The Additional Chief Secretary of Sindh government's Planning and Development Department, Ghulam Sarwar Kherro, made the disquieting disclosure in a radio interview on Sunday that procedural delays in launching of certain development projects in the province during the outgoing fiscal year have caused a lapse of Rs 7 billion.
The Sindh government had allocated Rs 24 billion to its Annual Development Programme (ADP), out of which Rs 17.2 billion was to go to provincial ADP and Rs 6.78 billion to city/district government projects. It later gave ADP another Rs 3 billion - raising the total allocation to Rs 27 billion - but without ensuring that the money was to be put to productive use.
Consequently, funds worth Rs 7 billion have been rendered unusable since under the existing rules if ADP money is not spent within the stipulated timeframe it is unavailable for spending later. Most of the affected projects comprise development packages for cities such as Karachi and Hyderabad and one for the rural areas.
This is not the first time that important development projects have failed to take off. Sadly enough, this has happened not due to lack of funding but because the delivery system is too weak and cumbersome. The rate of project delays, in fact, is as high as 40 percent, which leads to cost overruns and wastage of already used resources.
Some of the problems that account for the dismal situation are slow release of funds, poor project management and design, and, of course, pervasive corruption. In the present instance, one of the procedural delays that caused several projects to lapse, according to the Planning and Development Department official, concerned the appointment of consultants by city/district governments.
This may well be the outcome of a power tussle that has been going on within the Sindh ruling coalition. Only last month one of the coalition partners had publicly protested against what it termed the chief minister's unwillingness to consult it regarding, among certain other things, implementation of development projects.
Project delays being a persistent problem, last March the National Economic Council (NEC) had approved a set of proposals put forward by the Planning Commission to address the issue. It had proposed a new procedure for expeditious release of project finance, recommending that funds be placed directly at the disposal of project heads.
The Auditor-General was told to avoid raising repeated objections to requests for fund release. The NEC also decided to deal with management issues through the establishment of Core Management Units for large donor-assisted projects. But as we had pointed out then, there is an urgent need to upgrade the provinces' delivery mechanisms.
If they allow such important development packages as the ones named above to simply stagnate because the city/district governments could not appoint consultants in a timely fashion, it should become more than obvious that the present delivery mechanism requires a major overhaul.
Aside from effectively implementing the Planning Commission's proposals, provincial governments must also put in place clear policy guidelines and procedural rules regarding different aspects of ADP execution.