Better execution of road projects needed
April 16, 2003
The World Bank says the government needs to adopt implementation arrangements for road projects which focus primarily on an efficient discharge of financial management, contract tendering and monitoring responsibilities.
In an assessment of public expenditure in the road sector, the World Bank cited its experiences with the Essequibo coast road as a classic example of the problems facing expenditure in this sector. It noted that three contracts for the rehabilitation of the same stretch of road were issued to three foreign companies at different times and all of these were prematurely terminated and resulted in court proceedings or arbitration.
“Implementation by the PEU (Project Execution Unit) was characterised by poor management, accounting and financial management irregularities, and delayed auditing,” the report noted. It said the procurement process was slow and faulty which resulted in many re-bids and further delays to that project whilst a lack of counterpart funds towards the end of the project further retarded its completion.
The expenditure review notes that the bulk of the capital budget for roads, as in many other sectors, is donor funded but the objectives of the road projects are often not met as a result of institutional, policy and budgetary problems. It finds the capacity of the Roads Administration Division (RAD) in the Ministry of Public Works and Communication, to be limited and highlights the need for the government to adopt efficient project implementation arrangements.
This, the Bank says, would require the government to recruit quality staff and closely oversee their performance while not interfering in the day-to-day operations.
The World Bank points out that improving the overall maintenance of roads while rehabilitating selected roads and bridges could lower the cost of transport substantially. This would translate to longer life spans for vehicles and a reduction in the need for fuel and spares. In turn, this would impact on the country’s trade deficit by lowering it and also lowering the cost of transportation (a significant share of household budgets) and food.
Guyana has a road network stretching 1,610 miles in length and a fifth of this is primary roads whilst another fifth is feeder roads and the rest is interior roads and trails. The World Bank report notes that much of the road network is in poor condition. The main paved road runs 270 miles along the coast. This, the Bank says, is largely in satisfactory condition but significant portions require rehabilitation. The report also cites the delays at water-road connections due to river crossings.
Roads in the interior, the Bank says, are in much worse shape: essentially being trails accessible mainly by four-wheel drive vehicles and mostly impassable during the rainy season.
A 1995 consultant’s study had recommended that US$4.9M be spent annually by the government on road maintenance, but the expenditure review notes that this budget has averaged only US1.1M during 1996-7 and US$620,000 during 1998-2001.
“There is urgent need to improve preventative maintenance as well as undertake some neglected maintenance. Given budgetary constraints and other demands on the budget, this will require identifying and implementing cost recovery mechanisms for financing maintenance,” the report says. It added that experience has shown that it is difficult to budget sufficient funds for maintenance or to find suitable staff to carry out the activities. Hence more radical self-financing options have to be explored.
The Bank says that one policy option open to the government is contracting out the running of most bridges and ferries as well as selected roads to private operators and users. The government has already begun doing this in several cases with the concessionaire operating and maintaining the infrastructure and being allowed to charge user fees.
The review says if necessary, the concession could also include government financing - possibly donor funded - for investments. It adds that while the design and enforcing of such contracts and regulations may be uncertain, donor-funded projects could help finance technical assistance for this purpose.