At present, megaprojects are emerging as vital drivers of economic growth in Bangladesh. Megaprojects are also becoming more popular because of their ability to attract political and public attention due to high costs, and wide impact on economic activities and the communities as well as the social and natural environment. Their implementation brings significant benefits to different sectors of the economy. Usually, these projects need sophisticated design knowledge and technical skills, competent human resources and managerial capabilities as well as high investments. A common problem with the megaprojects is that these projects often go off the rails, either with regard to budget or time or both.
The government has undertaken a number of megaprojects involving large amounts of money, many of which are based on commercial borrowing as well. Examples include Padma Multipurpose Bridge, Rooppur Nuclear Power Plant, Rampal Power Station, Karnaphuly Tunnel, Matarbari Power Plant, Dhaka Metro Rail Project, Payra Deep Sea Port, Payra Power Plant, Dhaka Mass Rapid Transport, and Dohazari-Ramu-Cox's Bazar-Ghundum Railway Link.
Most of the megaprojects in Bangladesh relate to infrastructures which are crucial to the future of the country's megacities (e.g. Dhaka and Chattogram) and people's livelihood. These big infrastructure projects would also be economically transformative, accounting for a significant share of the country's GDP (gross domestic product) and employment. In the coming years, Bangladesh will be required to invest more in similar megaprojects in developing markets, since there is a rising middle class, rapid urbanisation, and increased economic growth. Bangladesh needs infrastructure-more electricity, roads, bridges, metro projects, and other modern facilities.
The construction of the LNG terminal started in 2010 but due to management snags, the project limped along for long. The government's initiative to build a deep sea port also suffered a delay of around five years. Originally planned to be completed by 2013, the Padma Bridge Project is now making progress. The project that saw several cost escalations is now being implemented at a hefty cost of $3.7 billion, jumping from $2.9 billion in 2010. The Metro Rail project was delayed by five years and is set to be completed in 2020. The construction of the 2,400 megawatt Rooppur nuclear power project is expected to be completed by 2020 and the plant may begin operation from 2022. After initiating the project in 2010, the Rampal 1,320 MW project suffered a delay of two years. As part of the Power System Master Plan (PSMP) 2016, the government will implement 10 megaprojects having a capacity of about 15,000MW by 2030. This shows that both time and cost overruns in megaprojects are common in Bangladesh.
In the literature, there exists 'the iron law of megaprojects'-- over budget, over time, over and over again -- arguing that megaprojects are destined to fail in the light of 'the iron triangle' criteria -- time, budget, and scope. Globally, it is observed that nine out of ten megaprojects struggle from cost and time overruns.
Underestimation of cost and time is a popular method adopted by megaproject promoters and planners, who seem to believe that these projects can only be initiated through adopting techniques, such as the 'hiding hand' (if people knew the total cost of megaprojects in advance, these projects would never take place; thus the problem could be solved by hiding true costs, known as the principle of the hiding hand) or 'creative error' (miscalculating actual costs and benefits of megaprojects in early stages).
Thus, in order to justify a megaproject, costs and timelines are systematically underestimated and benefits systematically overestimated. These methods, however, may lead to various problems, two major ones being: developing a megaproject that is economically and financially not viable, and initiating a megaproject instead of another, producing higher returns due to miscalculations.
Such practices lead to the implementation of megaprojects which look better on paper - with underestimated costs and overestimated benefits. These projects encounter numerous complexities and problems during execution regarding delays, costs overruns, and benefit shortfalls. From the outset, these megaprojects are on the fast track to failure!
One useful reality check is to compare the megaproject under consideration to similar projects that have already been completed. This is often called 'reference-class forecasting'; and the process addresses confirmation bias. For example, if a city wants to build a twenty-kilometer metro line with ten stations, it could look at other cities that have built similar lines to understand the true cost and time dynamics.
Despite megaprojects' essential role in achieving development goals, the performance of these projects remains poor in most developing countries as in Bangladesh. On the one hand, these megaprojects require a set of managerial and technical skills, highly qualified staff members, and large-scale investments during implementation. On the other, Bangladesh lacks the essential skills, competencies, and finance that challenges the development of these projects, preventing from progressing towards a whole new stage of development.
In this context, one practitioner director remarks, 'if managers of conventional projects need the equivalent of a car driver's licence to do what they do, then managers of megaprojects need the equivalent of a pilot's jumbo jet licence'. He argues that the government should not depend on traditional project managers to manage megaprojects. In order to mitigate time and cost overruns, it is crucial to understand project and project management multidimensional success criteria.
Each megaproject has its specific dynamics which is initiated and executed with adaptation to the specific local context, even if a widely accepted standard exists. Although the megaprojects mostly function under a highly sophisticated and complicated context in Bangladesh, they face unpredictability, instability and poor ethical conduct due to numerous challenges. These challenges cover several dimensions, such as technical and engineering, social and human, managerial and political, and sustainability issues.
Hence, project management processes which are rigid in nature such as management of risk, contract, scope, communication, and procurement are more significant. It makes life more challenging and complex for a project manager working in Bangladesh. Successful megaproject management is characterised by the presence of strategic project management and effective leadership by the project organisation along with a precise definition of project objectives, and adaptation of appropriate project management practices and methodologies through effective planning, organising, and control of resources.
In Bangladesh, a poor organisational structure due to the lack of required managerial and technical skills and numerous stakeholder involvement, as well as the provision of unclear and vague objectives, lead to ambiguous and confusing set of responsibilities and authorities of the multiple parties involved in the mega project implementation process. Decision making rests only in the hands of a few senior managers. The senior managers or top executives usually form committees responsible for decision making. However, communication and interaction between these committees and project members involved are often vague with little authority and responsibility leading to slow decision-making processes.
Any big project also carries a big risk of failure; but regularly going over time and over budget implies that there are systemic errors at work. And this means these problems can be identified and addressed. An experienced project manager is not enough; players must assemble a team that has all the requisite skills, including legal and technical expertise, contract management, project reporting, regulatory approval, stakeholder management, and government and community relations.
No doubt, Bangladesh needs megaprojects to deliver the economic and social goods that millions of poor people lack, and ignite the rapid economic growth that the country is aspiring for. But a bad megaproject has consequences that go well beyond a specific bridge, tunnel, or metro system. Getting it right is good for all.
Dr Mustafa K Mujeri is Executive Director, Institute for Inclusive Finance and Development (InM). mujeri48@gmail.com