Transportation project
delays cause serious consequences
Transportation project delays
are a major problem, Tran Huu Minh, a lecturer from the
What do you think about the slow
progress of transport projects?
I think the situation is alarming. The problem is not
just the slow progress, but also the fact that most transportation projects
cost much more than initial estimates. In reality, there are many projects
that have exceeded initial estimates by 40 to 50 per cent, meaning hundreds
of millions of dollars of additional expenditure. In a country where the
annual per capita income is less than US$2,000, this is a serious problem.
Contractors of these projects often
blame the problems on careless project formulation and inflation. Are these
acceptable justifications?
There are two main scenarios where transport projects
are very slow. In the first one, the chances are high that the contractors
are inexperienced and trying to learn on the job.
In the second scenario, it is the irresponsibility of
investors that comes into play. There are many investors who are experienced
and have acquired adequate technological knowhow, but still fail to complete
the projects on time.
Regarding the cost overruns, it would be rational to
ask for extra funds if inflation occurs and investors have followed all the
right procedures. In my practical experience, I have come across many cases
when the investors are incompetent both in terms of financial resources and technological
knowhow, which has resulted in substandard work that requires them to start
over.
What are the real consequences of
slow projects with cost overruns?
It's necessary to understand that investment capital
for infrastructure development, especially current transportation projects,
mainly comes from the State budget, which means, through people's tax
payments. The slower the projects are, the slower people can benefit. And if
costs exceed initial estimates, people have to pay more for them, while such
money could be spent on housing, education, health care and other needs.
Besides, part of the capital for transportation
projects come from official development assistance (ODA) loans. To get these
loans,
In general, ineffective use of investment capital harms
the people and hurts the nation's economy.
What are potential solutions for
these problems?
From a long-term perspective, education or awareness is
the core element. We need to improve our education so that each individual
understands that the slow progress of projects and excessive spending have
serious impacts on their own lives. But this is a long journey; it might take
from 20 to 30 years for this to happen.
In the meantime, what we need to do is to improve our
policies on managing investment projects and have stronger punishments for
violations. However, it has to be noted that when we tighten regulations on
investors' responsibilities, we also have to think about their rights so as
to motivate them.
It is also necessary to mobilise involvement of the
community in the planning, designing, implementing and supervising of
transport projects. This will enhance transparency and result in better
supervision as well as improved performance.
VNS
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Thứ Sáu, 17 tháng 10, 2014
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