The Presidential Election was focused on, among much else, more efficiency in the public sector and implementation of projects so that they do not result in costly overruns. The new administration now has the challenge of ensuring that protects are carried out efficiently as well as transparently, which is an aspect that successive governments have struggled with for decades. Early indications are they have their work cut out not just to ensure that the projects run according to schedule but that necessary reforms are also done to improve transparency and accountability.
A new report by the Finance Ministry indicates that the Government has 385 mega projects valued at over Rs. 4,627 billion in various stages of execution. It was reported over the weekend that despite the towering number of projects, implementation remains habitually weak.
The 31 Asian Development Bank (ADB) financed projects have a technical evaluation committee (TEC) value of around Rs. 800 billion. In contrast, China is providing Rs. 895 billion worth of funding for 24 initiatives. Interestingly, a lion’s share of all these projects is handled by just 11 ministries. They account for 304 of the 385 initiatives, valued at a total of over Rs. 574 billion.
But fund utilisation, when measured against targets (as at 30 June), is only 69%, the report states. And when compared with the target of 51% set for the second quarter of this year, it drops even further to an abysmal 39%.
Forty percent, or 153 projects, are being implemented ‘without issues’, while 139 of them are ‘slightly behind the schedule due to minor issues’ but still showing satisfactory progress. Thirty-two projects, however, are behind schedule and 56 are still in the preliminary stage. One has been halted.
Many of these initiatives face implementation issues including inadequate allocation and imprest (advances), scope change, TEC revision, procurement delays and delays in land acquisitions, and payment of compensation. The poor performance of contractors has also caused lags in project completion. There was no preparedness in selection of key project staff or drawing up of detailed designs and site selection. There is a lack of project management capacity. Employees, particularly project directors, whose performance was poor were often retained and even selected for future programs without assessment. It is clear that the Government has to focus on building competencies on project management, which should ideally include performance-based incentives and punishments. In fact this was included in the recommendations of the Finance Ministry report. Procurement has also been a long-term problem in Sri Lanka with upgrading guidelines and ensuring more transparency and accountability still remains unimplemented.
Other long-term challenges have been land acquisition, valuation, compensation and providing utilities such as electricity and water. It is imperative that line ministries coordinate on projects better as that is a key component to reducing costs, meeting targets and ensuring sustainability of projects. Given that there are only 11 ministries that handle a whopping Rs. 574 billion worth of projects, oversight can be focused on them before being expanded to cover other entities as necessary. Focusing on key projects will not only improve efficiency it may also bring economic benefits from the projects faster and boost growth.