Corruption, nepotism restrict Pakistans development: WB
Report indicates that energy sector will face severe power shortages of approximately 6,000MW by the year 2010
ISLAMABAD: Inefficient public expenditure process, higher cost of basic input, lack of skilled human resources, corruption and nepotism restrict Pakistan far behind in development.
A World Bank (WB) official Amer Durrani expressed these views during launching of the WB report on Pakistan Infrastructure Implementation Capacity Assessment (PIICA) here on Friday. The WB, government agencies and other stakeholders have prepared the report.
The report said Pakistan is suffering from dearth of infrastructure in the water, irrigation, power, and transport sectors. Infrastructure is essential for sustained growth and competitiveness both in the local and international markets. The gaps between demand and supply in these sectors are alarming.
The WB report further said that unless plans are put in place urgently, these critical shortages would continue to undermine the efforts to improve socio-economic indicators and to reduce poverty. Without adequate irrigation resources, power and transport infrastructure, the very sustainability of Pakistan as an independent nation may be at stake as shortages could lead to increased social discontent and disharmony amongst the federation and the provinces.
Pakistan is on the list of the most water stressed countries in the world, and forecasts indicate that available resources are depleting rapidly, possibly leading to a state of water scarcity in the next two decades. Much of the water infrastructure is in poor repair and Pakistan has to invest almost Rs 60 billion per year in new large dams and related infrastructure over the next five years.
In the energy sector, Pakistan will face severe power shortages of approximately 6,000 megawatts by the year 2010 (equivalent to about three Tarbela dams) and 30,700 MW by the year 2020.
The per capita energy consumption in Pakistan is amongst the lowest in the world and a lack of adequate energy resources precludes industrial growth affecting all sectors of the economy. Similarly, the transport sector inefficiencies are costing the economy between 4 to 5 percent of GDP each year indicating the need for massive investment in roads, rail, air and ports.
During the presentation, Durrani said there were large gaps between the actual and allocated funds for infrastructure development projects. Public agencies were taking too much time and delivery was too little. Majority of the developmental projects were based on political priorities. He said that typical infrastructure projects in Pakistan cost twice as much and takes three times longer than planned time.
The WB official said that there were 10 known firms in Pakistan and majority of big projects were given to them. There are implementation, monitoring and feedback missing in the projects. He said average cost of every project increases more than double due to several gaps. Given the paucity of human resources and materials, the poor planning and management skills, and the inability to timely attract substitute external implementation resources, it appears difficult that the large infrastructure projects can be implemented on-time and within budget unless some drastic reforms are undertaken.
Out of the four broad thematic areas of business environment, human resources (HR), plant and equipment and construction materials, HR and business environment were identified as having the maximum number of constraints.
The report further said that contractors and consultants were not being paid the right cost for products and services. Costs of materials and equipment inputs in Pakistan were found to be about 200 percent higher as compared to other countries in the region, while contractors rates in Pakistan were more or less the same as those prevailing in the region. Local rates despite appearing to be competitive in a regional context are in fact unworkable - most contractors also contend that rates are low, precluding adequate profit margins and allowing better salaries to professionals and workers. Given the current disparity between market rates and actual product costs, demand-supply gaps will widen when the Medium Term Development Framework (MTDF) programme is implemented, unless rates are increased.
Delays in project implementation reflect poor planning, programming and weak implementation capacity. Public agencies take on too many projects in their development programs and end up delivering little, and what they do deliver is often determined by political priorities.
The report further said that delays in payment, imbalanced contracts, inefficiencies and corruption in the system force contractors to incur additional financial and economic costs resulting in squeezing the already poor margins in the industry.
The report revealed that lessons from international case studies on the development of the construction industry and the literature reviews clearly show that a holistic long-term planning and a detailed strategy must be evolved with a clear vision and commitment towards developing the industry, and that this process may take as long as a decade or more of sustained effort. There are no shortcuts; however a start must be made if the government wants to continue targeting high growth rates in the future and focus has to be kept on demand side interventions to bring change as these have been shown to be the most effective.
Speaking on the occasion Deputy Chairman, Planning Commission Dr Engr Akram Sheikh said there were some flaws in the system that was why the government felt need of this report. The government wanted to remove these bottlenecks and put the country on path of progress. He stressed for vocational and technical education in the country so that country might progress in all sectors.
Daily Times - Leading News Resource of Pakistan
