Infrastructure projects: slowing down makes sense

Jan 07, 2023 Editorial

Kaieteur News – Talk about infrastructure in Guyana and the eyes of men light up. This is an indication of the bonanza that infrastructure projects have come to represent to many Guyanese from different levels in this society. For it means big spending by the State, with seemingly countless billions set aside in the national budget to get a host of public works projects moving from the drawing board to the execution stage. Yet, it is these same costly projects that a London-based group is sounding the alarm over, when dependent on a continuing gusher of oil revenue.

Chatham House, by now a familiar name to Guyanese, pointed out that doing too many of these infrastructure projects within a narrow band of time possesses too much of a risk to continue doing them at the rate that Guyana has been initiating. Some of the risks that are magnified are cost overruns taking a deep bite, the corruption cancer spreading, white elephants turning up, and slapdash work. Take out corruption and white elephants, and what is left is no different than what ordinary Guyanese live with, as they build their own homes or businesses. They rush and they end up with costs running away from them, as in ahead of what was budgeted. Because their contractor may be engaged in more than one building project simultaneously, the result is that what they get for a finished product is shoddy in many of its aspects. What is bad at the individual level, has the same level of meaning and application at the level of governments. It is just a matter of degree and scale, relative to dollars spent and immensity of the job to be done.

Because of Guyana’s construction boom, the really skilled are in short supply, and when additional big-ticket items come their way, as bid for, they are stretched too thin, and the all too human tendency is to cut corners. While quality control might have been an early objective, the crush of abundant work, and shortage of skilled manpower, leads to slippage, and a less than diligent attitude to giving the best job possible. No Guyanese contractor (bidder) worth his salt is going to throw his hat in the ring to compete for a new infrastructure project, so that his business keeps on humming at high speeds. Though this would likely interfere with projects already in hand, such concerns are not a huge priority, for the job will get done somehow. There is the magic bullet that has to be feared, that word ‘somehow’ for it is one filled with meaning, and of the very things about which Chatham House is warning the Government of Guyana.

Getting the work done ‘somehow’ could turn out to mean ‘anyhow’, which is usually hurtful to taxpayers footing the bill for those multimillion-dollar infrastructure projects. There is too much crowding in a narrow window of time. There may not be enough engineers to give the kind of time and attention to these infrastructure projects that is required, and things fall apart. Chatham House did a review of 308 such infrastructure projects embarked upon by countries that made huge oil discoveries. Of the 308 projects, more than half (55%) were late, and 45% had cost overruns (KN January 01). Worse yet, the cost overruns were not on the cheap side, but averaged a jaw-dropping 58% over budget. That is, if a project was for $500M, it ended up being more than $750M.

It is commonsense, therefore, not to engage in too many of these projects one after the other, for a stiff price could be paid. It would be the height of folly to do otherwise, and this country is no stranger to cost overruns. It goes without saying that cost overruns could also serve as camouflage for corruption among cronies in politics and the construction sector, as has long been the case. Unsaid to this point is the consideration that oil prices can seesaw wildly, and go into prolonged slumps, with expected revenues dwindling. We urge the PPPC Government to take stock, slowdown, and position itself to monitor and manage these projects to get the best value out of them for every dollar spent.