Tuesday, 19 October, 2021

Country needs overhaul in infrastructure development system


Infrastructure development is a cross-cutting issue for both social and economic development of any country, but in terms of Nepal it has become a contentious topic as the critical infrastructure construction is not completed in time. Almost every project has undergone time and cost overrun with Melamchi Water Supply Project, Sikta and Babai irrigation projects being some identical examples. Although the entire system of development construction has flaws from project preparedness, financing, bidding and supervision, contractors are bearing the heat alone. The government efforts for the effective capital expenditure have become yet impossible and people have troubles due to poor or no infrastructure. In this backdrop, Infrastructure Expert Prof. Dr. Surya Raj Acharya, President of the Federation of Contractors Association of Nepal Rabi Singh and Spokesperson of the Ministry of Physical Infrastructure and Transport Rajeshwor Gyawali interacted with journalists at the Gorkhapatra Sambad, a weekly dialogue programme. Excerpts: 

Infra development is ad ho: Acharya
There are three dimensions of the current challenges in the infrastructure development in Nepal. The first is the role of the construction industry.
The government and the industry must be clear about the role of the construction business in national development, strategy for procuring construction service and work to create short-term and long-term strategy for the sector.
The country should have devised a strategy to make it self-reliant in construction services. It has not been reflected in any plans, policies and strategies. I am not talking about any company, but the entire construction industry.
Second dimension is system for the infrastructure development which includes rationale, requirement, preparedness, process and execution. The infrastructure construction process is running in an ad hoc basis so far. Until and unless we have proper system for the identification of the development project, master plan to create it, environment clearance and land acquisition system, there won't be much progress.
The third aspect is the governance. Panchayat cadres were paid from the commissions from the contractors of the large infrastructure project. The culture is still in practice. Large infrastructure projects have become the means of corruption.
Another factor of the problem is poor project management. It is good that the Prime Minister has shown an utmost interest in the pride projects, but the linear direction model doesn't work. We don't try to find out the reasons in project delay but are ready to give our reactions on it.
Corruption is rampant in large infrastructure projects in other countries as well, but the leaders and project managers there are tied with relevant legal bonds. Although there is a problem in workmanship of the construction companies, private sector has the right to lobbying and the government must listen to their demands. The first job of the government is to find out the weak point in the entire process and fix it.
The entire system for public infrastructure construction is out of order and needs to be overhauled. There are lapses in designing projects. Consultants are not visible, and the industry is a disaster. It's no one's mistake in Sikta Irrigation Project, but the consultants’. Technical capacity of consultants and contractors as well as government bureaucracy is questionable. Project designs should be reviewed by more skilled engineers and consultants.
In many countries, the chief of the road department is a manger or a lawyer, not an engineer. But we did not review our system. Our director generals are not technically sound or updated about the recent innovations in the construction sector. The system should not only discipline the bureaucracy and contractors but should also protect them. The project manager should have confidence to facilitate the contractors in any way in each time period. The state should also create institutions to absorb the skilled human resources.
Policy, human resource and institutional capacity of both the government and private sector are weak. The government construction company is created without proper study. It was a huge policy departure, but it is executed without any preparation.
The present mechanism cannot create the required infrastructure. It has been largely failed to do so. Therefore, discussions should be initiated to create a long-term policy and system for development.
At the same time, we must not forget that the infrastructure projects have environmental, political, business and other aspects as well. Stability of human resources, especially responsible authorities would help lubricate the project.
Business model of construction industry should be changed. They should have their own laboratory. The government should not run its construction company.
What is the basis to establish it? What is the rationale? What are the SWOTs? Nobody has the answers. Providing capital to the contractors without interest can deliver better results. It is also necessary to enable the contractors with other required facilities.

Contractors’ reputation is at stake: Singh

The biggest problem of the construction industry is no workout on the project before it is tendered out. There is no proper Detailed Project Report (DPR) and study of environment and social aspects, and budget allocation. The amendments to the Public Procurement Bylaws have addressed some of the problems but many are still to be resolved.
The contractors have become the face of the projects and their reputation is being smeared on. We have long been taken as the main culprit of the project delay and poor quality, nobody blames the consultants and the government. Tarnishing the image of the contractor is not the solution. People are facing problems so their protest against the government and contractors can be justified but the construction entrepreneurs are discouraged by such activities. They should be motivated and inspired while the situation is just opposite. Matter of worry is that the government has exhibited indifference to our concerns in terms of public construction works.
The government has failed to take its employees into confidence, they are scared of the Commission for the Investigation of the Abuse of Authority that they would be sent behind bars in case of any mistake. When the government opens bid, we participate in it thinking that the government might have done enough homework in terms of project preparedness.
However, the situation is found contrary to this in many cases. The Chabhil road was blacktopped just to make some impact in elections as the leaders forced the contractors to complete it on the eve of the last election. Since the sewerage system is too small, the road was damaged in the rains the next season.
There has been a practice to create multiple segments of a project to create space for corruption. Khadichaur-Charikot road is just an example. The ministry officials did not adhere to the direction of the Prime Minister. The PM directed the officials to extend the deadline for once, but they denied it with us.
We never hoped that such unfortunate situation would arise. More than 2,000 ongoing projects are stuck now. Billions of rupees of the contractors is yet to be disbursed by the government.
The FCAN had asked the government to scrap the contract of Khadichaur-Dolakha road. Why should people be troubled due to the mistake of any contractor. On the other hand, secretaries are afraid of signing the project variation. Why did the government amend the width of road after five years, and why not earlier? And why should the contractor bear the consequences? Common people do not know the inside information which results in holding the contractors responsible.
The government officers who shy away from signing in the contract or variation document should not have right to stick to the post.
If the document is wrong, he/she should punish the responsible officers or entrepreneurs, including the consultants.
We have given constructive suggestions to the government in amending the public procurement bylaws. Request to bring down the ceiling to bid projects 5-times of contractors' capacity from 7-times is an example.
We create project as per our budget not as per the requirement as it would benefit all the stakeholders individually, not the people. If all the works at a site such as water supply, sewerage, electricity and telephone poles are given to a single contractor, it would address many issues in project delay and low-quality construction.
Many foreign contractors come here to make low bidding with an aim of raising the additional money from multiple claims afterwards. There is a practice of refunding the remaining money of the project through other channels.
If the government had not fallen into the trap of saving money, the Melamchi Project would have been completed by now. But no Nepali contractors are allowed to make the claims, they would be sent behind the bars in that case.
The quality of the road and other projects depends on the size of the budget allocated to the project. We have failed to set the infrastructure priority. Consumer Committees are responsible for the rural infrastructure. All the political parties stand together in cheating the people through the consumer committees. The problem is more rampant in the Terai.
Absence of good supervisors and monitoring agencies has also resulted in poor infrastructure development.
The government that had failed to monitor the project can develop infrastructure through its own company, I doubt it. Mediating constructing company cannot build infrastructure, they live on the commissions of the project budget.

DPR of project is consultant dependent: Gyawali

The issue of infrastructure development should be looked at from two perspectives -government and contractors. So far as the capacity of the government is considered in project preparedness, the DPR is consultant dependent. The government does not have the capacity to prepare it itself. However, I agree that projects are contracted out without proper preparations.
It is also true that some powerful leaders have taken some large projects to their election constituency. But the contractors have also accepted more projects than their actual capacity and they lack technical expertise. But there are some project managers who are proactive and dedicated their efforts to resolve the issues at the site.
The contractors have been exercising their free will in infrastructure development, but the government has tried to tame them through new policy provisions. The government can't just bow down to some business interests, it has to consider the larger public interest. The role of the government is to facilitate the private sector.
The government had directed the contractors to blacktop the Chabhil-Jorpati road as it is since the dusty road crated health hazards to the local people in that area.
Political leaders should have clear vision about infrastructure development. So far as the carrots and sticks are considered, there is no such provision for both the bureaucracy and the contractors. Integrated tendering of sewerage, water supply and road construction can be a solution, but we should change the current legal regime to implement it.
Low capital expenditure is a challenge to infrastructure development. The first four-months are mostly spent in preparing tender document and other policy activities. We have to look at the yearly scenario to gauge the situation. I am hopeful that the situation will be better from this year.
The government has conceived the idea of construction company to execute the large-scale projects that are beyond the capacity of domestic construction entrepreneurs.
It can make some major break-through in terms of infrastructure development and can facilitate the private sector with required technology and know-how.
The company is just registered and will take another 6-8 months to come into operation.
Quality of infrastructure has been a recurrent issue. You can feel the difference in the quality of roads in across the Nepal-India border. We don't have the quality infrastructure without enhancing the capacity of the contractors.