In a double-edged initiative that can cut either way, release of funds for foreign-funded development schemes in three key sectors of Sindh, ie education, agriculture and irrigation, has been stopped, apparently to monitor implementation status of the ongoing projects and the expenditure reports.
While suspension of project implementation can in a way help the monitors to make a correct assessment of status of each project, it can also cause further delays at a time when the coming elections are likely to hold up development activities till the formation of the next government.
Knowledgeable sources are of the view that as a result of the government move expenditure earmarked for development schemes this year is likely to remain largely unspent, as election activities will involve all concerned till January 8, 2008. According to the laid-down procedural parameters, foreign-funded projects are provided matching grants by the government on quarterly basis, and the release of local component is subject to submission of the expenditure statement along with the report on the implementation status.
Sources told Business Recorder that random checking of "progress reports" had revealed that work in many areas was either not carried out, or expenditure statements were prepared "in anticipation of" the completion of the projects so as to obtain timely release of funds. Incidentally, all three sectors in which development work has been suspended are of crucial importance. For instance, the province's irrigation sector needs upgradation through canal lining and use of other water conservation techniques.
Similarly, the agriculture sector was to be given funds for improvement in crop variety, adoption of crop improvement system and construction of farm-to-market roads. Foreign-funded projects in education were focused on developing new educational facilities in rural Sindh where female literacy is a matter of particular donor concern. This involves teachers' training, school rehabilitation and supply of equipment.
Suspending work on uplift schemes in the province, for whatever reason, is unjustified, as it can prove counter-productive both in the short and long run. Further, preparing reports "in anticipation of" completion of projects to forestall chances of delay in release of funds amounts to counting your chicks before they are hatched. Viewed at the national level, resort to such "approximations" to ensure timely release of funds bespeaks of the degree of ad-hocism that has come to characterize project execution in the country.
Why not conduct monitoring and project execution simultaneously to ward off further delays? However, it is indeed a good initiative on the government's part to start monitoring the implementation status of projects and the statements of expenditure incurred on them to match the two in the larger interest of ensuring expeditious and economical execution of schemes. In fact, as an ADB report once put it, Pakistan lacks effective implementation capacity, which needs to be augmented.
Significant start-up delays of development projects have adversely impacted not only the achievement of project goals; these have also contributed to hefty cost overruns. In addition, delays have often resulted in poor quality of development work. Projects have sustained start-up delays, in some cases running into years, primarily due to delayed loan effectiveness, and the late setting up of project management units.
Such delays have adversely impacted project implementation schedules, which has often resulted in extension requests of the loan closing deadlines. This is true particularly of our mega water and power sector projects. Further, frequent transfers of project directors, lack or shortage of qualified technical staff, a poor accountability mechanism and complex decision-making process are the other factors that have stymied project implementation in the country.
In fact, delays take place at all stages, ie from project concept approval to loan effectiveness and contract awards. Donors have often suggested measures to cut down the processing time and the streamlining of institutional bottlenecks, and recommended increased all-round capacity building.
They have also recommended post-approval procedures, and reducing start-up delays for all types of development projects. Investment in terms of systemic and sustainable capacity development of officials and their training are essential to bring about a fundamental change in the prevailing situation.
The inherent systemic problems cannot be addressed through capacity building in a single agency. It should instead be an all-inclusive, integrated process of improvement and accountability. As we have argued in this space earlier, tuning up the implementation arm of the government alone can remove systemic hiccups that result in delayed or sub-standard execution of projects in the country. Such measures as suspension of funds etc should be avoided, as these will only further complicate matters.