlines to the end of August 2023. And given the delays, we are already looking anxiously at the deadlines to receive the fourth tranche of payment of 16 billion to meet targets to be reached by June.
It is clear that the implementation of the National Recovery and Resilience Plan has been delayed: a little over a billion was spent in the first five months of 2023, as the semi-annual report by the Court of Accounts and the government to Parliament indicates. total expenditure is 25.7 billion euros, meaning only 13.8 of all funds will be spent by 2026. Therefore, the Meloni government started consultations with the European Commission to amend Pnrr and implement some measures or even go further. cancel them.
Reasons for delays, according to the Meloni government
The third semi-annual report to Parliament on Pnrr – the first by the Meloni government – acknowledges all the problems hindering the implementation of the Plan. The government describes these as “objective facts and circumstances”: these include rising costs, shortages of raw materials, imbalances between supply and demand, and unpreparedness of the production system. In addition, there are challenges stemming from regulatory, administrative or administrative complexities, and even “simple needs to redefine commitments at the technical level.”
By European standards, such objective circumstances may affect the achievement of some of the objectives necessary to obtain Pnrr’s funds and therefore it is possible to receive scrutiny. The European Commission considered the unpredictable rise in energy and raw material prices in the construction sector of the Russian occupation of Ukraine as an “objective case” to demand the Plan’s change. Now, the Meloni government has identified the riskiest measures.
120 projects at risk of pnrr: what are they?
According to the government report on Pnrr, there are 120 projects that are at risk due to one or more “causes of weakness”. The measures with the largest number of vulnerabilities account for 10 percent of the total and are worth 17 billion euros, according to data processed by Today.it. Of the 9 projects with at least 3 critical elements, 6 are related to the Ministry of Environment and Energy Security. These include 1 billion euros in “Sewage and treatment” investments and 1.2 billion euros in hydrogeological risk investments, which are at risk for 4 identified vulnerabilities.
In general, these measures relate to key parts of the National Plan for Recovery and Resilience, such as energy and the digital transition. According to the relevant European regulation, in fact, each State should allocate at least 37 percent of the funds to support environmental and climate targets and at least 20 percent to advance the digital transition.
Other measures reported include the delays of the high-speed train between Brescia, Verona, Vicenza and Padua, the 3.7 billion euro project, and Northern Europe, as well as investments in “Primary water infrastructures for water supply security”. More than 2 billion euros due to drought. Investments in the “Electric charging infrastructure” (740 million euros) and “Hydrogen refueling” stations, which the government wanted to reduce from the originally planned 40 to 35, are also among the riskiest projects.
According to data processed by Today.it, 43 projects worth 60.4 billion euros instead are among the measures that present the two elements of weakness. These include another 2 billion euros for “Flood risk management and hydrogeological risk mitigation”; this is impressive given the proximity over time to the floods in Emilia-Romagna. In terms of the importance of the investment in question, around 14 billion euros stands out for Ecobonus and Sismabonus to strengthen up to 100 percent for energy efficiency and building safety, to which is added 4.6 billion euros for 260,000 new places. 5.8 billion for kindergartens and 5G network. Projects to improve rapid transport in the south – 3.6 billion for trams, metro and buses -, waste, energy communities and rail networks are also delayed or at risk.
So what will happen to these projects? If critical elements are to be defined as “impassable”, the measures will be divided into two categories:
- Strategic interventions in the national interest, where the state will provide “enhanced support for the implementation of the measure with the possible revision of the final targets in relation to the increase in costs”;
- If timely action is not taken by the implementing bodies to address the critical issues identified, interventions will be recommended, in agreement with the services, to reprogram the relevant resources for more efficient uses, consistent with the aims and principles of the PNRR Commission”.
It is not yet clear which projects will be shelved, but it is certain that most of these interventions will not be implemented in a timely manner. Given their importance for the country’s growth, the government will need to find a quick solution to implement them as soon as possible, but it will also be persuasive for the European Commission.
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Source: Today IT
Roy Brown is a renowned economist and author at The Nation View. He has a deep understanding of the global economy and its intricacies. He writes about a wide range of economic topics, including monetary policy, fiscal policy, international trade, and labor markets.
