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Rule by contract

Rule by contract

RECENTLY, an opposition leader in the Sindh Assembly strongly criticised the provincial government for the alleged transfer of parks’ management to multinational firms. He thought this task could have been handled by the relevant local government department.

But it is unfair to blame the Sindh government alone for attempting to contract out essential services, considering this is a decades-old trend that is rapidly consolidating in all the provinces and the centre. Whether cleaning drains, repairing infrastructure, tending to green belts, initiating ordinary bus services or managing tertiary care hospitals, efforts are made to contract the work out. Work that was once done by departments is now given to contractors, despite thousands still on their payrolls.

After surrendering to the dictates of donor agencies, the governments buckled and agreed to reduce public-sector controls and increase private-sector participation. Downsizing poorly performing departments, enhancing the role of private-sector enterprises, privatising financially bleeding corporations, and outsourcing key services and privileged areas of work were some key conditionalities that emerged from the prescriptions of international financial institutions.




While democratic dispensations always wanted to extend direct benefits and subsidies to their respective vote banks and extended constituencies, this arm-twisting eventually created obstacles to such populist practices. It was generally believed that the private sector would be more cost-effective and efficient for various development, maintenance and governance tasks. However, this has not always been the case.

Since devolution, money supplied to the provinces has increased considerably. Governments began contracting bundles of tasks out to private enterprises in order to draw performance credit from gimmicks. The Lahore BRT was built for a hefty Rs30 billion, with huge input from private-sector consultants and contractors at the construction and operation stages. Since its inauguration in February 2013, it has incurred a subsidy burden of over Rs1.5bn.

Despite tall claims of improving transport, many locations still suffer from poor-quality and high-cost commutes. The BRT benefited contractors and consultants, and perhaps the government, but not the millions of Lahoris away from its alignment. In locations where law and order conditions are not conducive for ordinary operators, many military outfits bag choice contracts.

The rulers-consultants-contractors nexus functions through an interesting equation. Several of the ruling elite either own consulting or contracting enterprises or possess business links with them. Influential consultants identify areas of interventions which can be transformed into contracted projects. Thus, most essential public functions are processed into cleverly crafted projects. Whether de-silting irrigation canals, or development and transport planning, contractual arrangements supersede routine departmental oversights, which were the norm two decades ago.

Amusingly, two master plans for Karachi were made by KDA during the 1970s and 1980s. For a much larger city in the 1990s, a consortium of private firms was, instead, awarded this crucial task. One now finds that planning is packaged and floated as a procurement exercise.

Pakistan Railways, which inherited and developed many manufacturing capabilities, prefers to import locomotives from a friendly country, many of which are routinely found defective! The assumption, that contracting essential functions out reduces administrative costs and manpower, is proven wrong.

It is common sense that private-sector activities must be routinely monitored by regulatory bodies.

For instance, Article 9 of the Constitution assures life and liberty to all citizens. Access to safe drinking water is an essential need in this respect. Given that the supply of public drinking water is completely unreliable, there is a mushroom growth of private bottled-water suppliers and other types of vendors. Many are engaged in illegal practices such as stealing water from municipal networks. No urban or regional regulatory authority exists to regulate the costs and prices, or even health standards. While large-scale transport projects abound in almost every major city, regulatory authorities are either absent or created as an afterthought, without ensuring equilibrium among stakeholders.

One must learn from the capitalist West, from where private contracting traditions have been imported. Strict, impartial regulators and potent consumer protection mechanisms safeguard the rights of citizens in many industrially advanced countries. Much importance is assigned to the quality of service, public interest and value for money — especially around public resources. Certain functions, such as monitoring, evaluation, planning, development control and setting maintenance priorities are still done by departments. The pyramids along the Nile may not have lasted had they been constructed by contractors.

The writer is chairman, Department of Architecture & Planning, NED University, Karachi.

Published in Dawn December 11th, 2016

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