Influential politicians, including Prime Ministers, focused on small projects to please cadres and vote banks.
The images of first car brought to Kathmandu some 67 years ago indicate the notion of then government towards infrastructure development. The pleasure didn't come from building infrastructure for public benefit or for accelerating economic growth, but from meeting own personal needs through any means. Therefore, in place of building a road that even ordinary people could use, the first car was brought to the capital city using dozens of porters for personal use of the rulers. At a time when railroads, roadways, airports, ropeways, tramways and other forms of infrastructures for surface, air and water transport were expanding in most parts of the world, including our nearest neighbor India, Nepal didn't do anything in planning and building such infrastructures. If anything was built along the southern border, it was essentially for the supply of timber to lay the railroads in British India and under their terms.
Slow, unsteady
The architects of first five-year development plan identified infrastructure as a key priority, but without any strategy and availability of requisite finances the plan remained vague. Most of the subsequent development plans accorded high priority to infrastructure development, although key focus in later years has been meeting basic needs, poverty alleviation, job creation, or broad-based growth. Whatever the focus, it was understood that without supportive physical infrastructures not much could be achieved.
And still today we are struggling to give all-weather motorable road access to all district headquarters, let alone all VDC headquarters.
Sixty years ago there was one airport that connected us to the outside world, we still have one. The consolation is that we are at least talking—for over two decades now—about the need for a second one. As work on the second is not progressing, we have pushed construction of a third baby (not a full-blown international airport) and financial arrangements for fourth baby are underway.
Not much needs to be written about energy infrastructure. Everyone knows about our generation and transmission capabilities. Almost all of us who went to college under New Education Plan did a course on Nepal Parichaya and graduated with knowledge that Nepal is rich in water resources. But what we have seen in all these years is the recycling of the waters of Bay of Bengal, which in the process dumps millions of tons of Himalayan silt in the coastal areas of Bangladesh.
The narrative of urban infrastructures and those that directly contribute to enhancing human productivity, such as, drinking water, health facilities and skills development is not all that good. It's really sad to see a five-time former Prime Minister leaving for heavenly abode not in his beloved hometown, but from a hospital in a foreign land because the nation even today does not have proper healthcare infrastructures to take care of heads of state and government. What did all these leaders think about when they were Prime Ministers? Will the current Prime Minister publicly vow that when he's in power he will construct a hospital which can stop him from ever having to visit New York for regular check-up?
Fortunately, due to the right policies of a government formed after Jana Andolan I the communication infrastructure today is generally satisfactory.
Whatever we have accomplished thus far does not create sufficient condition for faster and higher growth. Yes, road network expansion in the last two decades has been good, but we also have the least efficient roads. They just connect settlements. They neither connect places with economic potentials nor do they provide cost advantage to industries/farm-producers. Locations where cheap hydropower could be generated are still far away from the nearest road-head. So are the tourist destinations and locations with mineral deposits.
We all cite examples of great strides made by South Korea, Singapore, Malaysia and other South-East Asian nations. Beginning around the end of last century, China and India have also shown to the world their new-found economic might. Good economic policies and economic freedom definitely did the trick. But what made the remarkable progress possible was government's attention to large-scale infrastructures. In many cases, they executed large projects that technocrats and multilateral financiers vehemently opposed, telling us that those would be white elephants. This is something Vietnam, Mongolia and Ethiopia are doing now—building wide roads where an occasional driver would find miles and miles of road stretch without passing another vehicle. The far-sighted leadership has been determined to
build such infrastructures, which technocrats can’t often see.
Technocrats work on the basis of historical data to project the future. A determined political leadership does not project the future based on past data, s/he builds the future. Technocrats evaluate any infrastructure project on the basis of obscure financial yardstick that depend on the extended projection of the current reality. A visionary politician is not constrained by the spreadsheets of past data; s/he creates her/his own spreadsheet. Railroad connecting Lhasa to mainland China is perhaps a classic example of defiant leadership working with an entirely different spreadsheet.
And, at the end of the day, whether in South Korea or Singapore or Malaysia or China or in Indian Prime Minister Modi’s Gujarat, those bold infrastructure moves have been the game changer.
There are a number of reasons for our slow pace of infrastructure development and implementing game changer project.
Lack of vision
Without any prejudice, after BP Koirala, Dr. Baburam Bhattarai was the only Prime Minister who dreamt of mega projects and also heeded the advice of those who dreamt and wanted to execute big. GP Koirala himself didn’t dream big but trusted his Finance Minister and openly confessed that economics and development planning are not his forte. Evidence suggests that he gave full freedom to his Finance Ministers and trusted them. It was for this reason certain things happened during his tenure. Well, Finance Ministers have traditionally espoused big ideas, but they have had little command over implementing Ministries.
Influential politicians, including Prime Ministers, focused on small projects to please mostly the cadres and in some measure to keep the vote bank safe, which is no different than ferrying cars for personal pleasure. Few politicians lobby for and pursue larger public infrastructures for greater good and accelerated economic growth.
For many years, many of us were constrained in carrying out a grand vision due to our limited means— financial, technical and managerial. With some luck and also due to appropriate policies taken during the years immediately following Jana Andolan I, we now have reasonable financial strength and some technical strength. Managerial strength is still weak, which is something a determined leadership can easily outsource. But still most of top level political leadership does not champion a grand vision. That is why we are stuck debating whether we can ourselves implement an expressway project connecting capital city with Tarai. We continue debating financial viability of Second International Airport.
No strategic orientation
Our infrastructure development has not been strategic. In fact, we never worked on that idea. We built roads, but did not care to see what strategic needs they were meeting. As a result, roads were built without regard for development of economic centers along the road. We didn’t integrate commercial agriculture and tourism infrastructure along the road corridor. In the absence of strategic focus, we built inefficient roads. It’s not only in the road network development; in the case of almost all infrastructure development we have missed strategic focus.
Blaming systems
For the past few years, there has been much talk about government’s low capital spending. Many critics blame prevailing procurement laws and the systems for lackluster capital spending. Even the Prime Ministers are led to believe that the culprit is no other than the procurement law.
When procuring works or services or goods using public money, at least two principles must be followed. Only those governments that are not accountable to the people dismiss these principles. Everyone who is capable and willing should be given the opportunity to supply whatever that the government is procuring. This is why law requires certain days of notice. Second, public money must be spent efficiently so that quality procurement is made at the least possible cost.
The current legal provisions and system, therefore, requires competitive process where lowest evaluated bids are accepted. This does not in any way mean “lowest bid” irrespective of the consideration for quality and ability of the bidder to deliver.
However, in practice, for a number of reasons project managers take the easy route of just accepting lowest bid so much so that the bidder is not able to deliver. This has been the reason for either slow construction work or substandard work.
In addition, most of procurements suffer from governance problem and corruption.
These are problems arising from human weakness and wrong intentions. If the intention itself is wrong, no law can deliver good outcomes. But the law gets all the blame.
Certainly our procurement law has shortcomings. Due to option for generous mobilization advance and provision for subletting works to incapable third grade contractors, many contractors don’t deliver. Both these provisions were good when we had to develop domestic contracting companies. But not now.
If procurement is done as per the spirit of existing procurement law and led by good-intentioned people, then construction projects can be completed in time without any compromise on quality and cost. Kothiyaghat bridge is an example. There are a few others, too.
Getting right people
Many critical infrastructure projects, whether fully government funded or donor-assisted, have been facing serious delays, disruptions, and cost overrun because we don’t get right people to lead them. The Bigger the project and higher the budget, the higher the chances of incompetent project managers being assigned to lead the work. The yardstick for measurement of competence is something else. It is disgusting to hear that people buy placements and there are people who sell—a strange development market!
When we don’t get the right people, we don’t get the delivery. It’s as simple as that.
Finally, a brief commentary on the ability of the domestic private sector in infrastructure development. Private sector is involved in various capacities, mainly as service provider, to government infrastructure projects. This is not the role we are talking about here. Although there’s much to be done to develop domestic contracting community in addition to mobilization advance and subletting provision which have outlived their utility, we have not done anything to develop private sector ability to plan and execute infrastructure project having commercial potential.
Purely welfare infrastructure projects or projects generating public goods are the responsibility of government, but projects like hydropower development, transmission lines, toll roads, airports, tourism infrastructures, etc. could be planned and executed by private sector.
Many of such projects require viability gap financing, for which we don’t have any policy. They require long-term financing and a robust debt market; we don’t have either. Land acquisition for private sector is extremely treacherous job; there’s no policy how government could facilitate acquisition.
In the end, we need to prepare an Infrastructure Development Strategy and then implement it without yielding to petty political pressures.
Khanal is Former Finance Secretary.
