Costs of Poor Planning By Naseer Memon

Costs of Poor Planning

 

By Naseer Memon

Daily Dawn-22nd Sept 2011

Link: http://www.dawn.com/2011/09/22/costs-of-poor-planning.html

THE Planning Commission issued a startling analytical review of the public-sector development portfolio some time ago. The document is a testament to the systematic institutional decay witnessed in the planning of public-sector development.

The country’s annual budget is normally defined by the ‘three Ds’: defence, debt servicing and development. Ideally, there needs to be a balance between these expenditures but in Pakistan, the first two are sacred while the third is routinely compromised on account of a paucity of funds. During the 2010-11 period, the Public Sector Development Programme (PSDP) was fixed at Rs280bn. Subsequently, the foreseen revenue shortfall curtailed it by Rs100bn.

The report acknowledges the burgeoning PSDP development deficit and reveals that the current throw-forward has reached the staggering sum of Rs3.1tr with over 1,800 crawling projects. Logically, it would require Rs600bn a year over the next five years if even an elusive moratorium on new projects is applied. If the current size of the federal PSDP is taken as a benchmark, the time lag would be 15 years — not accounting for project delays and increased costs.

PSDP projects are normally comprised of four mains sectors: infrastructure (energy, railroads, ports, roads, etc), social development (education, health, water, etc), balanced development (special programmes for less developed areas) and production (agriculture, industry and minerals, etc). The current throw-forward pertains predominantly to projects concerning infrastructure: some 409 projects are buried under a crippling future estimate of Rs2.4tr against the paltry allocation of Rs135bn under the previous PSDP. This is followed by the social sector with 1,227 projects costing Rs850bn having a throw-forward of Rs0.58tr.

Within projects related to infrastructure, almost half of the throw-forward is dedicated to the power and energy sectors. A throw-forward analysis in the social sector shows health as a major victim, with an estimated 25 per cent share in the deficit.

Education and higher education are the other major victims.

Ironically, the social sector is a vehicle to achieve key human development targets under the Millennium Development Goals (MDGs). The social sector has more than 1,200 projects in its portfolio, which accounts for one-fifth of the overall throw-forward.

The analysis identifies five key reasons for the debilitating throw-forward. It includes the approval of provincial projects without due consideration, frequent cuts in the PSDP due to resource crunches, weak feasibilities, cost overrun and ignoring public-private partnerships. Yet this report is nothing but a confession of sins, lacking any avenue of atonement. While the document brings valuable facts to light, it skirts around the institutional reasons for this state of affairs.

The Planning Commission is charged with the stewardship of the planning process, the sanctity of which it is mandated to safeguard. Poor appraisal processes that succumb to political pressures, the haemorrhaging of professional and qualified human resources and indecent haste in the project approval process have plagued the public-sector planning process. This has become particularly evident in recent years: the volume of throw-forward doubled within the last five years. Politicians alone could not have done this without the collusion of the planning wizards.

Regardless, the situation does not reflect well on a dispensation which has yet to demonstrate better sense in delivering development benefits to the citizens. In its good years, project appraisal would take two months. The length of this process has, by now, shrunk to a few hours with hardly any critical appraisal taking place.

The Planning Commission lacks the professional will and competence to shield the planning process from the demands made by the project’s proponents. Governments announce and inaugurate projects to gain political mileage while higher-level government offices do not understand the value of and intricacies involved in the development process. With a view to gaining popularity and securing their vote bank, they make generous announcements and often gloss over procedural imperatives.

The role of the Planning Commission is to protect the planning process; yet this is flagrantly compromised to appease the people at the helm of affairs. The Central Development Working Party has itself vitiated planning prerequisites by approving projects without the mandatory scrutiny. Equity in benefits determines the political economy of development; this is very often simply ignored. Certain favoured constituencies receive huge amounts of funding without justification, which eventually puts society under heavy strain.

Likewise, processing the PC-1 without a proper PC-2 is common. The PC-2 is a prequel to PC-1 that has to establish the feasibility of any project. A glaring example of this is the Mangla dam-raising project. The resettlement aspect was ignored at the planning stage. Now that the structure is complete, the project is dogged by the resettlement issue since the costs have doubled from the initial estimates.

Had there been a rigorous appraisal process in place, such anomalies could have been avoided.

The report depicting unsustainable throw-forward was issued in March. Yet in its previous quarterly meeting, the executive committee of the National Economic Council approved of new projects worth Rs300bn. If this remains the trend, it may approve projects costing more than a trillion rupees each year, further fattening the mammoth throw-forward.

Both politicians and planners must demonstrate some sanity to align development with the greater goal of sustainability.

Thrusting more projects on the slim purse of public-sector development will render the whole ineffective. The sector has already touched rock bottom and can ill afford further erosion.

(The writer is the chief executive of Strengthening Participatory Organisation. nmemon@spopk.org)