Thursday, 18 April, 2024
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EDITORIAL

Stop Cost, Time Overrun



OUR government spends a major portion of its annual budget on several infrastructure and development projects, which are implemented with a dedicated objective of taking the nation's development endeavours forward. Every year, a considerable amount of budget is allocated for these projects. Because of their importance to the country's well-being, some of these projects are aptly called the National Pride Projects. The significance of these projects can be inferred from the fact that once these projects are completed or become operational, they are expected to assist our country in making rapid strides towards full-fledged development.

However, when it comes to our pride projects, things do not look rosy. Most of these projects have been hit hard by mismanagement, poor preparedness, inaction, nepotism and several forms of corruption resulting in their poor performance. Reports suggest that about 85 per cent of such projects are facing cost and time overruns. Projects like Melamchi Water Supply, Upper Tamakoshi Hydropower (UTHP), Gautam Buddha International Airport, Sikta Irrigation, Postal Highway, Seti and Budhigandaki Hydropower, Bheri-Babai Diversion and many other major projects confronted several impediments, which ultimately resulted in cost and period overrun. They failed to come into operation in time and gobbled up vast resources. Many of them have entered over 30 years of implementation since their inception. For example, the Melamchi Water Supply Project, which was envisaged back in 2002, was delayed by about 16 years against its initial target of five years. The past government by KP Sharma Oli had hurriedly inaugurated the water project that has yet to fully test its urban water-supply calibre.

As these projects took many years to complete, they also devoured a considerable amount of government resources and funds obtained from foreign or domestic investors and partners. As such, these projects have turned into costly projects for the government and the investors. Despite large investments, many of these projects exhibit poor progress reports. Many have missed several deadlines, causing extra burdens on the state budget. In the meantime, the lack of cost-benefit analysis is likely to turn many of these large projects into a white elephant for the state. UTPH is a case in point - the initial cost of UTPH was Rs. 36 billion but the figure has now gone up to Rs 80 billion. To make matters worse, there are doubts about whether the power generated by the UTPH would be fully utilised.

The issues of lackadaisical performance of our pride projects can be addressed only by taking up punitive measures. Project managers and consultants of poorly performing projects must be held accountable and punished accordingly. Issues related to multiple changes in procurement plans, low bidding, less competitive consultants and unusual demands from the locals or project-affected citizens should be addressed. Since selection of managers and staff based on nepotism, favouritism, political interests can have negative consequences, ownership deficit on the part of stakeholders and contract agreement before preparatory works have negative impacts on the performance of these projects. The government must address these hiccups to help such large development projects produce desired results. The national pride projects can make the nation and the people really proud only when they bring out the targeted outcome within the stipulated deadline and budget. Otherwise, they would only add woes to the government and investors.