To cut costs, govt decides to take out non-essential dev project components

The government has decided to remove the components of development projects that are not deemed indispensable, as part of its austerity measures amid concerns over the global economic downturn and depleting foreign-exchange reserves.

The authorities will slash allocations for such project components in the revised annual development programme (ADP) for the current fiscal year 2022-23, according to decisions made in an inter-ministerial meeting held on 8 January with the Prime Minister's Principal Secretary Md Tofazzel Hossain Miah in the chair.

In the meeting, all the ministries and divisions were instructed to identify the "non-essential" components of development projects, say the minutes of the meeting themed "ADP Implementation Progress and Macro Economic Situation". The meeting was aimed at increasing efficiency in development and operating cost management.

Earlier, the government banned unnecessary foreign trips, meeting allowances, and buying cars under development projects.

The meeting pointed out that most of the projects taken up by the Road Transport and Highways Division include the construction of rest houses which are not necessary for road projects, and ordered the exclusion of this component from all ongoing and future projects of the division.

Stakeholders said development projects in the country usually have many unimportant components which lead to the wastage of a lot of public money.

Officials of the Planning Commission told The Business Standard that besides comprising several non-important components, development projects often have additional allocations in some areas, such as consultancy costs. Many development projects do not require consultants, and yet funds are allocated to this sector, they added.

For example, they said, a road safety project had earmarked Tk440 crore for consultancy. Terming this expenditure as unusual, the Planning Commission recently ordered its exclusion from the project proposal.

While speaking about non-essential elements of development projects, an official of the Planning Commission referred to a project undertaken to increase the Bangladesh Petroleum Corporation's fuel oil refining capacity that includes a proposal to upgrade a school into a college.

Since converting a school into a college involves a number of essential issues including manpower, the Planning Commission has directed the BPC to drop this proposal from its proposed Installation of Eastern Refinery Limited Unit-II project.

Every development project includes some unnecessary elements of this kind, said Planning Commission officials, adding that despite the objections of the Planning Commission, those unnecessary parts are retained most of the time.

People concerned said that Tk13 lakh to Tk20 lakh is allocated for mid-term evaluation of the projects of some organisations including the Ministry of Agriculture, the LGED, the Directorate of Social Services, and the Ministry of Water Resources. This money is taken by officials as honoraria.

Planning Commission officials feel that this type of expenditure should be excluded from any development project as these are unnecessary expenditures.

Publicity and advertisement, books, periodicals, refreshment allowances, seminars, and furniture are not indispensable for projects but allocations are made for these sectors in many development projects, they added.

Apart from this, the Planning Commission has raised questions about the trend of renting cars even though allocations have been made for buying cars in many projects.

Mustafa K Mujeri, former director general of the Bangladesh Institute of Development Studies (BIDS), said every development project is taken up with a key purpose, but implementing agencies add various components to the project beyond the original objective. And a project having too many components means a waste of money.

"The government has decided to cut off non-essential components [of development projects] only from the consideration that we are struggling in the current economic situation. This is a good initiative even if it is late."

He, however, suggested that necessary measures should be taken so that unnecessary elements cannot be added to a project during its formulation time. Unnecessary elements must be eliminated to restore discipline in development project implementation, he added.

State Minister for Planning Shamsul Alam told TBS that the government is emphasising project management to save costs.

The decision to cut non-essential project components is a timely move, he noted, adding, "This means that the money allocated for development projects will be properly utilised."

To rein in unnecessary expenditure in the public sector, the Finance Division issued a circular in November 2022 banning foreign trips by officials under development projects. The government also issued a similar circular in July last year.

Besides, in July 2022, the government issued a circular to stop paying honoraria for attending meetings on development projects.

In view of the current economic situation, the government has also halted allocations, either fully or partially, to several projects on a priority basis to reduce the cost of development projects.