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The Mega Development Projects Money Machine in Pakistan

by Noman Ahmed, 22 February 2009

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Thinking big

Successive governments in Pakistan have been obsessed with mega development projects despite their potential to create controversies

During a briefing to the federal secretary for Housing in the first week of February on development projects in Rawalpindi, it was decided that Sheikh Rashid Expressway (now re-named as Leh Expressway) will be built. It was also agreed that the idea of an elevated expressway in Rawalpindi will be revisited due to various reasons, including its exorbitant estimated cost of Rs28 billion. It appears that despite having an elected government at the helm of affairs, not much has changed in terms of the approach to development. The preference assigned to mega development projects has neither diminished nor examined on any scale of distributive justice, benefit to masses and scientific rationale.

The powerful lobbies of rent seekers succeed in siphoning scarce budgets to mono functional development schemes that cause limited good to a select few! Advisors to the government cobble together strange arguments to justify mega projects. Irrespective of its relevance to the prevailing sectoral and contextual conditions, the announcement of a mega project is usually assumed as a government’s timely action aimed at bringing about drastic improvement in the existing situation., while absence of mega projects is flagged as a sign of neglect from the government.

A development programme is normally considered incongruent if it does not contain projects of large spendings. Motorways, canals, power plants, dams, treatment plants, highways and the like, all fall in this category. Using this approach to gain popular support, the government never stops short of announcing large-scale projects, including those that cause the most severe of controversies. Mega projects are conceived as high budget affairs. For instance, the once proposed Karachi Mass Transit Programme was estimated to cost Rs66 billion. Similarly, Lyari Expressway in Karachi cost over Rs20 billion, while the Thal Canal project has been estimated to cost Rs30.4 billion. Obviously, large capital overlays enhance the financial control of the ruling cadres who also derive the flexibility of diverting this money to other avenues of expenditure.

Besides the controlling authority, the department or project management unit acquires several prerogatives. Awarding sub-contracts of enormous sums; laying down procurement lines of articles of all kinds; awarding construction contracts; employing staff, technocrats and labourers; choosing locations and sub locations to benefit (or not to benefit) any particular community or their heads are some of the direct measures of control that evolve from a mega development scheme.

In the absence of effective monitoring mechanisms, the wrongdoings of the project management unit remain unnoticed, causing harm to the affected people without any redress. A few years ago, while evictions were taking place along the corridors of Lyari Expressway, it was found that the staff of the management extorted sizable sums of money from such house owners whose property was falling on the borderline of the stipulated corridors, because helpless house owners thought it was convenient to save their abodes by paying bribe.

For both elected governments and self-imposed regimes, high-visibility mega projects are the icons of efficient performance: physical structures that can be noticed by everyone. In the urban context, high-grade motorways, transit corridors, bridges, pylons, etc, constitute images of development. In the sub-urban and rural sectors, power plants, waterways, canal ways and highways are such image-boosting entities. Usually, infrastructural components that are largely concealed in the earth surface are not considered the right choice. This also applies to projects of medium and small scale. For instance, there are many abandoned school buildings in Pakistan that were constructed as per normal prescription, but were never used due to lack of feasibility. For simple villagers they, however, serve as a bad example of development.

Donors, especially the development finance institutions, function only when they successfully lend to high-value projects. They some time lure the target countries to launch a funded project or obtain a share of it that is not even needed. Otherwise, they keep lobbying in the government circles to push for approval of such projects that would require donor assistance. It is interesting to note that they mostly succeed in their efforts.

In 1998, Asian Development Bank (ADB), in consultation with the Karachi Water and Sewerage Board (KWSB), succeeded in thrusting upon an ill-founded project of sewerage treatment in Landhi / Korangi, Karachi. The project included a sewerage treatment plant worth $100 million. The sanctioned loan amounted to $70 million, while the Sindh government was to provide $26 million, with the remaining $4 million to be provided by the beneficiaries of the project. After a thorough review conducted by a group of public-spirited professionals, the project was found to be technically flawed and financially unviable. Through an organised effort, this group prepared an alternative plan for the project at one-tenth of its estimated cost. Thus, government high-ups were forced to cancel the loan agreement on technical grounds.

A major reason for overemphasis on mega projects is the bias of technocrats in their favour. In particular, consultants – such as architects, engineers, financial experts, etc – wholeheartedly support mega projects, since this serves them well. Firstly, the rate of consultancy and supervision increases sizably to the benefit of consultants. Secondly, it satisfies the professional ego of consultants to be associated with mega projects. Thirdly, it creates the viability of obtaining more projects of similar nature in the future. Fourthly, because the consultants are only concerned with the execution stage, they seldom care to look into worth and sustainability of such projects. This approach has resulted in many stand-alone projects that are not necessarily beneficial to the people.

Mega projects normally possess a very sizable overlay of operation and maintenance cost that is a recurring head of expenditure. As the number of projects increases, the operation and maintenance costs also increase proportionally. In some cases, such as that of roads, highways and bridges, repairs and alterations also add to the process. The government finds it difficult to raise adequate funds to carry out this task on its own, thus the condition of the projects starts deteriorating due to neglect and often-irreparable damages appear causing losses of precious funds and efforts.

It is not that mega projects are totally useless. Obviously, for balanced development of various sectors, projects of all the scales need to be initiated. In fact, the manner in which such projects are conceived, designed and executed needs to be improved for the real benefit of the society. Technically, mega projects should possess a corresponding link with the small- and medium-scale projects / realities within that sector. This will also create a sense of initiative among individuals and groups to address their developmental issues on their own.

If a sewerage treatment plant is to be built, it should be linked with disposal channels at tertiary, secondary and primary levels, so that the function of treatment is efficiently performed. Socially, the creation and development of such projects should evolve from the articulate understanding of the need of the target population. For instance, if in an urban centre, improved roads with an up-to-date fleet of buses can perform the task of urban transportation satisfactorily, the need for elevated mass transit does not arise.

In another situation, if a city is in need of an improved power supply distribution system and it is given a new cultural complex from the allocation, the developmental issues would remain. Financially, there is no harm in obtaining funding from any of the available sources; however, exaggerated costs and unrealistic estimates should not be made the basis of loan parleys. Besides, loans should not be negotiated around a pack of unwanted conditionalities from the lending agency. This deprives the initiators and implementers of the independence of decision-making, particularly that related to fixing priorities. Administratively, it must be ensured that the section of the society for whom the project is targeted participates at each and every stage of execution, as well as post-construction management of the project.

This article appeared earlier in The News on Sunday