Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Doug Porter Musharraf Cyan Panthea Lee Zack Brisson Osione Itegboje Adam Talsma © 2015 International Bank for Reconstruction and Development / The World Bank 1818 H Street NW, Washington, D.C. 20433 Telephone: 202-473-1000; Internet: www.worldbank.org
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Attribution—Please cite the work as follows: Porter, Doug, Musharraf Cyan, Panthea Lee, Zack Brisson, Osione Itegboje, and Adam Talsma. Infrastructure Development in Edo State. 2015. Washington, D.C.: World Bank © World Bank. License: Creative Commons Attribution CC BY 3.0
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All queries on rights and licenses should be addressed to the Office of the Publisher, The World Bank, 1818 H Street NW, Washington, D.C. 20433, USA; fax: 202-522-2625; e-mail:[email protected]. Table of Contents
1 Introduction 6 Acronym List 7 Acknowledgements 8 Road Infrastructure Spending at a Glance 12 Capital Spending in a Challenging Context 20 Responding to the Challenges of Context: Mobilizing Strategic, Technical, and Financial Assets 24 The Project Management Cycle at Work in Edo 40 Conclusion and Proposals
Infrastructure Development in Edo State i ii Introduction
Governor Adams Oshiomhole assumed Soon after Oshiomhole came to power, office in November 2008 following a the World Bank announced it would successful court appeal to retrieve the use every instrument available to help mandate given to him by the people of consolidate an Amnesty agreement in Edo. Widespread support from a variety 2009 in the oil-rich Niger Delta. While of interest groups buttressed the legal Edo State is not one of the core oil states, challenge and helped create the political reflecting an undeclared policy of sup- space for the Governor’s pursuit of an porting reformers, the Bank decided that agenda focused on both reform and Edo would be one of four states around speedy delivery. Popular demand for re- which it would focus its engagement. form was evident, but responding to this Across the four states of Edo, Rivers, presented major challenges. Historically, Bayelsa and Delta there would be a youth Edo had been one of the best performing training and public works employment states in the country. Expectations were program, measures to extend and deepen high that he would restore this status successful nation-wide CDD programs and address the perceived poor perfor- and assistance with ongoing PFM re- mance and allegations of corruption forms. On the strength of the Governor’s leveled against previous administrations. reform commitments, Edo seemed a special case, warranting more – thus Edo This process saw a shift begin in the became one of only two states in Nigeria nature of Oshiomhole’s relationship to be offered budget support, in the with the State’s polity - a shift from form of a Development Policy Credit. more traditional patron-based collective bargaining towards a kind of popular, The Bank was aware that these measures constituency-based politics that is less fa- might help restore some confidence, but miliar in Nigeria. The Governor was no that more would be required. By June doubt aware of the imperative to respond 2010, a Public Expenditure Management decisively, to send credible signals that a and Financial Accountability Review new regime would deliver to this grow- had underscored the urgent need for, in ing support base and the need to balance the language of the WDR 2011, across commitments to ‘good governance’ the board “institutional transforma- with a new form of social accountability tion”1, and championed a ‘Public Finance that was based on results and delivery Reform Action Plan’, from revenue of campaign commitments. This would administration through planning and not be easy. Edo State was plagued budgeting, to procurement, expenditure by very high youth unemployment, and audit control systems. But while the devastated public assets and services, Governor was an enthusiastic supporter and the legacy of violence and conflict. of what became a complex of economic Per capita income stood at only $327, governance, PFM and service delivery around a quarter of the national average. reforms he would surely have known that it would be some years before ventures delivered on-the-ground results.
Infrastructure Development in Edo State 1 Edo’s story perhaps has relevance for This case study is an attempt to better studied in depth along dimensions other states and other country teams. It understand the process through which common to public expenditure analyses: is not one of a reform minded Governor the Administration was able to maximize (i) integrity of project appraisal and ap- ultimately being stymied by political its delivery. This report is one product proval; (ii) efficiency of procurement and instability or hostaged by a fragmented, of several ongoing efforts by the World contract management; (iii) effectiveness incapable administration, or by the Bank to better understand how to better of implementation and monitoring; (iv) process of designing and making aid tailor its interventions to local reali- timeliness of flow of funds and pay- projects effective. It is a complicated ties with the overarching objective of ments; and (v) effectiveness of redress story: one that provides insight into improving its impact. To do this in the and community oversight. Engineering how some forms of reformist leadership case of capital spending in Edo, it was assessments were also conducted to might improve performance in Nigeria. necessary to craft a study method that determine the quality, durability, and Indeed, elections in 2012 returned suspended judgments about actual prac- usability of these assets (see figure 4.3). the Governor for a second term with tices. Thus, rather than holding these an increased majority in an election practices up to international standards, The outcome is a portrait of how both regarded as relatively free and fair. and highlighting deficits and shortcom- formal and informal institutions were Oshiomhole’s electoral success in 2012 is ings in relation to those standards, the applied to manage public finances in widely attributed to his ability to deliver study purpose was to depict how the light of the operational constraints tangible results, particularly his efforts State administration had responded found in Edo’s political economy. The to ramp up capital spending, especially to the political priorities of the new results show how the behavior of these around roads and civil infrastructure, Governor by adapting to the constraints institutions impacted the speed, cost, classrooms and clinics. Indications are it faced and creating new ways to deliver completion, and quality of road as- that annual spending on roads tripled through infrastructure spending. sets ultimately delivered. At the same in the first year of office, and had time, the approach clearly reveals a quadrupled again three years later, to This prompted use of a research meth- dynamic process in which Edo officials about NGN40.86 billion in 2012. odology that emphasized understanding continually adapt on the basis of les- of capabilities as well as deficits, which sons learned – about both the benefits That the Governor seized on capital surely exist, in the existing system.2 This and risks of the approaches taken. spending to consolidate his power is not resulted in a mixed methods approach unusual: governments in contexts the that blended instruments of public In September 2013, following extensive international community describes as economics and applied ethnography review at the technical, working level, “fragile and conflicted” typically focus – dubbed by the team, a ‘fiscal ethnog- the study findings were tabled as part of on the most discretionary resources to raphy’. The aim was to understand the high-level consultations between officials deliver assets that have high public vis- modalities that were created to govern from Edo State and the World Bank.3 ibility and thus political value. Capital the interaction among different actors, The case shows how this Administration spending is often also a good way to buy including state executives and adminis- has brought together a complex set the allegiance of powerful political forces trators; private sector consultants, con- of systems, procedures, norms, and in the contractor community. But as tractors, and banks; and different leaders capabilities to raise and invest finances often, these efforts only see money disap- and groups in communities affected to deliver quality public infrastructure. pearing into the sand. Yet in Edo, a cred- by road projects. The case is based on a The evidence presented here shows that ible engineering evaluation conducted study of all 43 road construction con- the Oshiomhole Administration has as part of this study showed that 85% tracts executed between 2008 and 2013. created a functional, if unorthodox, of 43 road contracts, around 450kms of Each year, these road contracts account- system to manage public finances. roads, had been completed, and that in ed for 47% to 70% of Edo’s total capital Consistent with experience elsewhere, the majority of cases, roads and ancil- spending. To corroborate and deepen it is evident that this system performs lary public assets had been produced at this knowledge, ten of these projects— well in some respects, but unevenly surprisingly high standards of quality. representative of the full range—were in it’s ability to overcome all of the
2 Introduction Infrastructure Development in Edo State 3 contextual constraints and risks bearing engagements in Nigeria,5 finds that are wisely sequenced, particularly in on the effective use of public funds. traditional blue print approaches in such reformist states, so as to provide the best In the Edo case, this system is clearly circumstances are unlikely to work and environment for the Bank to leverage capable of optimizing a number of that sequencing, tailoring to local con- its support? Second, how can the Bank economic, social, and political objec- texts and adaptation along a non-linear balance the desire of credible local tives while navigating an extraordinarily road to reform is more feasible path. leaders’ with the need to ensure good challenging operating environment. governance and minimal standards? Institutionalizing the positive features This study was, in the first instance, de- Beyond the Nigeria Country Team, in of, and dealing with the risks exposed signed to inform the activities supported international development circles, there by, the approach taken to spending on by the Niger Delta Social Accountability is now a vigorous debate taking place on roads infrastructure will be a challenge. (NDSA) project financed through a precisely these issues and it is also hoped component of a Global Partnership that the case of capital spending will It is too early to know with any certainty Facility grant to Nigeria. The NDSA also provide some specifics and insights. the future trajectory. In some ways, was originally conceived as providing this case shows elements of a ‘success- complementary support to the World This report begins with a summary of ful transition’ story: one where political Bank’s lending portfolio in relation to spending on road and drainage in- leadership was able to garner sufficient enhancing public access and engagement frastructure in Edo State since 2009. political autonomy to send ‘credible around public policy through social Section 2.0 (“Capital Spending in a signals’ of change, and cobble together accountability. As an adaptive learning Challenging Context”) frames the executive capabilities so as to overcome grant, the NDSA was piloted in both State’s capital spending through a the constraints posed by a dysfunctional Edo and Rivers States and the differences discussion of the political demands and civil service who’s loyalties are uncertain, between the states are in themselves opportunities to which the Oshiomhole and donor partners who commit but are noteworthy. It is interesting to note that Administration has responded, as well as constrained in terms of rapid delivery.4 in both contexts, donors’ traditional the fiscal reality and systemic challenges Delivery in such contexts is never likely concept of social accountability—based that prompted the development of new to be easy or conform to international on a sharp distinction between demand arrangements to handle capital spending. good governance standards but it is of and supply side actors and prescribed The capabilities of these arrangements, primary concern if citizens, in new de- methodologies—was quickly rendered including the special purpose agen- mocracies like Edo, are to begin to trust inapplicable. In the case of Edo the cies and procedures created, are then their public institutions and deepen, work stream evolved into one of helping highlighted in section 3.0. “Responding rather than reject, the path towards a reformist leadership to deepen a social to the Challenges of Context: mobilizing democracy. The question for institu- contract, based on an electoral mandate, strategic, technical and financial assets”. tions like the World Bank is how best to into a legacy of delivery, while attempt- Section 4.0 (“The Project Management support such cases in ways that do not ing to improve at the same time, the in- Cycle at Work in Edo”) surveys how hamstring local leadership and credibil- stitutional weaknesses which it inherited. these arrangements are applied at ity or the desire to deliver while, at the different stages in the project manage- same time, helping leaders to maximize The subsequent discussions around this ment cycle, from project identifica- the value of scarce public resources and report will be important for the Bank’s tion, budgeting, design, and costing, learn from other international experi- engagement in Edo. The discussion through procurement and contracting, ences. This case study underlines the around this case has also proven to be to supervision and eventual completion very rich and often messy reality that highly relevant for the World Bank of a contract. The final section concludes leaders frequently find when assuming Nigeria Country Team’s thinking on and records areas discussed during this office and the trade-offs that they are two challenging sets of questions as it study process for further strengthening forced to make. In doing so, it reminds prepared its Country Program Strategy. of the institutional capacities to support us of the political realities within which First, what kinds of prior knowledge delivery of the current Administration’s we work and, like other case studies is needed of ‘how systems actually near-term development priorities. recently undertaken to inform Bank work’ so as to ensure that engagements
4 Introduction Infrastructure Development in Edo State 5 Acronym List
ACN Action Congress of Nigeria MoF Ministry of Finance APG Advance Payment Guarantee MoHUD Ministry of Housing and BEME Bill of Engineering Urban Development Measurement and Evaluation MoLS Ministry of Lands and Survey BIR Board of Internal Revenue MoW Ministry of Works BPP Bureau of Public Procurement NDCBP Niger Delta Citizens and CDA Community Development Budget Platform Association NDDC Niger Delta Development Commission CLO Community Liaison Officer NDSA Niger Delta Social Accountability CONGO Conference on NGOs NEWMAP Nigeria Erosion and Watershed COREN Council for the Regulation Management Project of Engineering NGO Nongovernmental Organization CSO Civil Society Organization NGN Nigerian Naira DICT Directorate of Information & NSE Nigerian Society of Engineers Communication Technology PEMFAR Public Expenditure Management and EST Economic and Strategy Team Financial Accountability Review FERMA Federal Roads PDP People’s Democratic Party Maintenance Agency PFM Public Financial Management GIS Geographic Information Systems RRA Rapid Response Agency FGPMO Fiscal Governance & Project SEEFOR State Employment and Monitoring Office (aka Expenditure for Results “Due Process Office”) SHA State House of Assembly LGA Local Government Area SA Special Advisor MDA Ministries, Departments, and Agencies (of Government) SIFMIS State Integrated Financial Management Information Systems MoBEP Ministry of Budget and Economic Planning SSA Senior Special Assistant MoEnv Ministry of Environment SSG Secretary to the State Government and Public Utilities STB State Tenders Board
6 Acknowledgements
The report was written by Doug Porter, Musharraf Cyan, Panthea Lee, and Zack Brisson, with contributions from a team comprising Dave Algoso, Katherine Bain, Osione Itegboje, Adam Talsma, Angela Ogbu, Nonso Jideofor, Sebastian Kpalap, Sam Ajufoh, and Ken Henshaw. Adam Parker, Jennifer Thibault, and Faaria Volinski provided graphic design and production support. The Task Team Leader was Caroline Sage (Senior Social Development Specialist, AFTCS) and subsequently Katherine Bain (Global Governance Practice). The team benefitted greatly from advice received from the Governor, Adams Oshiomhole, and Godwin Obaseki and Joseph Eboigbe, along with other members of the Edo State Economic and Strategy Team. Review comments were received from Renaud Seligmann, Joel Turkewitz, Helene Granvoinnet, Michael Woolcock, Anand Rajaram and Tobias Haque, all from the World Bank, and Matt Andrews from Harvard University. The authors acknowledge the tireless efforts of Katherine Bain to see this report published, and additional advice by Marie-Francoise Marie-Nelly, Indira Konjhodzic, Jens Kristensen, Gloria Joseph-Raji, Zahid Hasnain, Ismaila Ceesay, and Bayo Awosemusi.
Infrastructure Development in Edo State 7 1.0 Road Infrastructure Spending at a Glance
Between 2009 and 2012, the Average contract price is valued at Oshiomhole Administration contracted NGN2.2 billion, and ranged from more than 450km of roads across 43 NGN34.5 million to NGN7.7 bil- contracts, all with a significant drain- lion. Of the total value of contracts, age component and many with other 13.8% (or NGN15 billion) resulted furnishings like street lights. These from revisions to initial contract sums. contracts total NGN108.8 billion in End-of-project values were, on aver- value. The bulk of these contracts were age, 17% higher than initial contract commissioned in collaboration between values, due to a range of factors that are the Ministry of Works (MoW) and the explored more fully in this report. Unit Ministry of Environment (MoE) in two costs averaged NGN363.5 million per batches: one in December 2009 and km, but ranged from NGN89.2 million another in October 2011. These batches per km to NGN2.7 billion per km. accounted for approximately 43% and 29%, respectively, of total spending in the 2009-12 period, which encom- passed the Administration’s first term.
Figure 1.1 Contract Sums in Billions of Naira:
N5B
N4B December 2009 October 2011 N3B Signifies the time when Indicates a second round of the current system was contract commitments ahead of N2B brought into its initial form. the July 2012 elections.
N1B
0 2009 2010 2011
8 Figure 1.2 Contract Value and Cost per Kilometer of all 43 contracts between 2009 and 2012
Average Contract Value: 2.2 Billion Naira
Average Cost per KM: Note: Contract values vary 363.5 Million Naira based on road length, design specifications, and revisions to work scope.
0 N 1B N 2B N 3B N 4B N5B N 6B N 7B N 8B
Infrastructure Development in Edo State 9 The current Administration increased increased by an average of 20% annu- capital spending on road construction ally from 2009–12; and (iv) Edo State alone to NGN16.2 billion in 2012. The raised finances by floating infrastruc- State’s overall budget profile clearly ture bonds worth NGN25 billion. demonstrates the priority given to the road sector: road construction alloca- Under the Governor’s close direction, tions increased from 14% to 20% methods for rapid delivery of qual- of total spending between 2008 and ity road infrastructure have also been 2012. In the previous Administration, created. By the time of this study, 85% for example, allocations for the en- of the 450km of contracted roads had tire transport sector ranged from been completed. Site inspections and NGN4.4 billion in 2005 to NGN7.1 engineering tests on ten case study billion in the election year of 2008. contracts showed that this new in- frastructure matched quantity with The current Administration created the adequate quality (see figure 4.3). At fiscal space for this increase in capital least six of the ten road sites examined spending in four ways: (i) recurrent through engineering tests were at par or budgets were reduced and the capi- above any reasonable standards of road tal share of annual budgets increased quality in the Niger Delta. Walkways, from 42% in 2007 to 58% in 2012; a feature of this Administration’s road (ii) revenue from federal transfer pay- projects—and of public appreciation— ments increased by 9%; (iii) the State’s were of especially adequate quality. internally generated revenue (IGR)
10 Road Infrastructure Spending at a Glance Figure 1.3 contractors were involved with Market Structure of Public road projects from 2009–12. 14 The small size of the road Sector Road Construction contract market allows for greater oversight of contractor performance.
kilometers of road were 451 built in the period studied.
0% of market share is controlled 49% by 2 contractors, whom the 15% administration trusts to deliver good quality roads.
5% 34% 5% 13% Contractor’s Percentage 9% 100% of Total Market Share
12%
As this report documents, these delivery This combination of political and methods are not without risks and chal- administrative methods created direct lenges, but they have proven capable of personalized relationships between the performing effectively in Edo State’s po- Oshiomhole Administration and each of litical, social, and cultural environments. the five major contractors responsible for These methods, explained in further 83% of the value of projects under way. detail below, include: (i) centralizing aspects of project selection, budgeting, and fiscal management within a specially created Economic Strategy Team, as well as leveraging executive power to overcome constraints in the project cycle; (ii) harnessing the private sector to enhance the capacity and expertise of the MoW; (iii) orienting project procedures to deliver rapid results; (iv) accommodat- ing existing informal systems of social settlements; and (v) engaging banks to address cash flow issues for both the gov- ernment and implementing contractors.
Infrastructure Development in Edo State 11 12 2.0 Capital Spending in a Challenging Context
“Movement within our cities and across the State will be progressively made less hazardous through the provision and maintenance of good road networks. Particular attention will be paid to the quality of our environment including erosion and flood control, pollution, and garbage disposal. […] We will accelerate the installation of enduring infrastructure which will support rapid industrialization of our State and provide massive employment opportunities.”
—Edo State Governor Adams Oshiomhole November 2008 inauguration speech
Under the Oshiomhole Administration, Edo State has developed project cycle management systems that engineering studies conclude are capable of creating adequate quality public infrastructure. To understand the rationale for and outcomes of these systems, it is useful first to set the scene by explaining some challenges and constraints of the context to which these systems aimed to respond.
Infrastructure Development in Edo State 13 A History of Neglect, and High Expectations
The current administration assumed office in November 2008 following a successful court appeal. The ruling over- turned the results of an election in 2007 that had declared the ruling People’s Democratic Party (PDP) candidate the winner. Widespread support from a variety of interest groups buttressed the legal challenge and helped create the political space for the Governor’s pursuit of an agenda that highlighted both reform and delivery. Popular demand for reform was evident, but responding to this presented major challenges. The new administration inherited a constrained fiscal outlook, a decayed and underper- forming Edo State bureaucracy that had limited capacity to respond, one marked by a mix of formal and informal systems and procedures, and widespread percep- tions that public finances could be used to benefit an elite few, rather than for public benefit. In a real sense, the new administration innovated by opportunis- tically working around the bureaucratic hurdles, while creating new arrange- ments to prioritize delivery at the same time recognizing that these arrange- ments would also pose risks that would need, subsequently, to be dealt with.
14 Capital Spending in a Challenging Context To demonstrate near-term results it is To achieve these results, the Governor no surprise that infrastructure im- and his administration confronted provements surfaced as an obvious and several immediate challenges. As sum- immediate policy priority. Compared marized below, these included serious with the time-consuming and com- fiscal constraints; the depleted capacity plex processes needed to reform social of the Ministry of Works and other services or modernize an economy, road relevant MDAs to execute the works; a projects offer a way to concentrate avail- local contractor community unused to able resources on comparatively quick rapidly delivering quality assets; and an and certain results. Road spending is a institutional environment in which a highly visible and widely popular use range of informal systems were layered of public resources capable of deliver- over, and were often at odds with what ing political dividends, generating jobs, laws and regulations formally required. directly and by facilitating commercial activity and private sector investment.
Navigating Fiscal Constraints
To achieve its vision, the Oshiomhole The State sought to expand its fiscal flex- Administration needed to maneuver ibility by reducing recurrent spending, within a highly constrained fiscal increasing revenue collection, and ob- environment. Capital spending in Edo, taining significant debt financing. Over as in other Nigerian states, occurs in the period 2008-2013, revenue from fed- the context of an evolving federal fiscal eral transfer payments remained static, structure, high dependence on oil rev- increasing by an annual average of 6% enue and increasing political competi- in nominal terms. On the other hand, tion, particularly at the state level. the State Board of Internal Revenue managed a successful and ongoing push Although the Administration was to increase revenue collection. In real generally aware of the constraints in terms, from 2008-12, internal revenue this fiscal environment, the scale and collections increased by an average of scope of the challenges were dramatic. 20% annually, including a 72% increase One result was that revenue forecast- from NGN4.8 billion in 2008 to ing proved to be unreliable. Between NGN8.22 billion in 2009. These gains 2008 and 2012, expected revenues were reinforced by imposition of a new were short of forecasted estimates by an consumption tax in July 2011 under the average of 46% each year. Shortfalls in Hotels and Events Centers Occupancy internally generated revenue were, on and Restaurants Consumption Tax Law. average, 49%; in federal statutory alloca- Anecdotal evidence also attributes the tions, shortfalls averaged 45%. During IGR increase in part to increased tax the same period, the average annual compliance by high-income taxpay- budget deficit was approximately 34%. ers and local businesses, as well as the back tax assessment drive, at the behest of the Administration’s supporters.
Infrastructure Development in Edo State 15 The Administration also borrowed to space was also achieved by engaging increase fiscal flexibility for increased technical expertise from the private capital spending. In 2010, the State sector. This talent is most visibly floated a 7-year, 14% coupon bond, resident in the State’s EST, but it is worth NGN25 billion. Domestic loans also spread throughout MDAs relevant were procured to jump start the State’s to the management of public finances. investment in infrastructure by deploy- Working in a coordinated manner, ing the net proceeds of the bond in this team of expert financial manag- infrastructure. Given the State’s revenue ers designed and implemented annual outlook, this debt was critical to spread spending plans and cash management costs over an extended time horizon procedures. Whilst not always ideal in and pursue near-term public benefits. managing accumulated liabilities, these procedures were sufficiently flexible to To an important degree, as will be respond to revenue shortfalls while still explained in the next section, fiscal delivering on priority public investments.
An Environment of Informality
Road building is an intensive activity agree on the need, nature, and scope that requires processing capabilities to be of project revisions prior to submitting concentrated centrally and deployed at the proposal revisions for approval. multiple sites. Effective implementation Project revisions are recorded sporadi- requires the ability to align compli- cally in project files, and documenta- cated sets of actors and capabilities, tion overall is quite loose. Nonetheless, while simultaneously managing fiscal documentation is required before and institutional constraints like those payments can be made to contractors. outlined above. Edo State is similar to other states in the Delta region in In Edo, as elsewhere in Nigeria, business that the formal systems, regulations, practices vary greatly in their use of in- and processes provide limited support formation technology, and the way stan- in addressing the administrative and dardized documentation and routinized procedural challenges that occur during workflows are observed in practice. And the project cycle. Perhaps unsurpris- given the social context, loose adherence ingly, these formal systems therefore to formal process is not typically con- carry limited force in shaping the actual tested by the public or other organized arrangements and practices utilized groups. In the event of disputes between to deliver public infrastructure. actors involved in road projects, resolu- tions occur mostly through informal As a result, elements of formal pro- negotiations. Recourse through legal cesses and mechanisms are often procedures or contract enforcement employed only to document decisions mechanisms occurs only in exceptional made through informal channels. For cases. In other words, reliance on formal example, contractors and government procedures alone would be unlikely to officials working on a road project may expedite the delivery of quality public
16 Capital Spending in a Challenging Context assets. Thus, during its first term in office, the new Administration decided that formal procedures would need to be blended and aligned with existing norms to expedite, dictate, or enforce imple- mentation efforts. As will be noted in later sections, this has interesting impli- cations for donor efforts, such as through the Niger Delta Social Accountability project, to support the observance of formal systems of accountability, the separation of powers and rule of law.
In these circumstances, rather than attempting to discipline the systems for public spending into compliance with formal regulations and processes, the Administration created arrangements that blended formal with informal modes of operation. How this worked at different stages in the process of manag- ing road projects will be explained in the next two sections. But two key features of the hybrid modalities for capital spending included the direct interven- tion of the Governor in specific projects and the consolidation of administrative power across all road projects. For the former, this included periodic, in-person visits to road project sites to ensure satis- factory processes and outcomes. For the latter, this included establishing central- ized processing of contractor payments. Contract revisions and withholding or releasing payments, for instance, have proven to be useful mechanisms to mo- tivate actors to deliver desired outcomes given a working environment where formalized contracts, specifications, timelines, and other project require- ments have limited disciplinary effect. At the same time, the Administration was aware that whilst these kinds of ar- rangements suited the circumstances and relatively small volume of works, they would be unlikely to deliver the same results for spending in other sectors, or for a larger total portfolio of investments.
Infrastructure Development in Edo State 17 Case 1: Overcoming Past Neglect to Deliver Roads for Edo’s Future
Upon taking office, this administration sought to reverse a history of under-investment, poor performance, and public skepticism. Accounts of the Administration’s early road projects illustrate both the difficulties the young Administration faced in seeking to improve road infrastructure, and how it overcame these challenges.
A Portrait of Underinvestment and Neglect
Since 2007, flood damage had rendered thus access to the Ihevbe-Ogbe area had Benin City’s 2nd West Circular Road been restricted for over a decade. This largely inaccessible. Cars often took impaired the economic welfare of com- detours around it, residents along the munities in the area, and hindered access 1.97km road faced trouble reaching their to the lively Agor trading market and homes, and pedestrians were often seen the region’s valuable limestone deposits. wading through water to cross the road. The poor state of the road also hampered Upon taking office, the Governor access to Siloku and Textile Mill Roads, prioritized repairs on both roads. In both connections to major markets, October 2009, a NGN329 million thus impeding local economic activity. contract to repair 2nd West Circular Road was awarded to local contractor Otuo-Ogbe Road in northern Edo had Hartland Limited. Two months later, a also been similarly handicapped by NGN2.8 billion contract to reconstruct neglect. Previous attempts to repair the Otuo-Ihievbe-Ogbe Road was awarded damaged 22.2km road had failed, and to Italian contractor Borini Prono.
Overcoming Depleted Capabilities
While the Administration had ambitions the roads that had been constructed, to drastically improve state roads, it and created perverse incentives for quickly realized that decades of under- contractors to increase unit costs. investment had depleted the relevant MDAs’ administrative and technical Initial designs for 2nd West Road did capacities to design, manage, and oversee not adequately account for the project the process. Further, weak adherence site’s complex drainage situation. After to formal requirements—such as prior the contractor had deemed the road engineering design and comprehensive complete, significant flooding con- costing—undermined the quality of tinued in the project catchment area.
18 Capital Spending in a Challenging Context Remedying the situation required project of past administrations, the Oshiomhole revisions totaling NGN22 million, and Administration needed to rapidly extension of project timelines from 4 to develop its own responses to address 12 months. Otuo-Ihievbe-Ogbe Road them. In both cases, the Administration faced similar challenges—insufficient utilized formal project revision mecha- technical capacity in the project design nisms to accommodate the changes to process necessitated three revisions to project scope and cost. And in both design and work scope. This resulted cases, it did so in a way that minimized in an additional NGN248.6 million in disruptions to project implementation. contract revisions. Although these chal- lenges stemmed from the shortcomings
Addressing Disruptions from Citizen Expectations
Governor Oshiomhole’s ambitions Prior to 2008, enforcement of zoning and standards—and commitment to laws was weak. As a result, many illegal deliver on them—took many Edolites commercial and residential structures by surprise. While most welcomed were erected. On 2nd West Road, these commitments, some resisted reconstruction required the removal of them for personal or special interest buildings and fences that stood in the reasons. To enable project implementa- path of planned sidewalks and drain- tion, the Administration thus needed age. This brought plans for infrastruc- to accommodate social and cultural ture development into direct conflict expectations around the distribu- with local interest groups. The local tion of settlements. To balance public Landlords Association was particularly expectations and fiscal responsibility, vocal and filed several formal com- the Administration tried to adjudicate plaints asking for compensation. Site citizen demands in a variety of ways. surveys deemed the structures illegal, and ultimately settlement payments were avoided. Where settlements were deemed necessary, however, the records show that they were honored.
Infrastructure Development in Edo State 19 3.0 Responding to the Challenges of Context: Mobilizing Strategic, Technical, and Financial Assets
The Oshiomhole Administration rapidly enhanced Edo State’s capabilities to achieve near term gains in infrastructure spending by centralizing authority in project cycle management, managing the impacts of irregular cash flow, strategically employing private sector capacity, and leveraging the financial sector.
Centralizing Authority in Project Cycle Management
The role of leadership can be pivotal At the same time, the Administration enhances his ability to drive performance in initiating and supervising a change has recognized the risk that these during project implementation processes. process, but outstanding individuals measures could adversely affect and are typically part of a larger group who delay much needed efforts to rebuild The Governor’s reach extends beyond prepare the systems and procedures, and the core capacities of the civil service. this central structure through Special ensure that these influence the behaviors Appointments in the form of special of organizations and individuals in dif- At the highest level, the EST plays a advisors (SAs) and senior special assis- ferent parts of the system. In this respect, key role in centralized fiscal planning tants (SSAs) placed across MDAs. These Edo is not exceptional.6 The rate of and management. Established in March individuals are responsible for managing delivery and quality of road assets deliv- 2009, the EST brings together key ex- some of the new agencies established by ered under this administration is being perts and senior political office holders in the current administration or advising achieved, in part, through the centraliza- support of the Administration’s political existing MDAs. For example, at the tion of authority around the Governor program. Chaired by a successful invest- MoW, an SSA checks on the progress and creation of institutional arrange- ment banker, the team also includes of project revisions or certificates of ments that complement existing official the chairman of the Board of Internal progress at the Governor’s request. departments. Due to historic neglect, the Revenue, the Commissioners of Finance Many of these appointments are held by Administration inherited a civil service and of Budget and Economic Planning, accomplished professionals drawn from that lacked the capacity to attract top and several members who entered public the private sector. These individuals have personnel, reward good performance, service from the private sector. The EST brought valuable skills and technical or credibly sanction maladministration. performs a range of functions to support capacity to the State’s Administration. To address this, the Administration State MDAs, namely: economic strategy, created special purpose agencies to al- project selection, procurement oversight, Two other agencies of relevance to this low the exercise of executive authority funding strategy and financial plan- study have been created since 2009. The free from the encumbrance of low- ning, project monitoring, and payment Rapid Response Agency (RRA), respon- performing civil servants or unpredict- decisions. It also oversees the flow of sible for overseeing road maintenance able outcomes at lower levels of MDAs. funds to road construction projects and projects previously managed by the The new arrangements have proven to manages the State’s cash priorities. By MoW, and the Fiscal Governance and be an effective way to complement the allowing the Governor to locate capital Project Monitoring Office (FGPMO)— capacity of existing official departments. spending controls close to him, the team or the “Due Process Office”—responsible
20 for exercising due diligence and provid- ing feedback on project implementa- tion. In its first few years, the FGPMO participated in the budgeting, procure- ment, and monitoring processes of road projects, including carrying out site inspections. Since the Administration’s re-election in 2012, the Office has redefined its role. It is presently working across MDAs to develop an integrated project management dashboard to improve executive oversight of capital project implementation and manage the accumulation of contract liabilities.
In light of uncertain revenue flows, these actors enable the Administration to reconcile the pace of execution with cash flow management. They also facilitate -ar rangements for phased approvals of proj- ect initiation and payments. At the same time as these arrangements allow for more rapid rates of execution and more direct lines of supervision and account- ability, the overlapping memberships of the EST, the State Executive Council, and the State Tenders Board (STB) requires clear assignments of responsi- bility amongst them so as to avoid the risk of overlapping mandates and thus diffused accountability. The EST is an advisory body that depends on informa- tion provided by some of its members in other agencies, but does not approve con- tracts. The Ministerial and State Tenders Boards approve contracts within mon- NEW PHOTO* etary thresholds, and the State Executive Council and the Governor ratify such approvals based on monetary thresholds.
Infrastructure Development in Edo State 21 Managing Irregular Cash Flow
The project management risks posed by This allowed the Administration to first uncertain cash flows have been mitigated issue contracts based on initial project through several unorthodox devices. sizes that were tailored to projected avail- These include the practice of mak- able resources, and then to expand them ing budgetary modifications at several as additional funds became available. stages, allowing contractor liabilities to Centralized management of payments accumulate, the frequent use of project has been used to reprioritize works revisions—including inserting new within existing and ongoing contracts. projects within existing contracts—and For works of higher priority, pay- tight, centralized control over payments. ments can be fast-tracked for approval. None of these provisions are without Payments were often delayed and made risks, but they did ensure that rates for only when cash became available. This, expanded scopes of work within each coupled with overdraft agreements contract remained relatively consistent. between contractors and banks, allowed Supervision arrangements were transac- project implementation to continue even tion intensive as they required actions when the State faced strained revenue at several independent levels, including flows. Project revisions were used to third party engineering firms and SSAs insert new works into existing contracts. or SAs appointed by the Governor.
Figure 3.1 Forecast vs. Actual Internal, Statutory, and Total Revenue
Forecast Revenue
Actual Revenue Revenues in Billons of Naira
2008 2009 2011 2012
Note: Data was unavailable for 2010
22 Responding to the Challenges of Context Employing Private Sector Capacity
Given the limited capacity of the MoW The introduction of consultants extended of all state road contracts. Interviews and MoE, the Administration has the technical expertise of the Governor’s with consultant engineers indicate that used the private sector to assemble the Office’s involvement with civil engineer- those companies with higher technical technical and administrative expertise ing and infrastructure project manage- capacity and financial depth are ascen- it requires to implement its infrastruc- ment. Formally, the process of contract- dant in the system, as they can deliver ture portfolio. Edo State is not alone ing consultants resides in the MoW, with infrastructure of adequate quality while in this practice, but it would appear to consultants facing the same procure- absorbing accumulated payment arrears. have retained private sector engineering ment process as other state contractors. Whilst reliance on a relatively small outfits as project consultants to a greater However, their performance is also number of large contractors does not degree than in other states. Recruited to shaped by formal and informal lines of come without risks (such as crowding augment—and, in some cases, substitute accountability to the Governor’s Office. out small to medium sized contractors for—MDA staff roles within the project and exposing the Administration to cycle, these consultants have brought The Administration also adopts the allegations of favoritism and collusion), technical capacity to road building proj- normal practice of engaging contrac- given the sophistication and complex- ects and sharpened contractors’ incen- tors to undertake construction. In all, ity of some of the road designs, and the tives to perform, all with lower entry and under this Administration, five large past history of the state, the Governor exit costs than are possible with more contractors account for 83% of all road sought to reduce the risk of non-delivery unwieldy civil service systems. construction; one of these, along with its by relying more on firms with strong subsidiaries, holds 49% of the total value technical capacity and financial depth.
Leveraging the Financial Sector
Banks are important players in any In this system, adequate risk assess- construction business. In Edo State, the ment mechanisms neither solely rely on banking sector has been harnessed to a contractor’s financial and technical further the objectives of rapid construc- capacities nor on formal records, which tion. As holders of government accounts often do not hold complete information. and guarantors of contracts, banks Instead, they take into account infor- provide key financial services to both mal channels of information. To assess the government and its contractors, the risks of issuing APGs and loans to thus alleviating cash flow problems on both contractors and the state govern- both sides. Banks also quantify risk in ment, banks focus on the reputation of their contractual arrangements, issuing the principal. They examine the state advance payment guarantees (APGs) government’s recent history of making based on their assessments of risk. timely project payments, and how the principal at the contracting firm has Current risk assessment mechanisms dealt with loan repayments in the past. create a system of informal and creative This latter point further reinforced the accountability between the banks Governor’s strategy of giving prefer- and contractors. Some banks set up ence to large contractors with a proven mechanisms to profit by lending money financial track record. Banks report that to the State, and then lending to the the current Edo State Government has contractor to finance execution of the a positive reputation for loan repayment. contract. Through this guarantee of The Administration’s public assurances extra profit, banks can lower their risk of increased capital spending allow the assessments and increase profits, thus banks to spread their risk over a number creating incentives that are conducive of contracts, and future expectation, to uninterrupted project execution. thus lowering their risk assessments.
Infrastructure Development in Edo State 23 4.0 The Project Management Cycle at Work in Edo
Bearing in mind the contextual constraints (section 2.0) and the ways that strategic, technical, and financial assets were mobilized (section 3.0), this section describes these new approaches at work through the traditionally recognized stages of capital spending: (i) project identification and selection; (ii) budgeting; (iii) design and costing; (iv) procurement and contracting; (v) project revisions; (vi) construction; (vii) supervision; (viii) payments; and (ix) auditing. It will be immediately apparent that in Edo these stages are best understood not as discrete or linear steps, but rather as an iterative process. This process is dynamic, modifications are frequently introduced to adapt to lessons learned, unintended consequences and to deal with potential shortfalls in performance. The process observed is not dissimilar to that documented elsewhere as ‘situationally determined responses to specific problems’, or ‘iterative, adaptive learning’.
Project Identification and Selection
Project selection in Edo State balances Geographic siting of infrastructure ways that would not be achieved via a competing claims on public resources projects is often informed by de- classic technical cost-benefit analysis. and medium-term plans for economic mands articulated by representatives development. This is a semi-formalized from influential constituencies. These Political considerations were an early process whereby methods, such as representatives can sometimes be factor in decisions to increase investment cost-benefit analysis, are not used to junior- and mid-level officials within the in roads; many projects were identified determine the most efficient alloca- Administration, or elected local political as part of the medium-term economic tion of resources. At the outset, when leaders. Unpopular decisions on the development plan prepared by advisors the Administration commenced in allocation of projects can lead to a loss of early in the Governor’s first tenure. In November 2008, given the parlous con- support among specific constituencies. some cases, projects were strategically dition of the State’s infrastructure, cou- Therefore, it is plausible that this process sited to spur economic growth, or to pled with the paucity of funds and the allocates resources to reasonably judi- assuage past neglect suffered by regions public expectation of an ‘overnight turn- cious areas of public need, but officials due to previous political priorities. around’, it proved relatively easy to reach are also aware that this can be used to consensus on project allocations through both advance or deny the public interest. Over the past four years, new road a more discursive process that weighed Still, the calculus of project selection projects have been awarded in two large the political, economic, and social necessitates the inclusion of variables— ‘bursts’ of contracting, which occurred merits of competing proposed projects. such as solidifying the political sup- in December 2009 and October 2011. port base and building coalitions—in Together, these bursts account for 29
24 out of 43 road projects, 87% of total contract value, and 92% of total length of roads contracted. The first burst signifies the period when the institu- tional arrangements for PFM described in this report were brought into their initial form. The second was timed to achieve political performance goals before the 2012 gubernatorial election. These projects were identified through a process of negotiations with political interlocutors from potential beneficiary communities. Where public services are variable across geography, the siting of a capital project—which then creates a stream of associated spending—can be a high-magnitude political act.
Infrastructure Development in Edo State 25 Budgeting
Approved annual capital budgets are affected its ability to handle accumu- unreliable predictors of actual capital ex- lated project liabilities. Thus the EST penditure and of projects that will reach instituted an arrangement whereby commissioning, partly as a result of reports are issued by the FGPMO that the unreliability of revenue forecasting. summarize contractor performance Thus, project budgets are periodically and indicate certificates paid, due, or revised both in light of actual revenues in arrears. These are delivered to the and agreed changes in the scope of work. attention of the Governor, Chairman This is recognized as a source of difficul- of the EST and finance officials so as ty in managing accumulated liabilities. to facilitate cashflow planning. There exists an implicit understanding that the For example, of the 69 projects budgeted project scope and designs are malleable in 2009, only 25 were initiated. This and bound to respond to financing situ- demonstrates that a key tier of budget ations. Management decisions in these management comes at the stage when situations are a function of the timeli- administrative approval is given to initi- ness of federal transfers, collections on ate a project. Budget approval takes place own-source revenues, the pace of other in layers, including control of payments projects competing in the fiscal space, and revisions of the project scope, and and the scope of ongoing revisions to later in the shape of annual allocations the current projects at any given time. to ongoing projects in the capital budget. Administering this complexity creates This multi-stage budgetary approval is heavy management costs. It is also plau- typical of capital projects running be- sible that it contributes to higher unit yond a fiscal year. The repetitive budget- costs arising from both government and ing adopted in Edo enables the State to contractors borrowing to cover shortfalls continually resize and reshape the port- resulting from cash flow uncertainties. folio of capital spending according to available revenues and other exigencies. Increased collection and usage of This is therefore an effective adaptation information on capital project liabili- to optimize resource use under the con- ties could increase the effectiveness of straints found in the budgeting system. centralized control and planning, while also providing useful inputs to cash The repeated revisions and delays in fi- management decisions. The Directorate nancing, however, weaken the incentives of Information, Communication, and for detailed ex ante project financing Technology (DICT) and FGPMO plans ahead of contracting and imple- are both already collecting infor- mentation. As part of project prepara- mation that could be used in these tion, therefore, no financing plans were ways. This opportunity is discussed included in the files that were reviewed in the final section of the report. under this study. The Administration however had become aware that the absence of a financing plan adversely
26 The Project Management Cycle at Work in Edo Design and Costing
Low formality for project approval, design was done only to the extent that of this study, the state was readying as well as policy imperatives for rapid im- it facilitated the immediate task at hand. for another burst of capital spend- plementation, means that the attention The process leads to extensive revi- ing in 2014, and the use of designs given to initial project design and costing sions: of 43 projects, 20 had revisions. provided an important opportunity to has in the past been limited. Feasibility Before implementing a contract revision, further improve the efficiency of project or environmental studies typically did consultants and contractors will move implementation. Institutionalizing not inform designs. An absence of effec- budget lines to accommodate ad hoc re- the use of designs in either of these tive Geographic Information Systems quirements, based on appreciation of site areas of spending would also provide (GIS) capabilities also constrains the conditions. The lack of technical design a long-term boost to the quality of use of accurate geospatial data in project allows contractors to routinely request project implementation processes. designs. As a result, many projects at cost increases to respond to environmen- the onset of the current administration tal reality and social context in which Additionally, the study process included were initiated with designs produced the project is being implemented. This discussion of the merits of making by the MoW that lacked integrity – as process incentivizes contractors to inflate project designs publicly available. This a result, when contractors were mobi- contracts through material rates set to could yield ancillary benefits to project lized, site conditions required many, ensure adequate margins for variable de- implementation, such as allowing sometimes fundamental, design changes. signs. This often results in cost overruns interest groups in the catchment areas Additionally, Bills of Engineering and can reduce the State’s ability to hold of a given project to understand and Measurement and Evaluation (BEMEs) contractors accountable for performance. offer input on the improvements their use past estimates of quantities in- community will accrue. By publicizing stead of design-based calculations. Perceiving that project costs were project designs and soliciting citizen ballooning and unpredictable due to input within a specified window of Indeed, to mobilize immediate work, revisions occasioned by lack of prior time, the state may also be able to contractors were initially permitted designs, the Administration has since reduce the volume of unanticipated to “design as they go” in the course of August 2012 increased efforts to enforce disruptions—and increased costs—to project implementation, or to imple- the practice of proper project design by project implementation by demonstrat- ment “as-built design”—meaning project engineering consultants. At the time ing acknowledgement of public input.
Infrastructure Development in Edo State 27 Figure 4.1 Revisions to Time and Cost of 10 projects studied
+400%
+300%
Avg. Time +200% Revision +177%
Note: Projects 5 & 6 were +100% completed Avg. Cost Percentage Revision on-time without Revision revisions to cost. +35% +0% 1 2 3 4 5 6 7 8 9 10 Project Revisions Project ID
Given what has been remarked to this delays for an administration keen on Significant cost overruns make it point—regarding revenue projections, rapid delivery of infrastructure. Finally, more difficult to match projected cash flow management and the integ- they hold out credible opportunities for liabilities with projected cash flows. rity of initial project designs—project contractors for compensation if they Revisions on one project for Iyamho- revisions are a necessary and prevalent create assets up to a reasonable standard. Iyora Road were made to allow for feature of project preparation, approval, the construction of a network of and implementation. As previously men- While there is no doubt as to why the roads over farms and footpaths and tioned, 20 out of the Administration’s Administration used the above meth- to encourage economic development. 43 road contracts had revisions; of ten ods to deliver on its commitment to Over the course of three revisions, the projects studied in detail, eight were capital roads, during the course of this total project cost increased 196%. revised. The average revision increased study, several adverse consequences the original contract value by 17%, of these practices were discussed: Weakening of discipline on unit cost though increases ranged from 4% to estimates by contractors escalates unit 196% on individual contracts. While High frequency of revisions, along costs over time. The implications of some contracts were completed on with weak documentation on underly- contract revisions were observed to schedule, time extensions associated with ing design, quantities, and unit costs, extend beyond just the original project. revisions were as high as 41 months. can make it difficult for the govern- One contract was revised three times, ment to ensure quality standards and from NGN4.2 billion to NGN7.2 bil- These findings suggest that the project to discipline contractors to observe unit lion, a 36% increase in contract value. revision mechanism has been stretched cost norms. A few large contractors have Revisions included altered specifications to increase the processing efficiency of been given contracts in areas where the for stronger reinforced concrete on the Edo’s capital spending. The new ap- Administration accorded high priority road. The contractor had used concrete proaches to contract variations allow to developing internal road networks as that was approximately three times the for six features. First, they allow for well as main arteries. A key caveat of any cost of regular reinforced concrete. This rapid and flexible additions of project addendum is that the same schedule of same approved rate for concrete was then elements in response to technical and rates applies to all roads that are to be carried over to other projects that did political needs as they arise. Second, they constructed. This allows the contrac- not require the same quality of materials, minimize the costs and time required tor to take the high rates from a main unnecessarily increasing project costs. to evaluate bids in multiple-objective road, and carry them over to light works contracting, which have high informa- on side roads. This is likely to lead to The ability to enforce contractor perfor- tion requirements and transaction costs. inappropriate standards and a creeping mance can be weakened by the frequency Third, revisions allow loading of addi- increase of capital liabilities. At the same and ease with which revisions are made. tional amounts into contracts to provide time, contractors have been compelled to This practice may decrease pressure on for citizen settlements when onsite con- provide adequate documentation prior to contractors to perform work that is of ditions require such payments. Fourth, payments made on the basis of the origi- adequate quality within the original revisions can be used to assign optimally- nal unit costs, often agreed more than a contract terms, as contractors may performing contractors to newer projects year after award of the original contract. believe they can easily request additional without incurring the high transaction Arguably this causes contractors to funds and time to execute projects. and processing costs associated with pro- absorb costs, rather than increase unit curement. Fifth, they minimize process costs to be borne by the government.
28 The Project Management Cycle at Work in Edo Case 2: Community Settlements Within State Infrastructure Contracts
Citizens in Edo—and, indeed, across materials to the site. Later in the project, influence and authority of the traditional the Niger Delta—commonly perceive another group received seven jobs as ruler, while informal in nature, was that public resources are not equitably settlement for ending their continual adequate to convince the contractor to distributed. As such, many seize upon harassment of work crews. In these comply with the demanded settlement. visible acts of public expenditure to instances it was clear that the organized express their grievances and demand threat of violence was adequate power The norm of community settlement is benefits. Road construction projects are to capture marginal public resources. so well established that contractors have routinely subject to organized protests developed adaptations to routinize and that impede work progress through theft It is also common for other organized minimize the process costs. During of key equipment and materials and/ groups in a project’s catchment area to the reconstruction of the Otuo-Ihevbe- or demands for jobs by local actors. demand settlement in return for allow- Ogben road, the contractor sent their ing a project to progress unimpeded. public relations officer to contact each To resolve these grievances, contractors Two common groups are Community traditional ruler in the catchment area or government agents often provide Development Associations and of the project. These consultations were ‘settlement’ through distribution of Landlords Associations. Both can make used to identify individuals each ruler both monetary and non-monetary some legitimate claim toward represent- wanted to receive jobs on the project’s resources. Community demands and ing the interests of an identifiable group construction crews. This response corresponding settlements varied in of individuals within the geographic to anticipated demands mitigated each of the ten case study projects. catchment area of a given project. Their protests during project implementa- However, descriptions of the anecdotal organization grants enough legitimacy tion, which progressed without a major case histories shed light on common or influence for contractors to feel that community-driven work stoppage. dynamics between members of the they must respond. Settlement for public and capital construction projects. these associations is often provided as The practice of community settlement tangible assets, such as additional works is undoubtedly successful in extract- The reconstruction of Akpakpava Road like access roads or sewage systems. ing marginal benefits for organized was one case where community con- and/or influential members of the troversy was highly visible. Throughout In other cases, less overt means of pres- public. But its informality and unpre- the life of the project, several organized sure can successfully extract similar dictability could potentially lead to a youth groups used a variety of means compensation. On the Jattu-Auchi road reduction in the overall distribution of to extract settlement from the contrac- construction project, a traditional ruler benefits to the community at large. tor. Their primary demand was access approached the contractor’s represen- to jobs on the work crews. One group tative with a list of ten individuals was able to elicit six jobs at the outset of requiring a monthly salary as “ap- construction by blocking the contrac- propriate community support” before tor from mobilizing equipment and work would be allowed to start. The
Infrastructure Development in Edo State 29 Construction
Uncertain construction timelines often result in significant cost overruns. Delays are caused by a variety of factors includ- ing, as discussed previously, the need to adapt project designs, make revisions to materials requirements based on environ- mental conditions, and work stoppages caused by delayed or withheld payments.
Populations living in project catchment areas can also cause delays by organiz- ing to increase the perceived costs of ignoring their demands. Of ten case study projects, six were delayed by such activities. While the State records formal grievances received by letter or citizen delegation to the relevant MDA, records show that it may lack the capacity to address them. Further, not all citizen grievances may warrant official action. Contractors are thus expected to respond to grievances by providing supplemental benefits to catchment area communi- ties. These might include employing local youth in construction gangs or creating additional infrastructure improvements such as sewage exten- sions. These supplemental duties increase project costs for the State and the project management burden for contractors.
30 The Project Management Cycle at Work in Edo Public Involvement in Construction
Around construction sites, there is generally little infor- Youth Groups: often block construction until they receive mation on upcoming or active road projects available jobs or other forms of settlement. Contractors anticipate this to interested non-state groups or local residents. Yet ac- behavior and allocate a quota of jobs for local youth on each tive and organized citizens in project catchment areas are project. This helps maintain positive community relations and often able to attain personal benefits in the name of the prevent disruption of work. For example, halfway through the public. They do so by using social stature or agitation to construction of Sapele Road, the contractor was forced to con- secure localized benefits from the contractor and priva- tract several youth to grade area roads. These are highly cov- tize chunks of public resources. These actors include: eted positions, as they provide daily wages (from NGN3,000 to NGN6,000 a day) and, for some, represent a rare path to Customary Leaders: are often able to influence the allocation long-term employment. Contests for these roles, however, of benefits from road projects in their communities. In any tend to exacerbate community tensions. Several youth groups catchment area, these leaders administer resources invested by may form in a given catchment area, as was the case in the the State, development organizations, or other actors, and ap- Akpakpava Road project, each claiming to be the “most portion resources among the public as they see fit. Customary legitimate” youth group in the area and thus deserving of jobs. leaders may appoint Community Liaison Officers (CLOs) to interact with contractors or dedicated project monitoring Affected Residents:There are statutory provisions requiring committees to represent community interests on a project. the State to consult with and compensate citizens affected As CLOs receive benefits in the form of status, financial by public works projects. Yet regulations and practices for compensation, or ancillary compensation (e.g. excess project compensating residents affected by road projects are some- materials, such as bags of cement), these positions are highly what ambiguous. As a result, such citizens often employ desired. Beyond the allocation of benefits, however, such lead- private estate surveyors with the expectation that these ers have limited influence in other aspects of road projects. professionals can secure more compensation for them. While such surveyors, by law, should command no more Community Influencers: include citizens often chosen by than 10% of their clients’ compensation for their services, their peers to represent public interests on a road project. They in reality, fees charged often exceed this amount. Due to are usually educated or working professionals, which lend a lack of understanding of the regulations and practices, them perceived authority. Serving as a community’s interlocu- residents often believe they are insufficiently compensated tors with contractors or the State is a position of privilege, for their homes, which breeds frustration and resentment. and this is sometimes abused. In one road project, a former Nigerian National Petroleum Corporation executive was appointed Chair of the Project Implementation Committee, comprised of local residents. The Committee facilitated the selection of two roads to be constructed. The first selection was a road that led to the house of the Committee Chair. When a local traditional leader expressed the community’s dissat- isfaction at this selection, the Chair mollified him by then selecting the road leading to his house as the second project.
Infrastructure Development in Edo State 31 Supervision
By augmenting technical capacity and project management, accentuated by This weakens the consultant’s authority coupling this with intensive political periodic and unscheduled site inspec- to effectively supervise the contractor. attention to key contract performance, tions. During these inspections, on-site Additionally, while the MoW is supposed project supervision has been a key factor orders for quality control and design to supervise consultants, it often lacks in the success of this administration’s in- variations ensure projects can meet the the necessary equipment, staff, or time, vestment in roads. In the absence of prior State’s high standards for asset quality. leaving consultants to operate indepen- designs, project supervision has adjusted During the early stages of his tenure, the dently. Further, consultants are supposed to account for contractors’ design-as-you- Governor further extended his capacity to co-sign all lab tests, but as they lack go approach. Further, the form and con- to directly supervise projects through both the equipment to run independent sistency of supervision has been mixed. the establishment of a supplemental tests and often the authority to insist monitoring authority, the FGPMO. on their participation in the contrac- The MoW’s technical capacity for super- tors’ tests, this does not always happen. vision has been supplemented through While these interventions have helped the use of supervisory consultants from yield adequate quality road assets, they The high cost of implementing correc- the private sector. Consultants prepare have not been fully institutionalized tive action demanded by the Governor certification reports, which are ap- and, as a result, can be overcome by creates incentives for contractors to keep proved by the MoW prior to payment. other forces. The triangular relation- projects at the acceptable level of asset Supervisory consultants and MoW ship between contractor, supervisory quality. However, given limitations on resident engineers share monitoring consultant, and MoW resident engineer the Governor’s time, as well as uncer- responsibilities. The former provides is tilted in favor of the contractor who, tainty about the commitments of future the day-to-day monitoring and direc- often on the strength of their politi- administrations, it is not clear that tion of work on-site, as well as docu- cal and associational relationship with contractors will adopt quality-enhancing mentation of contractors’ work, and the senior officials in government, can practices on a routine and ongoing basis. the latter performs managerial review carry more weight. Accountability While the FGPMO was a potentially and administration functions. for consultants is muddled by the fact reliable body to institutionalize these ef- that their payments from the MoW are fects across future administrations, its ca- Another key feature of supervision is received through contractors, whose pacity and mandate have been reduced. the Governor’s vigilant attention to contract value includes consultants’ fees.
Figure 4.24.2 Project RatingsRatings on on S upervisSupervisionion and and Quality Quality of 1010 projectsprojects studied studied
Low Adequate High Low Adequate High
Quality 2 1 3 4 10 Quality 5 8 7 9 2 5 8 1 3 4 7 9 10
Supervision 1 2 4 5 6 7 8 3 9 10 Supervision 1 2 4 5 6 7 8 3 9 10
These three projects Note: Quality data This project had both had both low quality was unavailable for high quality and high andThese low supervision. three projects project Note:6 Quality data supervision.This project had both had both low quality was unavailable for high quality and high and low supervision. project 6 supervision.
32 The Project Management Cycle at Work in Edo Figure 4.3 Methodology for Assessing Road Quality
Independent civil engineers conducted a site assess- ment of the ten case study roads. One is profession- ally licensed by the Council for the Regulation of Engineering in Nigeria (COREN), with nearly ten years of combined road design and construction manage- ment experience in various states of Nigeria, and another engineer was a licensed civil engineer in the USA.
The quality assessment included site inspections and face- to-face interviews with the Project Manager of the con- tracting company responsible for each road site as well as personnel from the MoW who had supervision authority over the given projects and with road construction work- ers. During these interviews, documentation was sought in the form of (i) road designs, (ii) BEME’s, (iii) material tests, and (iv) payment memos. Where documentation of road- works was inconsistent, more interviews were conducted to fill gaps in data. Site inspections consisted of: driving tests, measurement of key features (road width, sidewalks, drains, etc.), and evaluation of material properties accord- ing to technical specifications for roadwork construction.
The primary reference documents used were (i) Section VI: Roadworks of Volume II of the Federal Ministry of Works and Housing’s manual titled “General Specifications (Roads and Bridges)”, and (ii) the “Standard Specifications for Road and Bridge Works” by the Division of Roads and Transport Technology of the Council for Scientific and Industrial Research.
Infrastructure Development in Edo State 33 Variability Across 10 Projects Studied
Of 43 projects studied, ten projects were researched in greater detail as case study examples representative of road construction projects under the Oshiomole Administration. This graphic displays the high frequency of variability across the ten project case studies, which can be seen throughout project attributes including: cost, duration, number of revisions, revisions to cost and time, and quality. The ten projects studied are located across four LGAs: Oredo, Ovia Southwest, Etsako West, and Owan East. Eight of the ten projects had contract revisions to time and costs. And, final project costs ranged from NGN0.07 billion to NGN7.24 billion, while completion times varied from 6 to 65 months.
Final Cost Project 1 Project 2 Location (LGA): Oredo Location (LGA): Oredo
Final Duration 7. 2 4 B 38 months 0.35B 12 months 3.2 km adequate 1.24 km low Final Length This project was revised once to This project was revised once. It cost improve drains. It cost 72% more than 6% more than planned and took an planned and took an additional 30 additional 8 months to complete. Quality months to complete.
Note: for more information on how road quality was assesed Project 3 Project 4 see figure 4.3 on page 31. Location (LGA): Oredo Location (LGA): Oredo
1.43B 21 months 5.48B 65 months 1.92 km adequate TBD adequate
This project was revised three times This project was revised three times to and took an additional 17 months to incorporate flood control measures in complete, but the total cost did not the design. It cost 23% more than change. planned and took an additional 25 months to complete.
34 The Project Management Cycle at Work in Edo Figure 4.4 Project Cost of 10 projects studied in relation to all projects
1
7
4
10 8
9
3 Average cost of studied project: 3 Billion Naira
2 Average cost of all 5 projects: 2.2 Billion Naira 6
0 N1B N 2B N 3B N 4B N5B N 6B N 7B N 8B
Project 5 Project 6 Project 7 Location (LGA): Oredo Location (LGA): Ovia Southwest Location (LGA): Etsako West
0.09B n/a 0.07B 6 months 6.58B 41 months 1.15 km low TBD TBD 13.3 km adequate
This project had no revisions to cost This project had no revisions to cost This project was revised once to include and time. and time. better materials, walkways, provision for streetlights, additional drainage, and expanded road width. The cost increased by 4%, and took an additional 11 months to complete.
Project 8 Project 9 Project 10 Location (LGA): Owan East Location (LGA): Etsako West Location (LGA): Oredo
3.01B 41 months 2.92B 51 months 3.17B 13 months 22.7 km low 11.1 km high TBD high
This project was revised two times. This project was revised three times to This project had no official revisions, The road cost 9% more than planned include three connecting township roads. but design and work scope changes and took an additional 29 months The project cost 198% more than the led to a 6% increase in cost. The to complete. initial contract amount and took an project took an additional two additional 41 months to complete. months to complete.
Infrastructure Development in Edo State 35 Payments Audit
Project payments are managed in light months after the progress milestone Across the State’s 43 road projects, it was of revenue uncertainty and are central- it intends to document—in others. observed that the ex poste audit function ized at a high level. Across the State’s is relatively weak. The impact of limited 43 road contracts, 289 payments were Payment decisions are closely con- capacity within this function, however, made. On average, payments were 9% trolled at the central level between the is partially mitigated by high sanctions behind physical progress. This points to a Governor, the EST, and the Accountant- on performance in the form of delays in tightly controlled performance-oriented General so as to optimize payments payment and denial of future contracts. system, but this conclusion is compli- with competing inter- and intra-sectoral cated by the wide range of variations demands. For this reason, payment A pre-audit process exists to provide a between -71% and +82% around the decisions assume significance and are the higher level of assurance on the scope 9% average, with 35 out of 43 con- tertiary level of financial management and quality of infrastructure before tracts within one standard deviation. after budgetary approval and admin- final payments are made. But as the istrative approval of capital projects. process is not performed by qualified Across the entire project portfolio, engineers and is instead housed in the payments in 15 contracts outstripped To mitigate the uncertainty of this Auditor-General’s Office, the credibility progress, while in 19 contracts, payments payment system, contractors are usually of an arm’s length audit is weakened. were behind progress by greater than provided with significant mobiliza- The study also could not find records 10%. Payment installments occurred on tion advances, ranging from 23% to of pre-audit site inspections to deter- average 93 days after approval of associ- 40% of the contract value. This attracts mine their focus and robustness. ated progress certificates, compared to high-profile contractors, allows them to the 45 days stipulated in contracts. These make progress on the work—including delays may be attributable to the high through informal mechanisms, such as demands on the executive to manage the handling of settlement payments— centralized approvals and the need to and thereby minimize disruptions caused balance cash flow across spending priori- by uncertain timing of progress pay- ties. It may also indicate that payments ments. Mobilization advances, together are routinely used to discipline contrac- with time overruns, suggest that contrac- tors for poor performance, although tors may anticipate delays in payment this view is disputed by contractors. when they pace out implementation. It is also likely that contractor payment There is no standard guidance on when and liquidity management approaches progress certificates should be generated can result in contractors overloading based on progress milestones, and such estimates, exposing the risk of excessive evaluation measures are not contrac- costs. And, when the difference between tually documented. The number and payment and progress is controlled timing of certificates varies between within a range, contractors may use projects, with monthly certificates work slowdowns to avoid accumula- observed in some cases and sporadic tion of liabilities and move into work certificates—sometimes generated six activity closer to anticipated payment.
36 The Project Management Cycle at Work in Edo Figure 4.5 Approval Process for Road Project Certificates with Edo State’s Institutional Arrangement Civil Service & Private Sector based on 10 projects studied
Day 1 Contractor draws up certificate. Consultant reviews and approves certificate. 5 Resident Engineer reviews and approves certificate.
If sign off is required from 10 Director of Highways & Maintenance writes memo requesting payment. the Ministry of Environment , 11 Permanent Secretary, Commissioner, and Secretary to the State Governor process is delayed by 14 days. (SSG) receive memo.
If revision is proposed by Governor, process has to be repeated and delayed by 44 days. 28 Governor approves certificate.
Payment installment deadline in the initial contract. 45
58 SSG, Commissioner, and Permanent Secretary successively receive approved certificate.
62 Director of Finance and Administration requests release warrant.
72 Commissioner of Budget & Planning receives forwarded documents. Accountant General administers payment voucher.
80
Average duration to process 93 a payment installment.
Contractor receives payment 80 to 138 days later.
138
Infrastructure Development in Edo State 37 Case 3: Emergency project budgeting and procurement, and new project initiations
The Oshiomhole Administration phone-in radio programs, to fix the These contracts were initially awarded developed approaches to facilitate the ef- road. Responding to citizens’ concerns, for NGN4.2 billion and NGN2.4 billion fective execution of road contracts. These the state awarded a road reconstruction respectively, and were each revised by included the use of emergency projects contract to 4ND Ventures to rapidly approximately 71% (to NGN7.2 billion) to allow a ministerial tenders board to repair damaged rails and failed portions for the former and 125% (to NGN5.4 quickly approve contracts to respond of the bridge. The project was completed billion) for the latter. Combined, the two to public hazards, and extensive use of in six months and with no cost revisions. contracts encompassed road construc- contract revisions to avoid long contract- tion on five major roads across Benin ing processes for new projects. These The state has also used project revisions City as well as adjoining feeder roads. mechanisms have reduced the impacts to initiate new projects within exist- While the project revision mecha- of subpar design or project planning, as ing contracts to avoid time-consuming nism enabled new road works to be emergency projects or project revisions and costly contracting and mobiliza- efficiently initiated, some informants allow the State to swiftly correct design tion processes. Contractors can take questioned the value for money of these or process flaws. These mechanisms have months to mobilize to site and often contracts. Together, the two contracts also helped overcome long procure- require mobilization payment of at make up 12% of the Administration’s ment and mobilization processes. least 25% of the contract value. expenditure on roads but only 1% of the total length of roads constructed. The Administration has maintained The Administration leverages ongo- an Emergency Road Intervention ing construction contracts to start new Iyamho-Iyora Road is another example Fund under the MoW to rapidly road projects within the same vicinity. of how the Administration used contract respond to urgent care of maintenance Given this practice is fairly widespread revisions to implement multiple projects. needs for roads or bridges. For such and is thus perceived by contractors The project scope was thrice revised to cases, the Governor can approve up to be relatively low risk, in these cases include township roads to communi- to NGN100 million without seeking contractors are often willing to start ties along the 13km road. While the approval from his Executive Council work immediately and do not require a new roads were quickly implemented, or going through the annual budget- mobilization payment. Despite covering the three revisions brought the con- ary process required for standard road their own initial expenses, contractors tract value from NGN1 billion to projects. Emergency projects also do have reasonable assurance that they NGN2.9 billion—a 196% increase. not require a supervisory consultant. will be paid by the State, borne out by a political rather than a legal warranty. The Edo State 2012 budget allocated NGN1.2 billion toward the Fund, out Two projects—the Expansion of of which NGN74 million was used to Akpakpava/Dualization and Expansion address the precarious state of the Ovia of New Lagos Road Benin City, and Rivers Bridge. Numerous deaths from the Expansion of Dawson-Urubi-Uselu- drivers and pedestrians falling over Ugbowo Lagos Road/Construction of broken railings on the bridge drove Roundabout and Associated Works at people living in the catchment area to Five Junction—are clear examples of appeal to government, through popular the project revision mechanism at work.
38 The Project Management Cycle at Work in Edo Social Accountability and the Vexed Role of Civil Society in Improving Performance
The common presumption in the World Bank has been that Around Town”, “People Talk to People” and “Roundtable” are greater ‘social accountability’ hinges on measures to facilitate well patronized, but their aims are diverse and their volatile ‘demand side’ engagements by citizens in the process of public advertising revenues and lack of a strong capital basis neces- policy, spending and service delivery. Interventions in support sitate reliance on content sponsors. New media channels are of social accountability tend accordingly to make special also emerging as important, the Facebook group “Edo Political efforts to intensify two relationships of accountability: those Forum”, for example, has over 6,800 members and often fea- between citizens (as clients for services) and service provid- tures lively discussions on state governance and development. ers, whether these be contractors or government officials, and Tracking conversations about road projects however reveal that second, those between citizens and elected officials/policy they appear to be dominated by individuals with vested inter- makers. This study, along with preparatory work leading to ests, such as contractors or state officials. Despite their passion, the design of the Niger Delta Social Accountability proj- the study could find few instances where the quality or impact ect cautioned that, at least in the Niger Delta context, this of road infrastructure was enhanced through these channels. was likely to be simplistic, have unintended consequences and risk missing one of the key lessons of this study . Second, it is arguably the case that ‘social accountability’ in Edo has been served by the enhanced measures docu- First, presuming clear division of interest between citizens, mented in this report to improve the relationships of ac- including organized elements of civil society, political of- countability between those responsible to deliver road ficials and service providers, is misleading. In this context, infrastructure – the contractors and consultants – and the a more reliable starting point is to acknowledge that net- political executive, the Governor and his Economic Strategy works of political and business interest, local affiliations to Team. This dimension of the ‘accountability triangle’ made geographic localities or ethnic identities, and the allegiances popular by the 2004 World Development Report tends to maintained through patronage, and so on, all cut across these be neglected in social accountability interventions spon- divides. It became apparent during the course of this study sored by donors. Yet in Edo it has been crucial for it has that Edo State has a wide array of ‘civil society’ organiza- been the principal means whereby the Administration has tions whose potential to articulate ‘citizen voice’ remains been able to service important political constituencies whilst untapped due to chronic gaps in funding and technical also engendering public perceptions that a broader social capacity. But, at the same time, it is far from certain that compact is being serviced through the results delivered. the ‘public interest’ would automatically be served should they realize this potential. Edo State has over 250 regis- There remain significant ways in which both the social tered non-governmental organisations (NGOs). Few have compact between the political executive and Edo citizens a nuanced understanding of how government works, their can be enhanced. Those identified during the research technical capacity is limited, and with few exceptions, their and discussed during consultations are summarized in the unstable funding base make them prone to ‘treating’ in ways concluding section. But it should be apparent that the entry that can create distortions between the interests they claim point for these measures – such as Edo’s Open Data Portal - is to represent and how they are obliged in practice to behave. to further heighten the accountability relationships between the political executive and service providers, contractors and Other spaces are also evident where credible public dialogue the private sector, and through this, open further oppor- routinely occurs. The state has a vibrant popular media and tunities for more classic measures for citizens to make the growing profile of online discussions. Radio shows like “Man performance of both more contestable in a public space.
Infrastructure Development in Edo State 39 5.0 Conclusion and Proposals
Six years on, the delivery of roads is Section 3.0 summarized the strategic, amongst the most remarked achieve- technical and financial assets mobi- ments of the Administration of lized by the Administration through Governor Adams Oshiomhole. Each the early stages of its tenure to achieve year, spending on roads has consumed results. These capabilities have included the lion’s share of development outlays centralizing authority in the project —70% in some years—and recogni- cycle; the enrollment of a wide range of tion of the results features highly in expertise into the EST, and the deploy- the appreciative public perceptions of ment of special advisers, and agencies for this administration’s performance. rapid response and project monitoring. They have included many alternative This report documents the chal- approaches to handle irregular cash lenges faced by a delivery-focused flows while maintaining implementa- Administration in a state recently tion progress, such as the inventive use marred by conflict and chronically low of project revisions, bills of quantity, levels of citizen trust in public office design as you go, and fast-track approv- bearers and authorities. As Section 2.0 als to contract variations and additions. noted, the Administration inherited a Successful leveraging of the private constrained fiscal outlook, a decayed sector was also central. A small army of and underperforming civil bureaucracy consultants boosted the State’s technical that performed according to a mix of and administrative capacity and contrac- formal and informal precepts and norms, tors with the resources and willingness and a pressing need to demonstrate a to deliver higher quality outputs were break from the past by delivering high found. And, finally, the financial sector profile public assets and services. was enrolled by government agencies and contractors to handle risks, issue A precept of the study process was that advance payment guarantees, and so on. it would not seek to pass judgment but rather reflect a reality and present, in Section 4.0, The Project Management a balanced way, the positive attributes Cycle at Work in Edo, showed how the as well as the risks and less desirable capabilities that systems exhibit is always features of real experience. It is a case asymmetric: that is, they perform better where delivery is given a premium, an in some respects than in others. Many iterative process of adapting both formal of these capabilities, in the hands of a and informal systems is employed and different leadership and strategic team leadership focuses on the political, tech- could be used for quite different pur- nical, and financial capabilities needed poses, at odds with the public interest. to tackle the deficits and dysfunctions Thus, this delivery record also presents a that exist and that had been highlighted number of challenges. Inadequate design by the World Bank assessments. This is clearly a feature and something that is no small feat and, as the WDR 2011 the Administration is keen to fix. Gaps notes, such transition strategies are rare. in early stages of the project cycle have impacted quality: for instance, of nine
40 projects where drainage was relevant, and the World Bank has strengthened four were judged to have inadequate significantly and the Administration drainage. Furthermore, the current PFM itself, keenly aware of its own weak- system—as it relates to spending on nesses, is seeking support from a partner capital projects—is transaction-intensive, that it was once most wary of. As a result, and is marked by highly variable unit Edo’s executive has asked the Bank help costs, unpredictable completion times, it move to “the next stage of its develop- and frequent and costly demands on ment;” a stage which moves beyond the the time and attention of senior officials. challenge of immediate delivery and Some features, such as arrangements focuses on the need to institutional- to pay engineering consultants, create ize good pubic sector management to perverse incentives for contractors and ensure the legacy of progress made. The consultants to collude or otherwise act Bank is well placed to now leverage this in ways that constrain the delivery of relationship through lending, policy quality assets. Although procedures and technical assistance to support the have been created to manage the local institutionalization of a delivery record. norms of social settlement, a long his- It is, perhaps, this process and the tory of public disenfranchisement is not sequencing of the Bank’s entry points easily displaced. Relationships between which provides the most relevant lessons contractors and communities are often for the Bank as it prepares to strengthen fraught by contests over each actor’s its innovations at the state level under perceived roles, responsibilities, and its forthcoming Country Program rights around projects where substantial Strategy. Other common factors worth public resources are being visibly spent. bearing in mind as the Bank scales up its engagement around results at the Equally important is transitioning the state level include: the personality and positive elements of these systems to background of the lead reformer (the the next State Governor, and return- Governor); the presence of a credible, ing, over time, these functions and high level technical team—in this case systems to the normal routines of the the EST—with competent experts under civil service. Experience elsewhere contract to the State and close access to shows that these challenges, electoral the Governor; the need to expect change transition and institutionalization, can and transition and to adapt accordingly, be the Achilles’ heel of the kinds of and the challenge of the engagement political and executive systems that for institutions like the Bank when currently operate in Edo State. faced with less than orthodox practices in terms of how design, costing, and But, perhaps most noteworthy is what quantities are handled, how contract the process of elaboration of this report liabilities and cash management are has achieved. In seeking to weigh up done, and how information is man- both the strengths and weaknesses, the aged across a portfolio of investments capabilities and deficits, the relation- that is rapidly growing in complexity. ship between the Edo state authority
Infrastructure Development in Edo State 41 In the case of Edo, based on this joint -- Improved methods for determin- -- Formalizing and regularizing analysis and the strong relationship that ing the most efficient allocation of contract revision procedures, and has developed, the Administration is capital resources, to help disci- reflecting these in infrastructure seeking the Bank’s support at two levels. pline the earlier, more discursive planning, design and management. First it is requesting support on its two process of weighing the political, main policy priorities—commercial economic, and social merits of -- Reducing opportunities for weak agriculture for jobs and education and competing proposed projects. and comprised technical super- skills for youth. Both of these sectors vision as a result of consultant face similar demands: how to select -- Improved revenue forecasting, to fee payments through contractor projects to optimize competing social, lessen, amongst other things, the management systems, and sponsor- economic, and political priorities; how disconnection between annual budget ing arrangements for supervising to procure and supervise contracts; and allocations and actual project spend- engineers to run independent testing how to ensure the flow of funds, certify ing approvals, and to augment efforts (e.g., affiliated with COREN). progress, and make payments in the to manage accumulated liabilities. face of stretched human and financial -- Drawing lessons from the contrac- resources. Each effort will need to -- Project design, including correcting tor community on best practice manage relations with citizens, whether the absence of effective Geographic methods to achieve equitable they are directly connected to specific Information Systems (GIS) capa- and durable ‘community settle- spending initiatives or the general public bilities that constrain the use of ments’, so as to reduce high cost demanding opportunities for input accurate geospatial data in project disruptions to implementation and accountability for results. In other designs and more consistent approach- through ‘gaming’ the system. words, the realities highlighted here es to quantities surveys and costing. about how to organize for results in the -- Consideration of ways to enhance roads sector are in some way or an- -- Increased collection and us- audit processes, including the other directly applicable to development age of information on capital involvement of qualified engineers, spending across this range of priorities. project liabilities to increase the revisiting the role of the Auditor- effectiveness of centralized control General’s Office in pre-audit functions. Second, the Administration is also seek- and planning, while also enhanc- ing the Bank’s support to ensure that its ing cash management decisions. The precise details of such a roadmap “delivery legacy” is embedded in strong will need further discussion, however, institutions and that the many risks are -- Revitalizing the role of the and Bank teams will need to continue addressed and merits embedded. The Fiscal Governance and Project to innovate in order to follow strong Bank has provided Edo with the first Monitoring Office (FGPMO) state leadership and balance incremen- in a programmatic set of development including through developing tal and adaptive approaches that avoid policy loans,9 recognizing the state’s protocols for project oversight, field overly ambitious or prescriptive reforms reformist strength and ability to deliver. asset inspections, and an integrated that are easily mimicked but which The second loan is now under prepara- project management dashboard, such often fail to deliver results.10 In this tion and an investment loan, SEEFOR, as the proposed ‘Edo Eagle Eye’ web sense, the case study is still unfold- is well placed to provide the needed application to support high level ing as the Bank mobilizes to rise to its investment to further this agenda. project management oversight. counterpart’s challenge to “help Edo move to the next level.” The next stage While it is too early to pre-judge the di- -- Expanding public access to project is unlikely to be any simpler and will rection that this will take, consultations designs, implementation schedules, involve intense dialogue where assump- between the study team and Edo offi- contractor and community obliga- tions are challenged, plans adapted and cials during and at the conclusion of this tions and settlement procedures, so a large dose of realism needed as Edo study (September 2013) suggested some as to reduce the volume of unan- tries to prove that good performance obvious areas for support including: ticipated disruptions—and increased can be institutionalized to its citizens. costs—to project implementation.
42 Conclusion and Proposals Infrastructure Development in Edo State 43 Endnotes
1. World Bank (2011). World Development Report 2011: Conflict, Security, and Development. World Bank, Washington, D.C. On generically similar PEFA results in similar contexts, see Porter, D., M. Andrews, C. Wescott and J. Turkewitz (2012). ‘Public Finance Management in Conflicted and Fragile Settings’, International Public Management Journal, Vol. 14 (4): 369-394.
2. Following a series of workshops involving officials from the Governor’s Economic and Strategy Team (EST), key State Ministries, Departments, and Agencies (MDAs), and Edo civil society groups, a method of working was mutually agreed upon before the study was conducted during the first half of 2013. The study team included 13 members from the Niger Delta Social Accountability (NDSA) project, officials and consultants from Edo State MDAs, and members of the Edo State Conference on NGOs (CONGO) and the Niger Delta Citizens and Budget Platform (NDCBP).
3. Niger Delta Social Accountability Project: Building a Legacy through Infrastructure Development: a study of capital spending in Edo State, Nigeria, September 2013.
4. World Bank (2011). World Development Report: Conflict, Security, and Development. World Bank, Washington, D.C.
5. Lewis, P and M Watts (2013). The Politics of Policy Reform in Nigeria (internal working paper), December. Based on eight commissioned case studies.
6. Whitfield, L and O Therkildsen (2011). What Drives States to Support the Development of Productive Sectors?, DIIS Working Paper, Andrews, M. (2013). ‘Who Really Leads Development?’. Working Paper 2013/092. Helsinki, UNU- WIDER.
7. Grindle, M.S., (2011). ‘Governance reform: The new analytics of next steps’, Governance: An International Journal of Policy, Administration and Institutions, 24 (3), pp. 415–418, Andrews, M. (2013). The Limits of Institutional Reform in Development. New York: Cambridge University Press.
8. Fox, J. (2014) Social Accountability: What does the evidence really say?, Global Partnership for Social Accountability, Working Paper Series, World Bank, Washington, D.C.
9. Edo Development Policy Credit is a three year, $225m program, the first year comprising US$75 mill (http://www.worldbank.org/projects/P123353/nigeria-edo- state-first-development-policy-operation.
10. Pritchett, L (2012). Folk and the Formula: Fact and Fiction in Development, Annual WIDER Lecture, Helsinki.
44 Infrastructure Development in Edo State 45