Projects, Projects everywhere: But who

knows how to run them?

Monday, 6 July 2015

There are projects all over but many of them are failed projects
Human history is replete with projects enabling civilisations to deliver
marvellous creations through them. But many of them have been failures
right from the design stage. Sri Lankas recent history is marred by a
plethora of such failed projects due to errors in design. Of them, the
Hambantota Harbour failing to attract large draft ships due to low depth of
the harbour, the Mattala Airport with a runway perpendicular to the
headwinds forcing airlines to shun it and the Diyagama International
Sports complex with a running track slightly shorter in depth than the
international standards so that no international sports event could take
place are some striking examples.
The latest addition to this project failure is the acclaimed public private
partnership involving the Hyatt Hotel project in Colombo in which costs
have doubled due to profligate financial management, an issue involving
the failure to observe economic policy governance.
All these issues in projects could be overcome if all those involved in public
projects politicians, bureaucrats, project managers and civil society are
conversant with the first principles of projects.
Now those first principles have been codified in a comprehensive manual
type text by a Sri Lanka born academic Nihal Amerasinghe previously at
the Asian Development Bank or ADB and now a professor at the Asian
Institute of Management or AIM in Manila, the Philippines. The title of the
text is Design, Appraisal and Management of Sustainable Development
Projects.
A manual by an experienced practitioner
Nihal Amerasinghe is an aptly qualified academic cum practitioner to write
a text on project management. His long career has been with ADB whose
vocabulary has nothing but projects. Having completed a degree in
agriculture at Peradeniya University in Sri Lanka, he has acquired two
Masters degrees in economics and environment from Manchester and
London Universities, respectively, followed by a doctorate in economics
from the latter. He is presently at AIM disseminating his wisdom as an

academic. Thus, Amerasinghe is a combination of practice with theory, the

foremost requirement for somebody to write a manual on a complex
subject.
The logical organisation of the manual
The 25 chapters in Amerasinghes book have been presented in five parts:
The first part talks about projects and development, the second about
project identification and design, the third about project feasibility and
appraisal, the fourth about project implementation and control and the fifth
about the project completion and evaluation.
The chapters have been planned in such a way that they could be mastered
by interested readers separately as individual essays or together as a single
text to acquire the desired knowledge on project management.
Three serious flaws of development policy
Amerasinghe begins his book by analysing three serious flaws in
development policy planning attributed to Romanian-American Economist
at the University of California at Berkeley - Irma Adelman.
One is the reliance on a single contributor to keep economies at low growth
called monocausalism. Over the years, many such important contributors
have been identified but removing them from economies has not led to
economic growth demonstrating that growth is a multifaceted activity. The
second flaw is pursuing a single goal in development such as increasing per
capita income as had been done in Sri Lanka during the administration of
Mahinda Rajapaksa.
Amerasinghe says that such pursuits have brought in greater worries to
countries such as inequality in income distribution, weakened democracy,
loss of cultural identity, overconsumption of natural resources and
environmental degradation and so on.
All these have been the result of Sri Lankas reported higher economic
growth in the past few years. The third is the most serious flaw in policy:
that is, believing that natural systems move on a straight line enabling a
country to attain a pre-planned economic growth without any derailment.
Sri Lankas Central Bank and the Ministry of Finance have been famous for
making such linear economic growth forecasts to find that actual
realisations have always been at variance from the projected path. That is
because all natural systems are non-linear based on such laws as the law of
cause and effect, the law of impermanence and the law evolution. It is
therefore of importance that Sri Lankas policy authorities learn one or two
lessons from Amerasinghe.
Development is not just economic growth but many more
An important element highlighted by Amerasinghe is the meaning of
sustainable development which should be the aim of all nations today.

Drawing on Nobel Laureates Gunnar Myrdal and Amartya Sen, he has first
presented a wide definition of development that encompasses social,
political, cultural and humane aspects of living in addition to economic
factors. Then, he solidifies development by incorporating the concept of
sustainable development drawn basically from the Brundtland Commission
headed by the former Norwegian Prime Minister Gro Harlem Brundtland.
If you want to sustain, enjoy today without harming tomorrow
According to Brundtland Commission, sustainable development is the
meeting of the needs of the present generation without compromising the
ability of the future generations to meet theirs. It involves two generational
equities: Intergenerational equity where resources are passed onto the
future generations in reasonable conditions and intragenerational equity
where the same transfer takes place among different segments of the
present generation.
Any public project should take into account this wider concept of
development and the need for making such development a sustainable one.
The ad hoc projects implemented in Sri Lanka in the recent past beg the
question whether these aspects have been considered at all at the design
or implementation stage.
The impact of a project is the key criterion of success
Public sector projects are normally appraised by public authorities in terms
of the money spent or the output produced. A classic example is the Central
Bank Annual Report or the Annual Report of the Ministry of Finance which
have tended to assess the success of projects in terms of money spent on
them. But Amerasinghe says that the important assessment criterion
should be the outcome of a project that leads to creating an impact on the
economy. The impact should not only be sustainable but also bring in
ultimate human development by expanding the opportunities available to
them as human beings.
Simple project management has now become a complex process
Amerasinghe has provided a very interesting account of how projects
evolved from 1950s to date. In its evolution, the scope, design,
management and ultimate aims of projects too have expanded
considerably from six simple goals to 47 complex goals.
Amerasinghe has presented the six basic goals in a six-sided polygon:
economic, technical, political, administrative and managerial,
environmental and social and financial are these concerns. Then, he builds
around these six concerns different parameters or key sub concerns which
have been added to the goals of projects in each of the subsequent phases
of their evolution.

What actually started as a simple operation of project management in

1950s has evolved today to a very complex structure that is not easy for
ordinary project management people to comprehend. Amerasinghe calls
this complex structure the conundrum of 2000. It contains practically all
the broad aims which a modern society aspires to attain in its social
cultural, political, economic, legal, administrative, financial and spiritual
spheres. There is a justification for this broad treatment, since it is
taxpayers money which is being used for public projects.
However, if a discipline becomes too complex, the likely outcome would be
the complete disregard of those added parameters when actual project
management exercises are conducted. Even when they are reckoned, the
project management still runs the risk of their not being treated seriously.
They just become a wish list in the minds of the project practitioners.
Amerasinghe too has raised the issue by questioning whether the project
management has become more effective over the years. But he notes that
according to the observations of major project financiers, namely, ADB and
the World Bank, project performance has improved despite the complexity
built into project goals. Only the projects implemented under the
sponsorship of the European Bank for Reconstruction and Development,
Europes counterpart of the World Bank, these goals have been only
partially successful.

Project steps are also time involving intricate processes

Project cycle too is a 13 step complex process, according to Amerasinghe.

There are seven steps to be completed leading up to project approval:

identification, design and formulation, feasibility analysis, project appraisal,
project selection, negotiation and finally approval. These are also complex
processes and when it comes to developing countries, there is no home
based expertise available to complete them successfully. Hence, in many
instances, external assistance has to be solicited and such external
assistance is normally extended by the project financier himself leading to a
conflict of interest.
After the approval, there are 6 processes to be completed: project
activation, implementation, supervision, monitoring and reporting,
completion, evaluation and follow-up analysis and action. Amerasinghe has
given a detailed description of actions involved in each of these different
steps. This is where projects fail because in developing countries, the
political authorities which have arrogated powers to themselves for
initiating projects cannot wait such a long period to have project approved
and a further period to complete the project. Hence, many steps are
overlooked similar to the disregard of the broad goals involved in modern
projects. Politicians who go by election cycles and not the natural cycles
demand that projects are completed in time for them to market at elections
though the accomplishments are half-baked and bound to fail shortly.
A good example is the infrastructure projects undertaken by the Mahinda
Rajapaksa administration in the last 5 to 6 years. Amerasinghe has been
emphatic on evaluating the outcome and the impact of projects which have
to be done after the completion. These two aspects are mostly disregarded
in almost all the projects implemented under political patronage.

Many pitfalls of development planning

Planning has been considered the saviour of many developing countries
which have failed to maintain a reasonable rate of economic growth and

reduce poverty through continuous economic advancement. One question

which critics of governments normally raise is where is your plan? and
they opine that without a plan, how can an economy grow? Thus, all
developing countries have resorted to meticulous planning which they
emulated from the experiences of the former Soviet Union. India had a
rolling planning system in every five year period with emphasis for the state
to make critical investments.
While admitting that many developing countries have planning capability
today than before, Amerasinghe has laboriously documented the reasons
for the failure of development plans. They arise from external forces,
shortcomings of planning process itself and due to problems which planners
would run into in plan implementation. Important external forces are the
lack of peace, wars, natural calamities and increases in world prices that
derail plans. In the planning process, often identified causes are the
inadequate preparation including capacity, lack of credible data, disregard
of the importance of governance, corruption and most importantly failure to
learn from previous mistakes.
Plan implementation is hindered, according to Amerasinghe, due to
budgetary constraints, ownership issues, conflicts, bureaucratic
inefficiencies, harmful political interferences and failure to effectively
monitor plans. These are critical issues but can be resolved if due
recognition is paid to capacity development and management of politicians.
But one of the issues in development planning is the availability or
mobilisation of resources as displayed by Sri Lankas Five Year Plan in 1971.
Without resources, the targets and objectives of a plan are just wish lists. If
a countrys government is infested with a weak budgetary situation and the
private savings are insufficient to finance the planned activities, resorting to
foreign financing becomes crucial for planning. But if a country does not
have a good governance structure, the mobilisation of adequate foreign
funds will be a problem.
An important manual enriching the toolkit of project practitioners
The rest of the book is a detailed manual of project design, appraisal and
management. Amerasinghe has drawn on his rich practical experience in
these areas to make his manual a comprehensive document. A project
practitioner does not have to turn to any other document to design and
implement a project successfully. It is a self-contained manual with
elaborate explanation of steps to be followed, checklists to be marked off
and ways to tackle delays and problems.
The practical use of the manual has been enhanced immensely by the
colourful illustrations that have been added to chapters for easy
understanding of the complicated processes involved. There are many
exercises which the practitioners have to work out in order to self-test their
learning. There is a step by step building up of answers to critical issues, a

novelty that one finds in a manual. Each chapter starts with an introduction
that would guide the user what to expect from it. After presenting the body
of knowledge, it ends with a summary of key points helping the user to
revisit his learning outcome.
The manual on Design, Appraisal and Management of Sustainable
Development Projects by Nihal Amerasinghe is a timely addition to enrich
the toolkit of project practitioners throughout the globe.

(W.A Wijewardena, a former Deputy Governor of the Central

Bank of Sri Lanka, can be reached at waw1949@gmail.com )

Roundtable discussion of
Amerasinghes book
Nihal Amerasinghe
Posted by Thavam