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UncategorizedUnheeded snags behind mega projects

Unheeded snags behind mega projects

All developmental projects – like the massive ones in Ethiopia – should consider all economic, societal, political, cultural, psychological and religious values if the desired developmental goals are to be met on time, writes Asseged Gebremedhin.

Whenever people think about development, they usually stick to development in terms of money or economic value.  However, development is not only economic but also social and psychological. These factors – in some projects – constitute more than 50 percent of the total value.

In some projects key performance indicators (KPI) emanate out of the non-economic ones.

Nowadays, in many countries modern projects do not come to the approval table without adequately assessing the impacts projects could have on the social, psychological, political, religious and other soft values of the community.

From a global and practical point of view, it is very difficult to find an excellent mega project completed without compromising those parameters. Human beings are endlessly fighting over mega projects to the best of their benefits, and sacrifice themselves in the process. So, should compromising identified values of the community be accepted?  Or is there other option that boosts every value equally? Who is responsible for generating optimal mix of financial and non-financial values (i.e. intrinsic and credence values of the community)?

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The utilitarian approach of growth implies that for the greater majority the loss incurred by minorities is deemed to be normal. Though minorities are compensated for their loss, loopholes in the utilitarian approaches could eventually have lasting negative impacts on social, psychological, political and religious values.

Mega projects – by their very nature – are enormous and bring about a broader impact on the livelihoods of the community in question. But if all values of the community are not properly addressed then the outcome will be dismal.

It goes without saying that Ethiopia is undergoing perpetual economic growth and development and part of that growth narrative are the extensive mega projects. However, the fact on the ground shows that there are gross loopholes in the implementation of addressing every parameter.

Multibillion birr investments in road infrastructural development are underway in every region of the country. The country is heading to be East Africa’s economic and political hub. However, these projects are being are undertaken in the community that is closely intertwined with social values.

Strange as it may seem, some projects deliberately omit these values to reduce the cost of the project. It is done at the expense of the communities. Compromised community values eventually surface out and the hidden cost sometimes is about 25 percent of the overall project. For instance, that is why we do not see properly constructed sidewalks, working escalators for passengers of the Addis Ababa Light Rail, and green areas in condominiums.

A case is point is the housing project in Addis Ababa. This mega project, which commenced over a decade ago, is yet to meet the ever growing demand. Home seekers are psychologically defeated because the project is not progressing well. It is a clear manifestation of failing to address psychological values.

When people move to newly constructed neighborhoods, they sacrifice their social integration, customs, and rituals. However, both community psychologists and social and industrial psychologist argue that any development is to the people and from the people. If all things are considered before approval and implementation, the social fabric will be intact.

Another case in point is the Grand Ethiopian Renaissance Dam. All Ethiopians support the project because economic, political, religious, social and psychological values are addressed to a large extent. However, it is difficult to say the same when it comes to other mega projects – sugar development projects, fertilizer plants projects, commercial farming, and road projects in Addis Ababa. It seems that experts missed these variables at the time of forwarding their professional opinion on these development projects. Adding insult to injury, the situation will be more complicated when corruption is involved.

So, the question remains, who is responsible? Is it the government – local and/or federal?

True to form, the government takes a fair share of the blame, but all stakeholders are to blame. Disregarding these values has serious negative effects on nations building. They are intrinsically incarnated with the overall value system the country.

All developmental projects – like the massive ones in Ethiopia – should consider all economic, societal, political, cultural, psychological and religious values if the desired developmental goals are to be met on time. To grow as a nation, the role of an individual should not be overriding the interests of the public. So, the role of the individual and the government at large should be balancing these values.

Unsurprisingly, society is dynamic and highly demanding and it could be difficult to cope up with the ever shifting dynamism. I totally agree with this. However, a demanding society, demands all values to be incorporated, with economic values being at the forefront. It is true that we are social animals that are rational consumers. In that regard, the role of psychological values is an important one and experts should seriously look into it. By the same token, those in the financial services sector should also be vanguards of these intrinsic values. Insurers and bankers should be precursors since they are eventually going to be part of both the failure and success of these projects.

For instance, if we look at the experience in Britain, Islamic insurance policies are designed and issued to Middle Eastern countries aiming at addressing the values of policyholders by customizing the policies vis-à-vis  religious requirements. Potential policyholders have the right to have such a security and insurers will take religious values as parameters. Just as, another example is interest free banking. It is all about giving prominence to societal, cultural and religious values. That is what should be at the heart of the service.

Time and again, mega projects fail to see the light of day or are completed way behind scheduled with inferior quality, but if a project is from the people, to the people and by the people, it will never fail.  In fact, it will be a great success. If it fails, it fails because of the missing link between these values.

Traditionally, project analysts try to design a system which will facilitate teamwork by dividing up the work and parceling out responsibility for decision-makers, policymakers, regulators and leadership on various levels. However, most of the time, it fails to include all values. In the 21 century, businesses – including state-owned ones – will burgeon if it synchronizes all values in the process.

We are undertaking massive construction projects, but that should not be a short-lived development. If human values are not duly considered, then the development will be short-lived. That is why buildings collapse, bridges are damaged and dams are cracked because they did not properly take into account the values of beneficiaries. But why is it so? Is it corruption? Is it sheer negligence? Are projects adequately and knowledgably evaluated with intensive parameters? Are all stakeholders involved during the planning, approval and implementation stages?  Were they really meant for the people? These questions require serious and clear answers.

It is a proven fact that developed nations seriously ponder on these values before approval and implementation of major projects. They are highly proactive in mitigating strategies to include these values. Their system allows managing abnormalities in grand projects and world class bids. The degree of mess-ups and magnitude of petty, grand and political corruptions is controlled before it actually manifests.

We, as a nation, have experienced failure and tragedies in epic proportions. Good examples are the Dire Dawa flashfloods and the Koshe landfill collapse tragedy. So the question is; how can we avoid incidents of the sort? In my view, every project should incorporate those values if we really want to see a developed Ethiopia and avoid calamities and failures. The banker should not approve a project if it fails to address societal values. By the same token, insurers should abandon any project that is being undertaken without adequately considering the extent of risk and its mitigating factors.

As an insurance expert, I came to realize that risk mitigating factors and measures taken so far were highly traditional and inefficient. Risk management is not a new concept in Ethiopia and has passed through three different regimes with the same mitigating factors. Therefore, it should now be transformed. If our people are we going to die because of another flashfloods like that of Dire Dawa or because of a collapsing landfill like the one in Koshe, then we have failed as a nation.

Ed.’s Note: Asseged Gebremedhin is Acting Deputy CEO of Operations at National Insurance Company of Ethiopia (NICE) SC. The views expressed in this article do not necessarily reflect the views of The Reporter. He can be reached at [email protected].


Contributed by Asseged Gebremedhin


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