Whither Accountability?

Genuine efforts are needed for revitalising the state's ability to deliver

By Dr Noman Ahmed

The recent governance norms have vastly changed the value system pertinent to accountability, because the institutional efforts towards unearthing corruption and follow-up prosecution have been erroneously criticised as acts of persecution against the political leadership. With the National Reconciliation Ordinance (NRO) firmly in place and the 'deposed' judiciary on-the-run, the mechanism of financial accountability seems a total non-starter.

It is common sense that those who may have bungled public funds will probably never be brought to justice in such a scenario. The downside of this problem is that the capacity of state institutions has drastically eroded in terms of decision-making, planning, procuring and implementation in all sectors of performance. Therefore, it is logical that, instead of attempting to resurrect financial accountability, efforts must be made to institute performance accountability for revitalising the state's ability to deliver.

Performance review is a modern concept in governance. Enlightened societies have adopted it due to its relevance and effectiveness towards service delivery to taxpayers. In the United States, there had been concerns raised by civil society that governmental accountability was internalised and difficult for the public to monitor. Concept and practice of performance audit was introduced for making the procedures transparent and quick to repair.

Former US President Bill Clinton advised his administration to examine every endeavour for which tax was charged. Based on the progress, he advised to instantly stop practices that did not deliver, and to continue investment in all systems and procedures that were beneficial to service delivery. This approach applied more effectively in the domain of implementation. When we compare the performance review measures and follow-ups in Pakistan, there emerges a completely dismal picture. Whether it is the Public Sector Development Programme (PSDP) or routine functioning of the state machinery, a thorough assessment is needed to improve the performance.

In the norms of governance, conceptualisation and decision-making are the first steps in any sectoral performance. They are approached in the order of ascending importance. The tasks of utmost urgency are addressed immediately. Colossal flaws can be found in the most vital sectors. In the domain of energy and irrigation water supply, the bureaucrats, technocrats and politicians continued the futile effort to focus on Kalabagh Dam alone. Knowing fully well the consequences of not building water reservoirs for agriculture and other uses, the opportunity of production was lost for at least three decades since the Tarbela Dam was built.

The ongoing global oil crisis has directly hit the power sector, which draws about two-thirds of its production from thermal plants. According to experts, Pakistan has enough hydel power potential to produce more than 40,000-megawatt electricity. Currently, only 16 percent of this potential is being realised due to delayed and flawed decision-making. Munda Dam, which was slated to become operational in 2016, is struggling to come out of snags. The feasibility of this 740-megawatt project was being prepared by an American firm, but it backed out in May 2008. Despite assurances from the concerned federal secretary, it is obvious that the project will not be completed on time.

Basha Dam, which is being built in Chilas, 200 miles upstream of Tarbela, shall take another eight years to complete. It is designed to generate 4,600-megawatt electricity. It may be noted that hydel power is six to eight times cheaper than thermal power. Therefore, increase in hydel capacity shall positively increase the fiscal space available to the country's economic managers. Needless to say, the opportunity cost of delaying dams runs into billions of dollars each year. Somebody has to be held accountable for not taking these vital decisions that are singularly responsible for raising the country's current account deficit unnecessarily.

Development works in Pakistan are largely dependent on contracting procedures. Much of these works in different sectors is carried out by foreign firms or local multi-national outfits. It is empirically found that the value for money output in a vast majority of these projects has been dismal. For instance, the Indus River Systems Authority (IRSA) awarded the contract of installing telemetry system, for generating accurate data on the water losses and other attributes, to a multi-national firm. However, considerable problems evolved thereafter. In short, despite spending Rs350 million on the project, the desired results could not be achieved.

The Left Bank Outfall Drain (LBOD) is another case in point. Probably the largest project of its kind in Asia, the drain has been built with numerous defects that keep affecting its prospective beneficiaries. The extensive operation and maintenance cost of the drain is a serious drag on the exchequer. Besides, the LBOD played havoc during the torrential rains in May 2008, when people had to leave their abodes for safe locations. The World Bank inspection team also acknowledged the defects. These instances call for initiating performance accountability at the decision-making, technical, financial, executive and maintenance levels of the project. Unless we are prepared to take stock of such failings, catastrophes of similar kind are bound to reoccur.

The PSDP is the most important development outlay for the country. The politicians make us believe that by increasing the size of the PSDP, the impact of development shall increase. Theoretically, this should have been the case. But this does not happen on the ground. The loss of funds due to corruption is incredibly high. According to a study done by eminent economists of the country in 1996-97, corruption accounted for more than 20 percent of gross domestic product (GDP) and its impact on the PSDP was even higher.

Another issue is the choice of projects against mutually competing requirements. At this stage also, political considerations seem to have overtaken the actual need of the masses in certain sectors. For instance, the National Highway Programme will receive funds at least three times higher than that of the Pakistan Railways. It is common sense that railways, as a mode of travel, have a direct link with socioeconomic development of the poor and lower-income groups. The Pakistan Railways also suffered tremendous losses in December 2007 riots following the assassination of Benazir Bhutto. A plain performance analysis of the two modes can unveil the better value for money that railways can generate, both at the capital and operational cost levels.

A major issue in the performance failures and consequent loss of funds is at the level of micro-contracts. The lane sewers, water supply schemes, access roads, small buildings, repair works and replacement of tertiary infrastructure are some examples in this connection. Many research studies have established that much of these works are awarded on the basis of political gratification to the selected individuals, who mostly do not have the technical and managerial ability to handle such affairs. Though the loss of amount seems to be small, it has a grave implication on the quality of life of the targeted population and their productive outputs.

For instance, if a farm-to-market road is poorly constructed, it adds transportation cost factor to the produce of the farmers. A cumulative effect of this shortcoming has a bearing on the selling price of the agricultural produce. Similarly, an inaccurately constructed sewerage line can cause spread of diseases that may raise the domestic health care expenditures unnecessarily.

The mechanism of technical audit is almost no-existent at the district or tehsil level, thus the problem continues to grow out of proportion. Fiddling with the contract award procedures has miserably failed in the past, given our peculiar sociopolitical linkages. The best way of tackling this problem is to build the technical and financial capacity of small-scale contractors to execute the assigned works in a technically perfect manner. In short, the administration must venture to increase the performance outputs from whosoever wins the contracts.

Courtesy: The News Pakistan