Local expertise for mega projects

T. P. RANAWEERA

EXPERTISE: The President is reported to have delved into the subject of feasibility studies on mega projects, carried out by foreign consultants resulting enormous costs, which could have been avoided or minimized if the local consultants had been engaged.

At the out set he should be congratulated for making this bold statement, but in my view practicalities of getting local experts to handle the Feasibility Studies of mega projects, mostly funded by multilateral development Banks should be carefully examined.

I also refer to a news item written by Deshabandu Surath Wickramasinghe (SW) a leading Architect, welcoming the President's statement, which should be much appreciated.

But some misconceptions could be created in the minds of your knowledgeable readers through this news item and therefore the contents need some corrections. Mr. SW says that the practice among most Government Agencies is to call on multilateral funding agencies to undertake the feasibility studies for Projects covering difficult economic sectors.

However, it must also be reminded that if the GoSL Agency promoting the particular Project and wants to prepare their own feasibility report, they are perfectly at liberty to do so provided they have the necessary staff and expertise and this procedure is acceptable to the Banks.

I cannot visualise the type of 'difficult economic sectors' he is referring to. But certainly if his reference is to sectors such as roads, water supply, sewerage, storm water, where billions of rupees are being invested, Mr. SW is clean out of track!

While the President's statement is generally true, it should be pointed out that only consultants selected by the Lending Agencies/ Banks and concurred by the GoSL, are acceptable to carry out the feasibility studies on mega projects, which are funded by the Banks.

However, Banks in fact do open equal opportunities to their member countries to take part in all its business activities whether it is consultancy or any type of procurement or otherwise.

I think that most GoSL Agencies do not have adequate staff and expertise to undertake feasibility studies by themselves and prepare the reports; within a given time frame.

Their expert staff is otherwise engaged on regular work and too busy to take on additional work. Therefore the Agencies are compelled to leave the Banks to conduct such studies by Consultants of Banks' choice.

To select a consultant, these Banks publish for 'short-listing' of consultants in their web site or international journals. Any registered consultant within the member countries, including consultancy firms from Sri Lanka could apply.

Thereafter, the lending agency would short-list, five or six consultancy firms, generally one or two from each Region or Continent and call for more detail proposals only from them. After such proposals are received and studied by the Bank, it selects the consultancy firm, giving merit to their proposal for carrying out the detail feasibility.

There after the successful consultancy firm, often in partnership with a local consultancy firm, prepares the Feasibility Proposal and in coordination with the GoSL agency responsible, while addressing the terms of reference.

Besides the local consultants can also be associated with the foreign consultants if the short listed consultants so wish, but in the final selection of the Consultant for Feasibility Study, such association is not given merit, which is a shortcoming of the Banks' policy.

Their policy does not exclude the selection of local consultancy firms for carrying out such studies, but invariably such selection does not happen for reasons best known to the Banks! Except in one case, I do not know of any other feasibility study carried out solely by local consultants.

Unfortunately GoSL Agencies have only a marginal say on the selection of Consultants for carrying out feasibility studies, once taken over by the Banks.

Perhaps it may be that the Lending Agencies always want an unbiased study of the needs of the Community devoid of political favours or vested interests or it may be that in their view the local consultancy firms in some of the sectors do not have suitable staff with appropriate experience to carry out the works to the satisfaction of the Banks! Let me be emphatic that in reality, Lending Agencies do not agree to release a loan unless they are satisfied that the investment is financially, economically, socially and environmentally sound stable.

Upon completion of the feasibility report, the banks sends a Fact Finding Mission to discuss with the GoSL and make any adjustments if requested by the GoSL Agency.

This would be the opportunity when the Government Agency could fully accept, reject or modify the proposals put up by the foreign consultants to the benefit of the country and in line with the national interests.

Sadly sometimes, this does not happen in the way it should! The objective of the Agency, by this time is to some how take the Loan, as soon as possible, some times for their personal benefits.

The multilateral banks adopt this system of selection of consultants for two main reasons;

(a) Feasibility studies are mostly funded by them as a Grant with only limited funds provided by the GoSL as payment and incidental expenses to the Support staff of the Government.

(b) As a matter of policy, multilateral banks whose capital is formed by the contributions from the member countries are given equal opportunities to the member countries to participate in the bank funded projects.

These are the cardinal reasons for the selection of consultants by such banks in the preparation of feasibility reports. Last but not least, GoSL Agency can do what it wants with the proposal after the Feasibility Report is submitted to them.

Under this scenario we should not totally blame the foreign consultants for enormous costs which reaches us as grants we should look inwards and see whether we are performing the job in the national interest and whether the local consultants have the right expertise to handle some of the complex projects which could be a matter of conjecture!

I agree fully with Architect Wickramasinghe, that the local consultants for whom they are paid only a meagre sum in comparison to expatriates' earnings are doing bulk of the work.

It is an uphill task to reduce these gaps and employ local consultants exclusively for the preparation of Feasibility reports even with the intervention of the President simply because we are dealing with the multinational agencies that provide us with the necessary funds under a global or regional scenario more frequently as grants.

His invitation to our Sri Lankan experts who are serving in other countries to return and join the nation building exercise is most opportune and should be viewed with much hope and expectations.

Our professionals, particularly engineers, doctors and architects leave our shores in search of greener pastures after obtaining the knowledge, qualifications and experience at a significant cost to the Nation.

This is not a phenomenon that happens only in Sri Lanka, but happens in India, Pakistan, Bangladesh as well.

In this backdrop let us sincerely hope that those serving overseas will hear the President's call and take his patriotic request to heart and return.

However, it is my concerted view that local experts living outside Sri Lanka are unlikely to return only with the purpose of serving the Nation. Instead they should be given attractive remuneration, in hard currency and benefits, through the consultancy firms bidding for such projects.

It is suggested that foreign consultancy firms be encouraged by the Banks to employ Lankan expatriates in their Team and be given an additional weight age in the selection process.

Alternatively Lankan expatriates could be offered places with established local Consultancy firms with prove track record and provision made to receive their remuneration in hard currency.

These arrangements can be adopted during the selection of Consultants for the Implementation phase of Projects, which is under the total control of the Implementing Agency under GoSL. After all the consultancy costs for the Implementation phase is part of the loan as against Feasibility Consultancy costs.