The Planning Commission has released a report titled 'Analysis/Review of the PSDP (Public Sector Development Programme)' dated August 2011, which notes that overall over Rs 50 billion, equivalent to 21 percent of the original Federal PSDP for 2010-11, was allocated for political programs which, considering the tight fiscal space, needs to be curtailed.
The report recommends the same PSDP and project appraisal process for politically motivated projects as is done under normal procedures for other projects. This will, the analysis argues, require the Planning Commission to enunciate and implement such a policy, even at some risk but enable political proofing of projects.
The analysis/review acknowledges that projects are delayed due to changes in scope and specifications. The report notes two major critical projects that were delayed due to change in scope and specifications. These are Lyari Expressway Resettlement Project and Neelum-Jhelum Hydroelectric project. The scope of the Lyari project went from 14,811 to 24,419 affectees, and then to 30,011. The cost of the project was enhanced from Rs 2.9 billion to Rs 8.7 billion between 2003 and 2011. Similarly, some design elements of the Neelum-Jhelum project have changed, causing a huge escalation of cost, from Rs 84 billion to Rs 130 billion, and now Rs to 260 billion as per the recent estimates of the project director.
The report also says that there does not seem to be any motivation for project directors/managers to complete their projects on time and within budgets as it provides benefits (extra pay, vehicles, fuel, and other allowances) and job security to prolong the projects. And, it notes that "there seems to be a nexus between contractor, consultant, project director, and sponsoring agencies. It is in the consultant's interest for the project to be delayed so that billing can be for more hours of work and professional fees. The fourth and critical stakeholder is the contractor. It is also in his interest for the project to be delayed so that he can file more claims and get extra payments. Therefore, there are plenty of incentives for the projects to be delayed, but there are no incentives offered by the government or the donor agencies for the projects to be completed early or on time."
The report adds that a conflict of interest is also caused when consulting firms or individual consultants that help in preparation of PC-I, PC-II and tender documents are also engaged during project execution, a practice prevalent on public sector projects. The report also shows that the link between PSDP 2011-12 and Medium Term Budgetary Framework (MTBF) 2010-13 is missing. The budgeted figures in (MTBF) 2011-14 are based upon outcomes and outputs.
On the other hand, the allocations in PSDP 2011-12 are based upon schemes/programs/projects. Synchronisation of PSDP, MTDF, and MTBF 2011-14 is critical to ensure that programs and projects are conceived, planned, monitored, and implemented properly.
The report also highlights poor governance as a major impediment to the success of PSDP projects. The control of project finance, the availability of a project allowance and facilities to the project director are creating incentives for part-time and non-professional managers of the projects.
Development projects fail due to various reasons. Poor planning, unclear scope definition, ambiguous mission statement, lack of clear goals, procurement leakages and poor governance are some of the key reasons for public sector development projects failure.
Project failure is generally defined as not meeting the project budget, deadlines, and specifications. This is also called the 'triple constraint'. As opposed to this, 'project success' is defined as adhering to original scope as per the PC-I and meeting the original budget, timeline, and technical specifications.
New and innovative projects, including pilot projects, must be scalable and replicable before calling them a 'success'. Qualitative and social audits also need to be conducted to evaluate project success, especially for projects that create a broad social impact.
After studying various public sector development projects in Pakistan, it has been observed that a number of issues of project execution, capacity, procurement leakages, and governance failure have limited the successful implementation of projects. Some of the issues include unscrupulous procurement practices, poor scope definition, deficient planning, unclear goals, nonexistent governance mechanisms, and lack of utilisation of project management methodology and tools.