Important, yet they get nominal allocations in ADP

The government at the end of last year approved a Tk5,905 crore infrastructure repairing project to heal the wounds left by Cyclone Amphan in rural Bangladesh.

With an allocation of Tk71 crore in the current fiscal year, the work – to commence in the 2021-22 FY – has almost completed such preparations as floating tenders. In the next annual development programme (ADP), only Tk170 crore has been allocated for the work though a fund of Tk1,000 crore had been sought.     

Project officials on condition of anonymity said the work was supposed to be completed in 2023. But if the money flow to it remains so meagre, the work will not be finished in the next 20 years while costs will go up substantially.  

According to the Norwegian Refugee Council's Internal Displacement Monitoring Centre, Cyclone Amphan displaced 25 lakh people in Bangladesh in May last year. If the rural infrastructure repairing began, it could create employment opportunities for the displaced as well as help reduce poverty.     

Like the infrastructure repairing project of the Local Government Division (LGD), many development works with top public interests do not get adequate allocation in development spending while the government's mega-projects get funding as per demands. Execution of projects related to the public interest face uncertainty due to scant funding.  

The Planning Commission says since the public agencies undertake too many projects against limited resources, a crisis over equal ADP allocation prevails. The commission also accused the public offices of not complying with the medium-term budgetary frameworks (MTBF) – a three-year ceiling for projects and allocations.     

Development experts said political influence highly dictates project undertaking and allocation. Influential political leaders and bureaucrats have taken up too many projects, violating the MTBF limit. Such violation puts a squeeze on money supply to ongoing projects as per demand.    

The fund crunch results in project delays, while the delays hike the project costs manifold, they noted.     

According to Planning Commission officials, the LGD's allocation ceiling in the upcoming year is Tk33,832 crore, while the division demands more than Tk50,000 crore for project implementation.    

It is not only the Local Government Division, but also other ministries and divisions that have more to gain politically from project implementation which demand more development allocations, the officials said.

They added though the government talks about a balanced development, it is not followed in most of the cases.

Planning Division Secretary Mohammad Jainul Bari said the relevant ministries and divisions determine the priority of how much will be allocated for a project. The Planning Commission only distributes the allocations.  

He said the disregard to the spending ceiling is not solely responsible for the allocation crunch. "We often slash the allocation to some projects after detecting them having low spending appetite in a fiscal year. Moreover, we sometimes need to trim allocations for other works to pump money into a single project," he added.     

Dr Fahmida Khatun, executive director of the Centre for Policy Dialogue (CPD), said the more influential the political leaders are, the more projects their areas have. This often leads to approval of less important projects.  

"Project undertaking must be free from political influence in the interest of balanced development. Project allocations also must ensure transparency," she noted.

Dr Fahmida Khatun said the economic benefits of a project do not determine the project in Bangladesh. "If we considered the project output, gauging the project priority would have been easier", she said.

Shamsul Alam, member of the General Economics Division of the Planning Commission, said new projects are taken up due to several kinds of pressure. Besides, new works are sometimes taken up owing to particular situations.

"These reasons are pushing the number of projects beyond the MTBF ceiling. But the ministries and divisions should focus on completing the ongoing projects fast rather than taking up new ones," he added.          
 
'Contractors will not get paid from this fund'

Another glaring example of allocation deprivation is a project to construct bridges connecting rural roads. At a cost of Tk3,927 crore and a three-year deadline, work on the project began in 2017.   

The work had a Tk155 crore allocation in the revised budget of the 2018-19 FY. The allocation rose to Tk240 crore in 2019-20 FY while it got Tk500 crore this year. With a recent three-year deadline extension, the project cost spikes to Tk6,457 crore.  

Project officials concerned said an allocation crunch and implementation failure in terms of target and deadline had pushed up the project costs.   

Though the overall cost of the project went up, the allocation did not increase in the ADP for the 2021-22 FY.    

Project officials said the execution of the project is now going on in full swing and the work can spend Tk1,000 crore in the upcoming year. But if the contractors hear about only a Tk300 crore allocation in the next budget, they will slow down the work.  

That is because they will not get paid for their work, noted the officials. Against the backdrop of the situation, efforts are on to pump money into the project from block allocation.  

Already 'delayed'

Apart from the above-mentioned work that may face fund crunch-led interruption and get delayed, an Implementation Monitoring and Evaluation Division (IMED) report shows how a project to protect Barisal's Mehendiganj from river erosion has already got delayed due to inadequate allocation.

The execution of the Ulania-Gobindapur project at Mehendiganj was interrupted in 2019-20 and 2020-21 FY owing to inadequate allocation. Though the work was scheduled to be completed in June this year, it will miss the deadline, says the IMED report.      

The IMED has recommended a one-year extension of the project.  

The Tk384 crore project saw 38% progress in spending and 52% in physical development until February this year. Project officials hope to finish the work in the 2021-22 FY with this allocation as it has been allocated Tk60 crore in the upcoming year.