There is currently a spree of construction of physical infrastructure in the country. The necessity of such infrastructure facilities is undeniable. But the construction processes of some of the projects are drawing criticism.
The phenomenon is, however, not unique for Bangladesh. Many countries of the world have gone through such experiences. Some developing countries are still going with similar type of construction spree without adequately considering long-term real benefits.
NEEDED FOR GROWTH: There is no denying that quality infrastructure is a must to support and push economic growth. The link between growth and infrastructure is inalienable. In simple terms, infrastructure is a physical network of systems that provide services. This includes road, rail and water transport system, port facility, energy and power grids and telecommunication. In the absence of good rail and road network, producers will not be able to send their products to the sea ports for shipment on time. This will negatively affect the export earnings. Shortage of power supply will reduce the production in the factories. This will have negative impact on employment generation. Thus, inadequate infrastructure reduces the opportunity to grow.
The medium-term development plans of Bangladesh have rightly emphasised on investment in infrastructure. 'Building a sound infrastructure' is one of the nine development priorities mentioned in the Perspective Plan 2010-2021. It says: "The efficient and safe movement of people and goods needs well-built efficiently operated and maintained physical infrastructure and transportation systems, along with reliable and affordable supplies of water, electricity and power, telecommunications, postal and waste management services. In addition to well-planned urbanisation, attention will be given to multi-modal transport, integration of roads and highways, railways, water transport, rural transport and airports. Railways will receive much higher attention as a means of passenger and goods transportation throughout the country."
Bangladesh is moving ahead with an average annual growth rate over 6.0 per cent for a decade and more. While consistent growth is a reflection of vibrancy of an economy, higher growth is the ultimate outcome of continuous and wider economic activities. There is also a target to push the growth rate to at least 9.0 per cent by the end of 2021. To achieve the target, adequate infrastructure is a must.
According to the World Bank (2013) estimate, Bangladesh needs to invest US$74 to US$100 billion in infrastructure until 2020. In terms of GDP (gross domestic product), if infrastructure investments are spread evenly over the years, Bangladesh needs to invest between 7.4 to 10 per cent per year. Currently, the ratio is around 6.0 per cent.
Now, to fill up the gap of investment in infrastructure, a series of projects has been undertaken by the government. It is alleged that some of the projects are not well-planned and pose risks for future, there are some bad or wrong investments and in some cases over-investments.
FITTING IN RAJAN'S TEMPLATE: Dr Raghuram Rajan, Governor of the Reserve Bank of India (RBI), in a public lecture in Dhaka in June last year, stressed on the importance of investment in infrastructure. He said, "Emerging markets have a clear need for infrastructure investment, as well as growing populations that can be a source of final demand." At the same time, he sounded a note of caution and expressed his concern about the danger of over-investment in infrastructure projects.
According to Rajan, "Most emerging markets have large infrastructure investment needs. We still need to understand how to improve project selection and finance - too much public sector involvement results in sloth and rent-seeking, too much private sector involvement leads to risk intolerance and profiteering. Going forward, well-designed public private partnerships, drawing on successful experiences elsewhere, should complement private initiative."
Do the ongoing infrastructure projects in Bangladesh, especially those in Dhaka, fit in the 'template' of Rajan?
Consider the under-construction Moghbazar-Mouchak flyover project. There are two major design flaws, as reported in newspapers. One is that the upward ramps are steeper making it difficult for many vehicles to ascend. Another is the design suitable for left-hand-drive while all vehicles in Bangladesh are right-hand driven.
Neither the implementing agency nor the construction firm acknowledges the flaws and the work is going ahead with cost escalation and time extension. Few days ago, the government extended the deadline of construction by one and half years. Thus, it will ultimately take six and half years to complete if the extended deadline is maintained. The increase in project cost by around 58 per cent is both a kind of rent-seeking and profiteering. Finally, the outcome will be flawed infrastructure at the expense of huge public money.
STRUCTURE INDEED: The spree of constructing infrastructure projects in the name of development is not new in the country. Seven years ago, a leading vernacular daily published a special issue on the large number of incomplete bridges in the country. The report revealed that several hundreds of incomplete bridges and culverts were standing non-functional across the country. None of these were usable due to lack of link roads, incomplete construction and wrong locations. The report also pointed out that most of the bridges and culverts were planned according to the wishes of local Members of Parliament (MPs) and influential political leaders. As the size of the economy is growing, so is the number of such structures across the country.
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