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 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 on education sector projects and three on health sector projects.
The scenario is the same in the case of projects under 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 in public procurement.
The meeting, attended by Finance Minister Abul Hassan Mahmood Ali, planning commission members, and top government officials from different ministries, called for placing greater emphasis on feasibility studies as the quality of project implementation 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 will be formed under the principal secretary to the prime minister, which will meet 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 utilization of foreign loans and grants stood at 72.4 percent.
GDP growth increases if foreign loans are utilized properly, as shown in the working paper of the meeting. In fiscal 2017-18, foreign loan utilization was 91.8 percent, and in the next fiscal year, Bangladesh recorded GDP growth of 7.8 percent.
Proper utilization of foreign loans and grants plays a helpful role in sustainable growth and maintaining a healthy balance of payments.
A pool comprising experienced and skilled project managers is essential in 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 new development projects. Currently, 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 attendees.
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 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.
The decisions made at the planning commission meeting chaired by PM Sheikh Hasina aim to address the recurring issues of cost overruns and delays in project implementation. With a focus on evaluating foreign-funded projects, creating a pool of skilled project directors, and implementing a new system for selecting projects, the government aims to ensure timely completion and maximize the economic benefits of ongoing projects.
Data from the planning commission highlights significant cost overruns in the health and education sectors over the past five years, with a high percentage of projects experiencing deadline extensions. The situation is similar across various ministries and divisions, indicating a broader challenge in completing projects within the allocated budget and timeframe.
To tackle these issues, the planning ministry presented recommendations, and the PM provided 14 directives during the meeting. These include efforts to reduce inflation, expedite the release of foreign loans, establish guidelines for project directors, and offer training to enhance project implementation skills.
Feasibility studies were emphasized as a crucial element in project quality, as inadequate studies can lead to delays and increased costs. A committee under the principal secretary to the prime minister will be formed to evaluate foreign-funded projects regularly, ensuring effective utilization of loans and grants. Foreign loan utilization has shown a positive impact on GDP growth, contributing to sustainable development and maintaining a healthy balance of payments.
Creating a pool of experienced project managers is deemed essential to prevent delays, cost overruns, and ensure efficient implementation of development projects. The current system’s requirement of a full-time project manager for projects above Tk 50 crore will be reinforced, while the same officials will not manage multiple projects simultaneously. This approach aims to address skill gaps among project directors, with specialists from ministry officials being included in the new pool.
The selection of new development projects will undergo significant changes as a committee consisting of all planning commission members will be responsible for the process. This move intends to improve the selection criteria and avoid potential delays. Prime Minister Sheikh Hasina expressed concerns over potential project delays resulting from the new system, but upon reassurance from officials, she gave her approval.
The meeting did not explicitly discuss the government’s ability to repay foreign loans amid the dollar crisis. Planning Minister Abdus Salam redirected the focus toward the benefits of loan repayment, emphasizing that the government will not idly accept project closures by foreign donors. He highlighted the interest payments made by Bangladesh and asserted that the country’s elected government will take necessary actions to protect its interests.
The decisions made during the planning commission meeting indicate a proactive approach by the government to address recurring issues in project implementation. By prioritizing feasibility studies, forming evaluation committees, and creating a pool of skilled project directors, Bangladesh aims to enhance project efficiency and overcome cost overruns and delays.
