Expert cautions on core sector project delays

February 20, 2013 - 1:04:09 am



Dr Rupert Booth, Senior Economist at ATKINS, addressing audience on the last day of Qatar Projects 2013 conference. Kammutty V P

BY MOHAMMAD SHOEB

DOHA: Slow economic growth, disruption of LNG transport and further intensification of euro crisis may have potential impact on mega-infrastructure projects. Any delays or inadequate execution of the investment programmes may “entail significant reputational risk for Qatar”, Dr Rupert Booth, Senior Economist at ATKINS, said yesterday. 

“Delays and inadequate execution of the investment programme entail significant reputational risk for Qatar,” said Dr Booth during his presentation. He added that setting up an integrated public investment management programme would reduce these risks, and the passage of the draft public procurement law can bring efficiency gains. 

Dr Booth, while analysing the direct and indirect causes of risks to infrastructure projects, on the Second Day of ‘Qatar Project 2013’ conference which concluded here yesterday discussed the various factors that can have potential impact on infrastructure investment programmes. 

Booth, who is working as Associate Director at ATKINS, Middle East, also discussed the relevance of the latest IMF documents including IMP Report to Qatar’s project market with reference to Public Private Partnership and public procurement. He also emphasized on the need for budgeting, contingency planning for key risks and plans to contain expenditure.  

While discussing the various risk assessment matrix, he registered four kinds of risks that can have negative impact (direct and indirect) on infrastructure projects.  “Risks related to infrastructure investments are direct in nature. While slow economic growth in Europe and emerging markets such as China and India, and disruption of LNG transport would affect funding resources available for Qatar’s large infrastructure programme,” he added. 

He further added that intensification of euro crisis and drying up of liquidity may also have negative impact on financing, possibly necessitating adjustment to and/or downscaling of investment in the projects.  He said that currently there are coordination mechanisms in some sectors, but there is “no comprehensive public investment management system in place” to provide procedures for project selection, appraisal and monitoring which could result in cost overruns and delays.

Under his recommends he reiterated about need for the establishment of an integrated public investment management process to manage scrutiny, selection, delivery and funding of major capital projects. He suggested that re-profiling exercise in the transportation sector will mitigate potential construction bottlenecks and wider congestion stresses. 

On procurement issue, incase of a sustained fall in the prices of hydrocarbons, he recommended to implement the capital projects through public private partnership basis, instead of financing through budget.  To enhance the predictability of spending decisions he suggested introducing Medium Term Budgeting Framework. However, Booth appreciated Qatar’s efforts towards deepening domestic credit market, saying: “Current efforts to develop local debt markets are commendable and will enhance options for domestic financing and reduce reliance on foreign funding.”  

The Peninsula

 
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