Many Projects in Crisis

Many Projects in Crisis

The Finance Ministry says that contractors for just nine projects are asking for Rs. 2.3 billion as compensation. Last year, more than 300 contracts related to 35 big projects were stopped. The Project Management and Monitoring Department (PMMD) of the Finance Ministry says that there might be more claims for compensation for 22 other projects.

According to the PMMD’s recent report, 37 projects didn’t make any physical progress in the last part of 2023. Out of these, 17 projects didn’t get money from foreign sources. And in 41 other projects, work is delayed because the contractors aren’t doing a good job. The report says that since this happens in about 20% of all projects, we should consider how well contractors perform when deciding if they should get hired again.

The PMMD’s latest information comes at the same time as a report from the International Monetary Fund (IMF) that criticizes how Sri Lankan governments have handled big projects in the past.

The IMF points out some common problems in implementing projects, like not getting enough money on time and not acquiring land quickly enough before starting projects.

There are also issues with buying things needed for the projects, not having clear goals and not doing well in contracts. The Ministry of Finance doesn’t have enough basic information about the projects, like how much money they will make and how much it will cost if the projects are stopped early.

The PMMD’s report also says that delays are common, but there isn’t enough evidence to show that the people responsible for managing time in the projects are being held accountable. This means that economic plans based on these projects are not working as expected.

In nearly 100 projects, the time given to finish the work has passed, and in 20 of them, the time has been extended to more than four years. Thirteen projects haven’t even finished 25% of the work, even though more than half of the time for the projects has passed.

For the first time, the PMMD has identified 30 projects with major delays, including the Uma Oya Multipurpose Development Project and the Mahaweli Water Security Investment Programme, which has had to cut back on its plans because it couldn’t finish things on time.

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