Projects delays and reforms

2015-12-31T22:58:49+05:00 Mian Fazal Ahmad

Pakistan’s annual budget has been needing sizeable foreign assistance each year to balance it annually. This practice has been going on for many years which is a highly undesirable situation for a debt ridden nation. It needs fast track corrective measures. On the other hand, it is estimated that out of an average annual Public Sector Development Program (PSDP) of around seven hundred billion rupees, twenty to thirty percent is lost due to delays and consequent costs overruns for lack of reforms in implementation of projects. Some recent glaring examples are those of Nandipur Power Project and that of Neelum Jhelum Hydro Power Project. Likewise many other Projects may have undergone costs escalations but not widely reported. Let us hope that CPEC does not suffer due to Projects delays.

Major reasons for Projects delays are the following;

a) Project owners, usually public sector organizations themselves become Project Consultants also and do not have sufficient skills and know how of project control, monitoring and supervision requirements.

b) Existence of ambiguities and loopholes in contract documents which are exploited by contractors to their advantage causing delays.

c) Absence of proper bankable performance bonds between the project owners and the contractors lead to undue delays.

In this connection, standard documents and procedures prescribed by International Agencies and even of national bodies like Pakistan Engineering Council are not followed. Often competitive bidding in a transparent way is not done which often results in high costs of contracts at the beginning and competent contractors are not appointed.

The prevailing “babu culture” leaves the project planning and management usually to non-technical clerks thus throwing the fate of projects into incompetent hands.

Internationally, there is a proven practice for accomplishing development projects without delays and through a triangle of development – project owners, consultants and contractors. The project owner – usually a public sector agency is the project initiator and overall watch dog of the project. Consultants plan, design and select competent contractors and supervise so that the tasks are well planned, designed and accomplished without delays and costs overruns. Standard regulating procedures for all the related activities are followed by all the members of the triangle. In this connection, International agencies like the World Bank, Asian Development Bank and FIDIC have prescribed procedural framework for guidance to regulate the roles of a project owner, consultant and the contractor. In fact, the project owners need to confine only to top level control and monitoring thus cutting their unnecessary costs.

The Federal and Provincial Governments need to introduce effective reforms by prescribing new procedural guidelines for handling all projects in the public sector according to international practices and contract documents prescribed by Pakistan Engineering Council and PPRA. It is highly imperative that head of a Project sponsoring agency in the public sector must be professionally experienced to handle projects and their successful accomplishment. Incompetent project leaders cannot ensure timely and flawless accomplishment. Further in case of costs escalations due to delays, the head of the project owning agency should be made personally accountable and punishable. These guidelines should apply to all foreign funded and Public Sector Development Programs. This alone can help save undue wastage of public funds of a nation loaded with huge debt. Pakistan’s economy would thus go on a path to revival.

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