Peru’s central government is to transfer some 800 million soles ($290 million) to regional governments to help with public works projects, state news agency Andina reported.
The fund aims to compensate regional governments that have seen their budgets shrink due to lower mining tax revenue.
“This decision by the [central] government to provide resources and, above all, to create a compensation fund, is very positive and I’m sure that many municipalities and regional governments are going to be grateful,” said Mauricio Rodriguez, the president of Puno’s regional government.
Rodriguez said the additional funds will allow his administration to continue with public work projects. “We were going to lose close to 30 million soles,” he said.
Premier Juan Jimenez said the measure is important to ensure that works are not paralyzed because of the lack of funds.
“It is important because it is going to allow public investment to continue in areas where regional and local government have contracts for works, so that these works aren’t paralyzed,” he said. Lower tax revenue from lower mineral prices is affecting the annual budgets of regions where mining comanies operate, even though many of the regions have not used their full budget.