Project Implementation: PM moves to contain cost, time overruns

A planning commission meeting chaired by Prime Minister Sheikh Hasina yesterday after eight years took three vital decisions to ensure timely completion of projects and avoid cost overruns.

The decisions include forming a high-powered committee under the principal secretary to evaluate the foreign-funded projects, formation of a pool of project directors and a new system to select fresh projects.

At the meeting, Hasina called for ways in which the ongoing projects can be wrapped up fast and with little cost overruns to reap maximum economic benefits from them.

The development comes as planning commission data showed development projects in health and education sectors saw a staggering 13 percent and 27.5 percent cost overruns respectively in the last five years.

As much as 55 percent of the health ministry projects and 34 percent of the education ministry projects saw deadline extensions during the period.

On average, four project directors worked in the education sector projects and three in the health sector projects.

The scenario is the same in the case of projects under the other ministries and divisions, said a planning commission official. “Projects in Bangladesh are rarely completed on time and within the original budget,” he said.

At the meeting, the planning ministry placed several recommendations and the PM gave a total of 14 directives.

The directives include special attention to bringing down inflation, fast release of foreign loans, a guideline for the panel of project directors and training for project directors.

At the meeting, the planning ministry officials pointed out several challenges including taking up projects without feasibility studies, delays in land acquisition for infrastructure projects, shortage of skilled manpower for project implementation, absence of full-time project directors and lack of adequate skills on public procurement.

The meeting — which was attended by Finance Minister Abul Hassan Mahmood Ali, planning commission members and top government officials of different ministries — called for placing greater emphasis on feasibility studies as the quality of implementation of the projects depends on it.

“If the feasibility study is not done properly, it causes project delays and cost increases,” Planning Minister Abdus Salam told reporters after the meeting held at the NEC auditorium of the Planning Commission.

A committee under the principal secretary to the prime minister will be formed and it will sit every two months to evaluate the foreign-funded projects, said Satyajit Karmaker, senior secretary of the Planning Commission, after the meeting.

In fiscal 2022-23, the utilisation of foreign loans and grants stood at 72.4 percent.

GDP growth increases if the foreign loans are utilised properly, show the working paper of the meeting. In fiscal 2017-18, foreign loan utilisation was 91.8 percent and in the next fiscal year, Bangladesh recorded GDP growth of 7.8 percent.

Proper utilisation of foreign loans and grants plays a helpful role in sustainable growth and maintaining a healthy balance of payment.

A pool comprising experienced and skilled project managers is “essential to avoiding delays in project implementation, cost overruns and efficient implementation of development projects”, the working paper said.

In the existing system, there is a rule that there should be a full-time project manager for projects above Tk 50 crore and the same officials should not be the project manager for more than one project.

But this is not followed properly, said a planning commission official.

“If any project director lacks skill, it causes time extensions for the projects. So a pool of project directors from specialists of ministry officials will be created,” Salam said.

He also said a committee will be set up comprising all planning commission members to select the new development projects. Now, the programming division of the planning commission selects the projects.

When the matter was presented before the meeting, the PM asked whether such a new system would delay the projects further. When the officials reassured her that it would not create delays, Hasina gave the go-ahead, according to meeting attendants.

Meanwhile, when asked if the government can pay back the foreign loans due to the dollar crisis, Salam said: “The was not discussed in the meeting. Ask realistic questions. Talk about the reality.”

“We will not sit idle if any foreign donor tries to close the projects. We have an elected government in place. Are foreigners providing loans without any benefits? They are getting back their loan with interest,” he added.