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Copyright @ International Labour Organization 2003First published 2003

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licences issued to them for this purpose.

Edmonds Geoff and Bjrn JohannessenPhotography by Bjrn Johannessen

Building Local Government Capacity for Rural Infrastructure Works

Bangkok, International Labour Office, 2003

Poverty alleviation, rural infrastructure planning, road construction, maintenancedecentralisation, good governance.

ASIST-AP Rural Infrastructure Publication No. 2

ISBN 92-2-113591-8 ILO Cataloguing in Publication Data

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Printed in Thailand


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Building Local Government Capacitfor

Rural Infrastructure Works

Geoff Edmonds

Bjrn Johannessen

International Labour Organisation


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5 Financial Management 765.1 Funding Sources 765.2 Public or Community Works 795.3 Fiscal Management 815.4 Work Incentives 83

6 Training and Technical Assistance 86

6.1 Purpose of Training 866.2 Training Strategy 896.3 Training Needs 906.4 Content of Training 936.5 Training Methods 976.6 Trainers 1006.7 Technical Assistance 103

7 Some Examples 1067.1 Philippines 1067.2 Laos 1107.3 Cambodia 113

8 Lessons Learned 1168.1 Effects of Decentralisation 1168.2 Responsibility with Authority 1188.3 Division of Responsibilities 1188.4 Appropriate Levels of Decentralisation 1198.5 Planning and Identification 120

8.6 Private Sector Participation 1208.7 User Involvement 1218.8 Maintenance 1228.9 Training 1248.10 Potential for Success 124

Table of Contents


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Introduction

here is a general trendworldwide todecentralise govern-

ment functions. This is gener-ally motivated by politicalimperatives, but also has asound basis in the economicrationale of improving theefficiency of the allocation of

resources and the responsive-ness of policy making. It isalso seen as a more effectivemeans to tackle povertyreduction. In addition thereare some key considerations indevelopment terms, these are:

Development should not be atop down process. Instead itshould involve the users


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7Introduction

from the very start of worksidentification to mainte-nance and operation;

Centralised planning andallocation of resources leadsto only a limited flow ofresources to the local level;

Centralised delivery ofprogrammes has not pro-vided a response to localneeds and have been out oftouch with local needs.

Most governments have or arebeing decentralised. Thedegree and form of suchdecentralisation varies fromone country to another. How-ever, one of the main princi-pals and characteristics is thatthe responsibility for thedelivery of government ser-vices is given to the lowestlevel of government that canperform such functions effec-tively and efficiently.

Forms of DecentralisationDeconcentration, often referred to as administrative decentralisation,describes the transfer of specific functions to peripheral agencies of thesame central government institutions (i.e. district offices), without thetransfer of the authority away from the central government with theeffect that local representation and involvement remains limited.Delegation is the assignment of certain functions to other semi-autono-mous or parastatal institutions, which execute them independently,without owing direct responsibility to either local or sectoral, centralgovernment institutions.Devolution refers to the transfer of specific functions to local authori-ties together with the legal basis and required means and capacity.Decentralised agencies in this context would normally have little reli-ance on the central government, except in the form of technical andmanagerial guidelines and procedures, however, leaving selection andprioritisation of works to be decided at local level.Finally, privatisation refers to a complete and final transfer of a pack-age of government services to private organisations. Privatisation isoften a measure which is combined with one of the other forms ofdecentralisation, by limiting its scope to certain task or functions, i.e.technical designs and works implementation.


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Common sense would suggestthat providing the authority

and responsibility toorganisations that are closer tothe eventual beneficiarieswould result in services beingprovided that are more relatedto peoples needs and thatemphasise the use of localskills and resources. However,studies on the decentralisationprocess have highlightedseveral constraints to effectivedecentralisation: decentralisation is a dy-

namic process rather thanany fixed form of institu-tional arrangement and itscharacteristics are subjectto change depending on thegovernment in power and

the popular trends, the difficulty of matching

authority and accountabilityby clearly defining who, andwhich levels of government,is responsible for what,

insufficient capacity at thedesignated level ofdecentralisation,

replacing centralised politi-cal interference with a lackof transparency at the locallevel.

A word of caution is alsonecessary here. Decentralisedgovernance may be more likelyto adopt pro-poor policies.However, local elites can bevery successful in taking undueadvantage from directingexpenditures and taxationpolicies. There is as yet littlehard evidence to suggest that

there is a systematic relation-ship between decentralisation,economic development and

poverty reduction. Neverthe-less, there is the potential, andsome lessons have alreadybeen learned as to howdecentralisation can providethe effective mechanisms forpoverty targeting and the morerational use of resources forthe provision of sustainablerural infrastructure services.

The major constraints toachieving this potential areoften recognised as being:

inadequate financial manage-ment and control systems,

inadequate implementationcapacity at local level,

unfamiliarity with proactive,participatory planningsystems,

inappropriate procurementand contract administration


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9Introduction

procedures, and inadequate resources for

and limited understanding ofeffective maintenanceprocedures.

Tools Needed at Local LevelOne of the most importanttasks of local governmentauthorities is to provide andmaintain rural infrastructure.There are a number of keyfeatures which are required inorder to effectively plan andimplement such works withsustainable results. Theseinclude efficient planning tools,appropriate choice of technol-ogy, identification of correctinterventions, i.e. meeting userperformance requirements,

adequate works supervision andmanagement, timely andsufficient levels of funding andothers. All these issues need tobe considered when establish-ing an effective organisationalstructure, at the same time asensuring the participation ofthe future users, local authori-ties and involving the localconstruction industry.

Experience from rural infra-structure developmentprogrammes clearly shows thatthere is a need for a compre-hensive approach to buildingcapacity at local level for theplanning, works implementa-tion and supervision, as well asmaintenance of the createdassets in order for these typeof interventions to be effectiveand sustainable.

The following chapters de-scribe some of the key

organisational features re-quired in order to achievesuccessful and sustainableoutputs in large-scale publicinfrastructure developmentprogrammes. The issueshighlighted are relevant toboth long-term governmentinvestment programmes aswell as for the appropriatedesign of specific developmentprojects of a more limited timeframe (i.e. donor fundedprojects).

Although there is a growingunderstanding among govern-ments and key players in thissector for the importance of

placing local authorities in thedrivers seat, the changesrequired in many instancesmay appear ambitious andfraught with a high degree ofrisk. These are often the


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sentiments experienced at thestart of any initiative to

promote the role of localgovernment institutions.However, experience hasclearly shown that if the localinstitutions are provided with

the means to handle newresponsibilities, it is often

impressive to see how wellthey respond to their newduties.

Match Capacity Building withProgramme RequirementsFinally, it is important toemphasise that decentralisationand capacity building at locallevel should be closely linked tothe management requirementsof local government. Thisimplies that capacity buildingshould be carefully measuredout to meet the envisagedworks programmes in theimmediate future. As part ofthis, effective decentralisationneeds to be developed to-gether with the involvement ofthe local construction industry.

The development activitiesrequired to reach the objec-


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tives of an efficient ruralinfrastructure programme will

require resources in the formof training, technical assis-tance, strengthening of man-agement structures anddevelopment and introductionof new administrative andmanagerial procedures. Thiswill demand considerableresources, and the mobilisationand use of these technicalassistance resources need tobe justified.

There is a need for a controlledand measured approach tothese tasks. The requiredcapacity needs to be carefullyplanned in relation to theenvisaged works. Equally,

capacity development shouldnot be planned in relation to asingle works programme in

isolation but cater for all therequirements which a local

authority will need to dealwith in the immediate as wellas the more distant future.

This is a strong argumentagainst the creation of tempo-rary project implementationoffices which do not form partof the permanent establish-ment of local governmentorganisations. Capacityestablished at local levelshould be developed on asustainable basis beyond theduration of individualprojects. It is more effectiveto build up the capacity withinthe existing structures of localgovernment and to the extent

possible utilise the existingestablishment.


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Chapter 1

Rural infrastructure develop-ment works often consist of alarge number of comparativelysmall sub-projects dispersedover a geographically large

area. It is well known thatwork programmes of suchnature are difficult to super-vise due to the demandinglogistics requirements. Forthis reason, agencies such asroad administrations, publicworks ministries, irrigationdepartments have establisheddepots and offices at regional,provincial and district levels.

In the past, works were nor-mally carried out throughforce-account operations or byengaging large-scale contrac-tors from the capital cities,relying on staff from centralgovernment agencies forsupervision and management.

Recent trends to decentralisethis authority to local govern-ments, and move from force

Opportunities and Challenges

1.1 General


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1

IRAP is a multi-sectoral application of a simple planningtool designed to reinforce government thrusts ondecentralisation, capacity building, people participationand the development of systems and procedures to guidelocal level investments in infrastructure.

account operations to relyingon the private sector for workexecution, have led to ademand for a complete newset of management arrange-ments for the construction andmaintenance of rural infra-structure.

Work carried out by the ILO,amongst others, to provide acomprehensive approach tocapacity building for improvedservice delivery, indicate thatthe potential exists to intro-duce a framework for infra-structure development whichboth responds to the actualneeds of the rural populationand can be effectively adminis-tered by local officials.

A key factor in local levelinvolvement is to ensure thatthe priorities and needs of thefuture users are well reflectedin the development plans.Vesting the authority to definework programmes in localauthorities, allows all types ofinfrastructure such as roads,clinics, schools, irrigation,water supply schemes to be

planned applying an integratedapproach in which variousinfrastructure developmentinitiatives are seen in relationto each other. The toolsdeveloped by the ILO forIntegrated Rural AccessibilityPlanning (IRAP) clearly demon-strate how effective planning

can be carried out at locallevel 1 .

In terms of technology choice,experience show that theimplementation of ruralinfrastructure works can bemore effectively carried outrelying on locally availableresources. Such resourcesinclude local materials, skillsand personnel provided bylocal builders, smaller con-struction firms located in thevicinity of the works locationsand local government agencieswith technical and managerialskills.



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Opportunities: Enhanced potential for participation

in planning and supervision fromfuture users of the assets,

Improved scope for multi-sectoralplanning,

Concentration on the use of localresources and local solutions,

Development of local industriesthrough increased market prospects,

Local government capacity developedthrough increased responsibilitiesand work programmes,

Greater sense of ownership sinceinvestment priorities are defined inconsultation with users.

Challenges: Improve financial management

systems, Develop implementation capacity at

local level, Introduce proactive, participatory

planning systems, Establish appropriate procurement

and contract management proce-dures,

Identify resources for and increaseunderstanding of effective mainte-nance,

Implement effective human resourcedevelopment programme,

Provide purpose oriented skillstraining programme,

Secure sufficient funding, enablinglocal authorities to meet their newresponsibilities.

Strengths: Decisions taken at local level

by user representatives, Funds used for locally defined

needs, Increased opportunity for

community involvement, Decentralised supervision

allowing for regular inspection

of work sites and improvedprogress monitoring, User involvement in

monitoring of performance.

Weaknesses: Lack of clarity of

decentralisation oftenrelated to central agenciesattempting to retain authority,

Vested interest from localpoliticians, Lack of capacity, in terms of

technical and managerialskills,

Lack of qualified staff, forwork design and supervision,accounting, overall planningand management,

Lack of funding due to poorlocal taxation resource base

and limited funds beingallocated by centralauthorities.

Furthermore, all createdinfrastructure assets require a

sound maintenance manage-ment system to safeguard theinvestments carried out duringthe development phase. Byplacing the maintenance underthe supervision of local au-thorities, which are account-

able to the real users of theinfrastructure, the concern for

maintaining the created assetsmay be safeguarded.

The pros and cons ofdecentralising authority, itsopportunities and challenges aresummarised in the table below.


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Decentralisation of authorityhas become an increasinglyimportant issue in rural dev-elopment programmes in recentyears. This is most clearly seenin the number of communityparticipation programmeswhere the local villages becomethe central focus. The reasonsfor selecting the lowest levelsof administration is obviously tocreate the highest degree ofinvolvement and commitmentfrom the end users.

While local participation canbe secured through differentforms and mechanisms at the

various stages of the projectcycle, there are a number ofrelated opportunities whichcan be exploited in order tosecure overall developmentobjectives on a sustainablebasis.

(i) Integrated Planning ApproachWhen rural infrastructure isplanned as part of a centralgovernment programme, toooften this is done mainly inrelation to the development ofthe sub-sector alone. Vestingthe authority to define workprogrammes in local authori-ties allows all types of

infrastructure, such as roads,clinics, schools, irrigation,water supply schemes, to beplanned in relation to theimplementation of other

infrastructure developments,and may achieve a betterreflection of the real demandsof the local communities.

Involving local communities inthe decision making processcan be extended to all stagesof the development process.In addition to the identificationand selection process, localinvolvement during the con-struction and eventually duringthe operation and maintenancestages, may result in improvedtransparency in managementof funds.

Local participation in the finalstage of maintenance andoperation of the created assetsmay provide the only feasiblesolution to sustaining theinfrastructure investments.

(ii) Funds Used for Locally Defined ProblemsFunds for rural infrastructureallocated by central agenciestend to be spent in accordancewith defined targets or normsin a particular sector. More-over the level of funding isdefined in accordance with thecentral line agencies budgets.When funds are disbursed atthe local level they (i) relate

much more to actual needs and(ii) budget allocations are seenin relation to the overallbudget and works programmeof the local administration.


1.2 Opportunities


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(iii) Greater Opportunity for Community Involvement

Since the local authority iscloser to the communities,there is the potential for amore significant interactionwith the communities. On theone hand, the local authority isable to more effectivelypromote community involve-ment, and on the other hand,the communities can moreeasily demand such involve-ment. Beneficiaries can have agreater involvement andinfluence on the planning,technical choices, methods ofimplementation, operation andmaintenance of the project.

In sectors such as water supply,

sanitation and irrigation, directcommunity involvementthrough user groups is essentialfor the effective maintenanceand operation of the infrastruc-ture assets. However, for thisto take place in an effectiveand timely manner, there isoften a demand for at leastsome limited external assis-tance. This may be in the formof financial or technical assis-tance or in terms of facilitatingthe formation or sustaining themobilisation of communityresources to maintain andoperate. Local governmentorganisations equipped with therequired resources are in a wellplaced position to provide suchbackup services.

(iv) Decentralised SupervisionDecentralisation is particularly

important in relation to ruralinfrastructure works, for which

the management resources ofcentral government depart-ments are seldom sufficient toprovide proper supervision.

Central agencies are oftenfraught with similar capacityproblems as local authorities,such as lack of staff, transportand other resources to be ableto cover the management andsupervision of a rural infra-structure works programme.This problem is made worse bythe long traveling distancesfrom their central and regionaloffices to the location of thework sites.

(v) User Involvement in MonitoringGenuine decentralisationenables local organisations toexert pressure and thereforeto defend their projects betterbecause, at that level, thenegotiating partners and theneeds of the population arebetter known. The main issuehere is that local authoritiesare held responsible to theusers for their actions. Whenworks are managed by person-nel who report to a centralagency, this pressure from thelocal population is diluted,since central agencies andtheir staff take their ordersfrom superiors situated in thecapital or provincial headquar-ters and are not directlyaccountable to the end users ofthe created assets.


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The importance of involvinglocal communities in ruralinfrastructure programmes hasreceived a growing acceptance- the main reason being thatthe sustainability of the infra-structure investments can onlybe secured by involving theusers from the very start whenworks priorities are identified.Local participation can besecured through various mecha-nisms, depending on the type ofworks, and can take differentforms at the various stages ofproject implementation.

The classical approach to

secure local participation inrural infrastructure develop-ment has been through ahierarchy of developmentcommittees at village, districtand provincial levels. Theseorganisations can secure theappropriate representation ofboth political and technicalbodies as well as particularuser groups. In the past, theseinstitutions have played acentral role in the identifica-tion and selection of individualdevelopment projects, whichform the basis for the infra-structure developmentprogrammes of the district andprovincial authorities.

A major short-coming with thisarrangement has been the lackof clear criteria and planningguidelines, with the result that

the development committeeshave often produced wish listswith limited cross-sectoralintegration. For this reason,the introduction of integrated

rural accessibility planning(IRAP) has provided a signifi-cant improvement in thequality of local level planning. 2

A second issue is that develop-ment committees are often onlyinvolved in the initial stages ofthe development cycle, i.e.during the identification andselection stages. In most cases,these committees do not playany significant role during theworks implementation, mainte-nance and operation stages.

Community involvement inrural infrastructure workscovers a wide spectre ofparticipatory mechanisms.The most common arrange-ments are:


1.3 Community Participation

2

Ref. Chapter 2 Local Level Infrastructure Planning


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involving the communities inthe formulation of develop-

ment plans and budgets, local communities providing

some or all resourcesrequired for the works in theform of providing their ownlabour, tools, materials andcash.

local communities or usergroups take charge of theworks implementation,either directly by organisingthemselves into work groupsor by engaging a localcontractor,

local communities or spe-cific groups are contractedto carry out works under thesupervision of local govern-ment authorities,

local communities monitorthe works carried out by

local government andprivate contractors.

The appropriate form ofcommunity participationdepends on the type of worksbeing carried out, and thesolutions found to be effectivein one sector may not neces-sarily be appropriate to applyin other sectors. However, asthe main users of the infra-structure facilities, it isimportant that they areinvolved as part of the man-agement process from theidentification stage throughoutto the maintenance andoperation stages.


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vested in a body which doesnot report to the real users of

the assets, but instead reportsto central government bodieswhich really have no genuineinterest in the operation,maintenance and usage of theinfrastructure assets.

Political InterferenceWhen authority is given tolocal authorities it is oftenargued that there is thepotential for greater interfer-ence from local politicians inthe way that the funds arespent. For this reason, it isimportant that (i) clear plan-ning procedures and worksprioritisation criteria areproperly instituted, and that

(ii) community participation isinstituted as part of theplanning process.

It is important to bear in mindthat local participation inplanning also includes theinvolvement of local politi-cians. Rather than regardingthis as a potential negative

impact, the interest of thelocal politicians should be

channelled into a structuredplanning system in whichtransparency and decisionmaking is secured in an orderlymanner. In achieving this, thepower and influence of localpoliticians can be utilised infavour of local level infrastruc-ture development programmes,encouraging them to use theirpower and influence to lobbyfor further funding and supportto the local authorities.

Lack of CapacityThis is an issue too often usedas an argument against involv-ing local authorities, instead oftreating it as a challenge and

dealing with the capacitydevelopment requirements itwarrants. Whilst there is oftena misconception regarding thelevel of capacity within localauthorities, it is in most casesproven successful to vestgreater responsibility withlocal managers, administra-tors, planners and engineers.This in turn means that theymust have the means to beable to respond.

Lack of capacity is often citedas the reason for notdecentralising. Equally, localauthorities often underesti-mate what is involved in takingon this responsibility. With acomprehensive approach toinstitutional development andtraining, the shortcomings oflocal capacity can be rectified.


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It is also important to ensurethat authority is vested at theappropriate levels of localgovernment. The followingfigure lists some key tasks andresponsibilities, which need tobe clearly allocated at variouslevels of the hierarchy withinthe relevant authorities atnational, provincial, districtand commune level. As seenfrom the table below, thereare a number of activitieswhich need to be dealt with atlocal level, and equally thereare other tasks which are moreappropriately addressed bycentral authorities.

The division of responsibilitiesshown in this table varies fromone country to another and


depends on the type of worksand the conditions in which theworks are carried out. Despitethis, there are certain trendswhich can be found in mostrural infrastructure develop-ment programmes.

Data CollectionObviously, all data collection,as regards to future performancerequirements of the improvedassets, must be carried out atdistrict and village level. Theselevels of government will alsobe in the best position tolocate and collect the relevantdata as well as placing this

information in the context ofthe overall development plansof the communities. Planningis carried out at all levels,

Level National Provincial District Commune

Data Collection

Planning Budgeting

Plan approval

Budget approval

Source of funds

Standard settingAuthority to classify

Works Implementation

Supervision

MaintenanceAward contracts

Monitoring

Accounting

1.5 Appropriate Levels of Capacity


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enue from local taxes, userfees, licences, etc. will indi-

cate the appropriate level ofauthority and responsibilitiesfor infrastructure improvementand maintenance works.

When the district or communeauthorities generate their ownincome, they also have to carryout the final approval of howthe funds are utilised. Whenfunds are received from higherlevels in this hierarchy, it isnormally required to obtainsome form of general approvalof annual work programmesafter they have been finalisedand agreed upon by localauthorities. In this context, isimportant that the central

authorities approve the overallprogrammes submitted by localgovernment against a set oftransparent and clear implemen-tation regulations and instruc-tions. This does normally notinvolve any changes to thepriorities made at local level.

Standard SettingStandard setting is a taskcommonly vested with centralauthorities. The main reason

however, it is important that italso includes the end users at

commune and village level,thereby securing the concernsand priorities of the actual endusers of the infrastructureassets.

Budgeting and PlanningBudgeting and planning approv-als are integral parts of theprogramming process andtherefore needs to involve thesame levels of authority as theplanning exercise. Dependingon the size of the local govern-ment institutions and thepopulation covered, govern-ments must decide to vestfinancial management authorityat the appropriate levels. In

countries where communeadministrations cover a verysmall geographical area andlimited population, financingand budgeting capacity isplaced at a higher level i.e.district level. Other places,with denser populations orwhere communes cover a largearea, it would be more appro-priate to vest such authoritywith the communes. Equally,the authority to collect rev-


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for this is to avoid duplicationof works as well as utilising a

centrally positioned institutionto collect and disseminateexamples of good practices andtechnical solutions. Equally, byrelying on one national re-search organisation/ labora-tory, it may be possible tomobilise sufficient funding toaddress common technicalissues in a nationwideprogramme. Despite this, it isimportant that the standardsare developed on the basis ofthe initial experience, which isharvested at local level wherethe physical works take place.

Authority to ClassifyAuthority to classify is directly

related to the ownership of thecompleted assets and moreimportantly the maintenanceand operation responsibilities.As a general rule, it is impor-tant to respect the fact thatperceived responsibilities formaintenance are very closelylinked to the understanding ofownership.

The adjacent box describes thecommon features of a roadclassification system. Similararrangements can be found forother types of infrastructuresuch as markets, schools,health facilities and watersupply.

What is important in relationto sustainable provision of allthese types of services, is toestablish effective mecha-

nisms and identify reliablesources of funding, allowingthe various levels of govern-ment to effectively operateand maintain their assets. Itwould appear unreasonable to

construct or improve someform of infrastructure withouthaving clarified the ownershipof the assets and thusagreeing to who is in charge ofthe maintenance.

Implementation andSupervision AuthorityWith the increased involvementof the private constructionindustry, the crucial question isrelated to who supervises andmanages the contractorsengaged for carrying out theworks. This also includes theissue of authority to awardcontracts, and more impor-tantly who inspects and paysthe contractors for completedworks.

This is where the strongestsentiments are found. It also


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clearly determines to whatextent real decentralisation

has actually taken place. Veryoften this issue is decided on thebasis of what the local authori-ties can do in their currentcapacity rather than asking themore crucial question ofwhether this responsibility reallyneeds to be placed withcentral authorities. In manycases, it is clear that centralauthorities are not in a positionto handle the responsibility ofrural infrastructure provision.

It is also evident that a cen-trally based agency will neverhave sufficient capacity to dealwith the direct managementand supervision of a geographi-

cally dispersed worksprogramme. It would there-fore be logical to look for othermore appropriate institutionsto handle this managementtask. Considering the fact that(i) most local governmentauthorities already carry outsome rural infrastructureworks, (ii) they are located inclose vicinity of the work sites,and (iii) they closely interactwith the end users, it seemsnatural to increase theircapacity to also deal withlarger programmes.

A common feature of ruralinfrastructure works is that itmost often consists of simplestructures and standard workmethods and technology.Although rural infrastructureworks programmes as a whole

Classification of Roads

The ownership and responsibility for thepublic road network is in most countriesdefined by law through a national roadact with ministerial regulations anddirectives derived from this legislation.In addition to the road act, there may belegal provisions related to rural andmunicipal roads found in laws pertainingto local government authorities. This,legal framework normally spells out thedivision of responsibility for the

operation and maintenance of the varioustypes of roads in the country.Road classifications normally distinguishbetween national, provincial, district andvillage/commune roads. In addition,roads can be classified as municipal roadsand streets, roads in national parks andforest reserves, military roads, privateroads, etc. What is important to note isthat the classification primarily relates totheir function and to who is in charge of

these roads-maintaining and not thetechnical standards applied.Classification of national roads is com-monly vested with the national assemblyor devolved to a central road worksauthority or public works department.Equally, provincial roads often sort underthe same overall category, only formingthe secondary part of the national roadnetwork.

Rural roads is a general reference tothe remaining part of the public network,covering access to district centres,communes and villages. Whilst thenational and provincial road networks arethe main providers of mobility, the ruralroad network provides the basic accessfor the rural population to economic andsocial services (i.e. markets, health,schools, information). Through recenttrends of decentralisation, the

responsibility for rural road improvementand maintenance has been left with localgovernment. This also implies that localgovernment has been given the authorityto define the extent of this network.


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can be equally large as otherpublic works schemes (i.e.

hydropower, airports, high-ways), each sub-project isrelatively small, requiringsimple designs which can oftenbe standardised. Design andimplementation of such workscan be carried out adequatelyby a team of district engineersand technicians. There isusually no need for specialistengineering inputs. In excep-tional cases, where specialistinputs are required, these typeof skills could be obtained fromprivate consulting firms orseconded from a centralagency.

Equally, if the works contracts

are packaged into appropriatesizes, ideally to the size of theindividual sub-projects, it ispossible to utilise the localconstruction industry, based inthe districts and provinceswhere the works are located.Contracts of this size can easilybe handled by local authorities.

Award ContractsThe authority to award con-tracts is in most contractmanagement systems linked tothe party who actually financesthe works, i.e. the Client. Theclient may nominate a thirdparty for supervision of works,however, the financial obliga-tions, as spelled out in thegeneral conditions of a con-tract, would normally remainwith the client. When manag-ing a public works contract,

the client would be the govern-ment agency who has beenvested with the responsibilityof providing this particularform of infrastructure.

The authority to award con-tracts is therefore linked to

financial authority. As men-tioned earlier, realdecentralisation would involvevesting financial authority tolocal government, including thetask of awarding contracts. Thisalso includes the authority tocarry out bid evaluation andfinal selection, instead of relyingon some central tender board.

From an ownership point ofview, rural infrastructurerepresents public assets underthe responsibility of localgovernment. This basicallyimplies that the client for anyimprovement or maintenanceworks of this infrastructurewould be the local authorities.

However, the sentiments atcentral level against devolvingthis authority to local govern-



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ment is somewhat justifiedwhen the capacity at local

level is limited. The transferof authority needs to becarried out hand in hand withdeveloping sufficient capacitywithin local government tomanage the works. Thisinvolves vital issues such assound and transparent prac-tices for bid competition andpayment of works, adequatesupervision capacity, expedientcash flow arrangements,acceptable accounting proce-dures and, finally, efficientmechanisms for maintenanceof the improved assets.

MonitoringMonitoring deals with two

major issues, first the effectiveutilisation of the resourcesallocated to the infrastructuredevelopment works, andsecondly the effect of theinterventions in which theinvestments are placed. Thereis a demand for monitoring theuse of the resources to ensure

a certain level of transparencyand good governance. Equally,

the physical works monitoringforms the basis for futureprogramming of remaining worksas well as influencing program-ming and planning decisions inother related infrastructureworks projects andprogrammes. For these rea-sons, there is a demand formonitoring and reporting backto all the levels of governmentinvolved in the planning andbudgeting activities.

AccountingAccounting is an activity whichneeds to take place at thelevel at which funds are beingspent. This may seem obvious,

however in many programmesthe importance of this issue isunderestimated. With thisresponsibility follows regularauditing which needs to becarried out by independentorganisations preferablyrecruited from the privatesector.


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27Opportunities and Challenges

In large scale programmes,there is a demand for coordi-nation of the works carried outat local level. Various sourcesof funding, need to be coordi-nated and the monitoring ofcosts and progress needs to becompiled in overviews coveringthe sector(s) as a whole.Equally, national targets interms of overall developmentobjectives and coverage ofcertain services will requiresome form of coordination atcentral level.

The management requirementsat central level are essentiallyof overall nature. It is impor-tant that the division ofresponsibilities between thecentre and local government isclear. While local authoritiestake full charge of worksimplementation, the centrewould deal with overall coordi-nation, mobilisation of fundsand monitoring. The followingis a list of some tasks to becarried out by the centre:

liaison with internal finan-cial authorities and donorson all financial policies,

budgetary and financialmonitoring of expenditure,

developing technicalstandards, work specifica-tions and administrativeprocedures,

standardising contractdocuments and contractingprocedures,

approving and forwarding

plans and reports to higherauthorities, coordination with other

government departments, training needs surveys and

coordination of trainingprogrammes,

bulk procurement of equip-ment, tools and materials,

general monitoring of fieldwork performance andresolving major and commonproblems,

monitoring of adherence andeffectiveness of workmethods, managementsystems and procedures.

Finally, the centre may also

facilitate the provision oftraining and assist in theconduct of the required stafftraining. Although training forrural infrastructure works is in

1.6 The Role of the Centre:

Programme Coordination


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most cases best organised atlocal level, resources, in termsof training capacity, such asinstructors, training materials,course programmes and other

training tools, are moreeffectively sourced from anational training facility.

Coordination of FinancialManagementA considerable portion offunding for rural infrastructureworks origins from the centre.It may be sources obtainedfrom regular governmentbudgets, dedicated funds, suchas a road maintenance fund,donor assistance or loans frominternational developmentbanks. These funds are in mostcases managed by a financeministry before they aredisbursed to the relevantagencies at central and locallevel. Some countries willdecide the distribution of fundsto the various provinces ordistricts within a certain sector

as part of the national budget-ing exercise. Resources for

road maintenance may origi-nate from a road fund man-aged by an independent roadfund board. External donorsmay wish to invest their fundsin certain parts of the countryaccording to an agreed distri-bution formula. In all thesecases there is a demand for acentral agency which ensuresthat funds are disbursed to thelocal agencies at regularintervals and safeguarding thatthere are no cash flow distor-tions which may hamper theagreed work programmes.

Budgeting and WorkProgramming

Annual work programmes andbudgets form the basis forwhich funds disbursements aremade. Local level worksagencies are normally requiredto submit their workprogrammes as part of theannual programming andbudgeting exercise in order toobtain funds from centralauthorities. Distributionmodes may differ depending onthe source of funding. Mainte-nance funding would naturallybe based on the level of assetsalready existing in a maintain-able condition under thesupervision of each localgovernment authority.

Donor CoordinationOne of the most challengingtasks for central authorities isto create one uniform


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programme based on differentfunding sources. The donor

community has traditionallytaken particular interest insupporting governments indeveloping infrastructure inrural areas. Donors haveprovided new innovativeapproaches to the effectiveprovision and maintenance ofrural infrastructure. However,their involvement has oftenlead to a conflict betweentheir ideas and those professedby the government or by otherdonors involved in the same orsimilar programmes. In somecases, it may involve suchsimple issues as agreeing onthe basic technical standardsapplied, and in other instances

more complicated issues suchas the choice of procurement

procedures.

A common feature in a numberof donor funded projects hasbeen that they are organisedon an individual stand-alonebasis with very limited integra-tion into the existing structuresand institutions found atcentral and local level. Ratherthan feeding into an overallframework defined by thegovernment, the individualprojects have found their ownoperating framework which isin many cases outside theregular governmentorganisations.

Projects with external fundingfollow tedious procedures fortheir conception, appraisal tofinal approval, before workscan actually commence.During this process, it isimportant that central authori-ties make sure that theseprojects have a home withinthe existing structures, or, ifthese structures are still notfully developed, the projectscontribute to building thesepermanent structures, ratherthan establishing temporaryproject implementation unitswhere capacity is developedtemporarily merely for theduration of the project.

Ideally, all donor fundedinitiatives should be fed intoan overall government devel-opment programme. During


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appraisal of new projects, it isimportant for central authori-

ties to explain the currentsituation and how rural infra-structure development worksare organised and carried outin the country. If the donorwishes to invest its resourcesmainly in capacity building,then the appraisal exerciseshould assess the effectivenessof the current organisation andsee how it can be improvedrather than seeking alternativeoutside mechanisms forproviding assistance.

With proper donor coordina-tion at central level, thegovernment can channel theparticular concerns of various

donors to the different compo-nents of a uniform nationalinfrastructure worksprogramme. As an example,funding from one particular aidagency could focus on training,another on administration andfinance, and others on capitalassistance.

The advantages of this type ofcoordination are obvious. Itallows for uniform proceduresfor contracts management,

employment conditions,planning, budgeting, funds

allocation and transfers,auditing, monitoring andreporting. It also allows forthe use of standardised techni-cal specifications and workmethods.

A standardised system will alsoallow the government tocoordinate all training carriedout. In a programme withstandardised procedures andwork methods, it is possible toprovide a uniform trainingprogramme which can servicethe demands of all the projects.

Such efforts will also improvethe efficiency of the overall

management and monitoring ofworks. It may also streamlineproject negotiations betweenthe government and donorswhen a standard mode ofimplementation has beenestablished. Negotiations withdonors can then concentrateon which part of a nationalprogramme they wish tosupport (geographical area oractivity, i.e. training, technicalassistance, equipment, physi-cal works, etc).

When the Philippines Decentralisation Act was passed in 1991, theDepartment of Interior and Local Government immediately set upthe Local Government Academy which was charged with providing

training courses on all aspects of local government to the newlyempowered local government units. Courses were provided both atthe centre and also in the provinces. The Academy now has a widerange of training materials including modules on the implementa-tion of civil works at the local level.


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Monitoring and Reporting

Monitoring and reporting formthe basis for quality assuranceand cost control in all worksprogrammes. Reporting ofcompleted works is alsorequired in order to updateasset inventories. Further-more, the reporting of quanti-ties and costs of completedworks are important inputs tothe planning system. Finally,the monitoring and reportingsystem is essential to maintaintransparency and providefeedback to funding agenciesand users to ensure andconfirm that funds are beingspent according to theirintended purpose.

In many programmes, separatereporting is required back toeach of the individual fundingagencies, i.e. donors, develop-

ment banks, special govern-

ment programmes, etc. Al-though various agencies mayhave different reportingrequirements, it is importantthat the monitoring andreporting system is uniformand applied in the samemanner by all parties involved.If special reports are required,these should be compiled onthe basis of the standardinformation submitted by thelocal authorities. A centralagency will need to compilereports from all the localauthorities to form a compre-hensive report, covering theentire country, a certainregion, or works financed by aparticular funding source.

TrainingTraining is often an up-frontactivity which needs to be


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carried out in advance of thetime when the skills are to beapplied. This implies that

when a new programme islaunched, the required staffneed first to be identified sospecific training needs can beestablished and appropriatetraining programmes developedand conducted. When the workscommence, the staff shouldalready have acquired thenecessary skills and be ready toput them into practice.

Large scale works programmesoften involve a large number oftechnical, financial and admin-istrative staff, and in manycases, the demand is greaterthan the training capacity. Acentral body will thereforeneed to prioritise and selectthe staff for training where theeffects of the training providedwill have the greatest effect.

If a new works programme isplanned for a certain region, itwould be natural to prioritise

the staff from the local au-thorities in this area in thenext training courses. Equally,if new procedures and workmethods are introduced, it isimportant to allocate trainingresources for introducing andfirmly establishing the newtechnology.

A centralised training capacityalso offers the government anopportunity to pool trainingresources to various compo-nents of a large-scaleprogramme. When newfunding is secured from exter-nal sources, such as the donorcommunity, it is possible tostreamline training activitiesby involving an already existingtraining institution. Directingall training needs through one


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33

institution is an effective wayof strengthening the in-countrytraining capacity.

Central OrganisationThe size of the centralorganisation is dependent onthe magnitude of theprogrammes. They may consistof units based in a generalworks department or located inspecialised agencies dealingwith a particular type ofinfrastructure. In most cases,they will need to deal with all

the above mentioned activitiesto a lesser or larger extent.

The figure below shows acentral unit which was estab-lished for a rural infrastructureproject funded by the AsianDevelopment Bank. Theimportant point here was thatby the end of the project, theorganisation was incorporatedinto the regular structure ofthe host ministry still follow-ing the same delineation ofresponsibilities.


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35

Nevertheless, the result of thissectoral approach has beenthat water supply, irrigation,roads and other infrastructurehave tended to be planned inisolation from each other, or atbest within the confines ofcentralised, sectoral planning.

In mitigation, there is usuallysome form of central planningagency, whose role it is toensure that sectoral plans donot contradict or duplicateeach other.

This conventional approach toinfrastructure planning oftentends to be top down and nonparticipatory. In general, thishas not presented problems inrelation to major infrastruc-ture programmes, especiallythose of general public utility.However, this approach isneither appropriate nor suc-cessful for rural infrastructure.There are a variety of reasonsfor this, as outlined below.

In the first place, the fundsavailable for rural roads,health clinics, primary schools

and local markets are, and willalways be, limited. Indeed,much of the basis for planningis that needs always outstripfunding, irrespective of thelevel of development. Plan-ning, therefore, involvesranking priorities among

candidate projects and amongthe benefits each may bring,then making decisions amongand between them. Thus, thenumber and quality of schoolsand health centres have to becompared with levels of roadaccess to assess how much willbe allocated to each. Not onlythis, but at local level there isoften quite close interdepen-dence among different types ofinfrastructure. For example,there may be a choice betweenproviding road access to anexisting school or buildingmore schools.

Secondly, the location ofinfrastructure calls for closeconsultation with those ex-pected to benefit. This is not,or not only, in the interests ofequity, accountability and

Local Level Infrastructure Planning


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36

democracy. It is also becausethe operation and maintenanceof many local-level facilities

often depend on contributions- in cash and/or in kind - fromthe beneficiaries.

Thirdly, resources are usuallylimited even for the planningand design, let alone theconstruction of rural infra-structure. Value for money inplanning and design can bestbe obtained by drawing onlocal knowledge and insights asinputs to the planning process.

Fourthly, planning for manytypes of rural infrastructureinvolves responding to botheconomic and social needs. Atop-down approach concentrat-ing on economic criteria aloneis out of place. Economic

analysis tends to concentrateon concrete outputs whilst theequally important social

services require a concentra-tion on people. Thus, econom-ics is of critical importance inmaking decisions on thephysical design of the fabric ofa health centre. But ordinarypeople need to have a say inwhere a new health centreshould best be located andwhat type of service they wantit to provide. In the latteraspect of the planning process,ideas about the likely return oninvestment will have littlemeaning. Irrigation schemesidentified on the basis ofpotential agricultural increaseswould also depend on properpricing policies and transportservices being available.


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Over the years, several proce-dures for both identificationand selection of rural develop-ment works have been devel-oped and tested. These vary incomplexity according to thefunction that the improvedinfrastructure is serving. Whatbecomes clear, however, is thatto ensure effective participa-tion, the procedures need to besimple yet efficient and shouldnot be resource intensive.

Identification and SelectionRural infrastructure construc-tion or maintenance works are

not selected in an arbitrarymanner. Whilst eachprogramme of works may haveits own tailor-made identifica-tion and selection procedures,the process is similar in mostcases and passes through anumber of stages:

(i) Initial IdentificationThe initial identification step isthe preparation of a list ofprojects proposed to beconstructed/rehabilitated/maintained. This initial listshould be prepared with localcommunity involvement. Inmany places, the villagedevelopment committees will

prepare the first set of re-quests, which are then for-warded through the communeor district to the appropriatelevel of administration wherefunds and implementationcapacity are found to actuallycarry out the works. Gener-ally, the selected projectsshould meet certain pre-determined criteria, whichhave been set by theprogramme management incollaboration with planningand funding authorities.

The projects identified are

then forwarded to the appro-priate level of authority (i.e. arural development committee)for further discussions in termsof overall district and provincepriorities and compared withthe need for other develop-ment projects. Finally, the listwith the selected projects

need to be assessed by therelevant technical agency.

(ii) ScreeningThe technical agency usuallycarries out the screening ofidentified projects in order todisqualify those projects thatdo not meet certain criteria,are not technically or economi-


2.2 Local Level Planning Procedures


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38

cally feasible, or are not likelyto have the expected impact.

These assessments are oftencarried out on the basis ofrough estimates of costs andother resource requirements.

It is important to note that thetechnical agency merelyprovides information as regardsto costs and feasibility of thevarious proposed projects, andon this basis determineswhether the projects meetcertain agreed selectioncriteria. The final decision toplace a project on a list forfurther analysis is taken by theappropriate developmentcommittee.

(iii) AppraisalAppraisal is a more detailedassessment of the justificationfor supporting an investment ina certain development project.Often, a cost benefit analysis iscarried out as part of theappraisal. If this is done, thenconstruction costs need to beestimated and socio-economicdata assembled (populationdensities, agricultural poten-tial, number of users, etc).

(iv) RankingA programme may not be ableto absorb all selected projectsthat have passed the screeningand appraisal phases. Anoverall ranking of the selectedprojects, on the basis ofoverall weights of someimportant evaluation factors,will be necessary in order to

decide which projects shouldreceive priority and in what

order. The criteria used forranking may be simple, e.g.the road with the lowest costper head of population servedcould be improved first.However, at this stage, othersocial criteria may also beintroduced.

In relation to ranking of ruralinfrastructure, it is importantto note that various fundingsources (a) may have differentranking criteria, and (b) havealready been allocated tocertain sectors and will needto conform to specific selec-tion criteria set for this spe-cific sector. This is very often

the case with funds madeavailable from central authori-ties (i.e. the Education Ministryrequires that their funds areonly utilised for activitiesrelated to the provision ofprimary school education).

(v) ApprovalEventually, projects selectedaccording to the above men-tioned procedures require, as afinal step, approval fromprovincial or central authori-ties and/or an external fundingagency. No work should startbefore such approval has beengiven and funding has beensecured.


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39

The process described above isone that would normally becarried out by the local au-thorities with technical supportfrom the staff incharge ofinfrastructure works. Ingeneral, the process is entirelyvalid. However, the process ofdecentralisation affords thepossibility both for greaterparticipation and for a multi-sectoral approach. Theexisting systems can be aug-mented to take advantage ofthis opportunity.

Infrastructure and roads in

particular provide the opportu-nity for development, but theydo not guarantee it. Dealingwith infrastructure in isolationcan often result in physicalservices being provided whichare then not used effectively.A community may state thatthey want a road as a priorityand this will be included in thepriority list. However, it is notthe road that the communitywants but access to marketsand other economic and socialservices. This implies, there-fore, that the focus should beon the facility to which accessis required to ensure that thegreatest number can benefitfrom the improved access.

Planning on the basis of accessstarts with identification bythe stakeholders of their

access needs. Through aparticipatory process, usingsimple procedures and visualaids such as mapping, thestakeholders can identify theirpriorities.

The particular advantage ofthis process, apart from beingsimple and low cost, is that itallows cross sector comparisonand integration. For example,limited access to primaryeducation may be solved byimproving the road or tracksleading to the school, byimproving the level of trans-

port services or through animproved siting of the class-rooms. The process alsoprovides for the stakeholdersto be involved in the planningprocess and to identify theirpriority needs.

The process of accessibilityplanning, developed in thePhilippines, Laos and Malawi,was designed to work in anoverall planning framework.This has certain repercussions.The results are not absolute inthe sense that they recognisethat overall targets, budgetlevels and benefit impactrelate to the overall planningframework into which theprocess is being integrated.

The process that has evolvedfocuses on the household as


2.3 Participation and Integration


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40

the unit of generation oftransport journeys. This is the

standard procedure that hasbeen used in urban transportplanning for many years.Accessibility planning takesthis focus on the household andapplies it in a rural context.

Data is collected at the house-hold level on time taken andmanner in which householdsobtain access to services andfacilities. The analyticalprocedure results in a demand-oriented definition of access ortransport need. This usesnumbers of households and thetime they take to obtain accessas a basic indicator of the needfor better access.

The data is used to identify aset of interventions whichwould most effectively reducethe time and effort involved inobtaining access to supplies,services and facilities. Theseinterventions could be eithertransport (in terms of ruralinfrastructure, the means oftransport or transport ser-vices), or non-transport (interms of improved distributionor the most appropriate sitingof services).

IRAP covers several sectors. Inparticular, it provides detailed

data on the access that ruralhouseholds have to servicesand facilities. These are: water, energy, health, education, markets, agricultural inputs, agricultural outputs, crop marketing and post-

harvest facilities.

IRAP has been designed toassist local-level planners tomake appropriate investmentsof the almost certainly limitedfunds likely to be available.This concentration on the local

level has several advantages,not least because primary dataare collected by local peopleat the village level and arethen analysed to identifypriority improvements. TheIRAP procedure, therefore, alsoprovides a basis for developingthe capacity of local-levelplanners.

Rural infrastructure planningwhich emphasises the need forand the accessibility of sup-plies, services and facilities isin keeping with current ideason participation anddecentralisation. Local-levelplanning has to involve localpeople, not only in providing adescription of their needs, butalso in designing appropriatesolutions.


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IRAP is a tool to be used aspart of the overall planningprocess. It is designed toensure that the priorities forrural infrastructure are set inaccordance with the actualneeds of the rural population.It has been applied effectivelyin several countries in Asia andAfrica. The system is designedfor use at the local governmentlevel and has been developedto ensure that is simple to use,cost effective and not resourceintensive.

Training in the use of IRAP

generally consists of practicalapplication. Consequently, theinitial 2-3 day training is apresentation of the process tokey officials of the localgovernment unit to providethem with an understanding ofthe process, what they canexpect from the process and todiscuss the logistics and respon-sibilities of implementation.

Following from this presenta-tion would be the training ofenumerators for the collectionof data. Data is then collectedfrom the area under consider-ation. Depending on the size ofthe area to be covered thecollection of data is expectedto take from four to six weeks.

The data would then becompiled either through a


simple computer programme ormanually, whilst at the sametime simple maps are preparedof the area, showing theimportant physical features andthe existing facilities roads,tracks, clinics, schools, etc.

This data is then analysed.From this analysis emerges anaccessibility profile and a setof accessibility indicatorswhich illustrates the levels ofaccessibility that the popula-tion have to different socialand economic services.

This compilation and analysisof the data is provides a simplemeans of presenting the datato the local government unit ina workshop. In the workshop,the participants discuss thevalidity of the results and,using the data as a guide,define for themselves themajor access priorities in thecommune.

The results of the workshopwould be drawn together in asimple report, which would beused as the basis for thedevelopment of an action planthrough a series of discussionswith local officials, stakehol-ders and politicians.

The whole training cum appli-cation process normally coversa period of about five months.

2.4 Training for Infrastructure Planning


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Depending on the overall policyon the use of the privatesector, works can be imple-

mented by private contractorsor through public administra-tion. Devolving some of theresponsibilities for planningand executing civil works tothe private sector have clearadvantages in terms of obtain-ing more responsive andsustainable implementationarrangements. However, thisdoes not mean that the local

Chapter 3Private Sector Involvement

3.1 Public/PrivateImplementationChoice and Modalities


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authority does not needincreased capacity as such.Privatisation only implies thatthe specific responsibilities ofthe local authority change theydo not disappear.

One of the opportunitiespresented by decentralisation

is a greater use of local re-sources. This means that thelocal private sector can beencouraged. Moreover, there isalso the opportunity to createlocal employment through theuse of labour based methodsfor the implementation ofworks.

When involving the domesticprivate sector in the executionof local infrastructure works,there are several importantissues which need properattention during programmedesign and implementation.Local contractors will notprovide an easy solution to theimplementation of works. Localcontractors will require acertain level of developmentassistance which entails a seriesof new activities, such as

management training, develop-ment of user-targeted trainingmaterial, development ofappropriate contract proce-dures, streamlining of paymentprocedures and last but notleast providing interestedcontracting firms with attrac-tive market prospects and a

conducive environment in whichthey can operate efficiently.

All the above mentionedactivities require an institu-tional base in which capacitydevelopment is carried out andsustained. As mentionedbefore, there are severalactors which could provide thecombined capacity to imple-ment the infrastructure works.

The general conditions of acivil works contract normallydefines the roles and responsi-bilities of three basic parties.Contract agreements areentered into between a Client,i.e. the owner of the assets tobe created and a contractingfirm, the executor of theworks. In addition, the worksare normally supervised and

Private Sector Involvement


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verified by a third party, theEngineer. The figure below

summarises the main divisionof responsibilities whenimplementing civil workscontracts. This applies equallyto centrally administeredcontracts as well as smallerlocally administered contracts.

3.1.1 The ContractorThe contractor is the most easilyidentifiable party, anddecentralisation permits agreater use of local contractorswho can be recruited in thevicinity of where the works aretaking place. The contractor isidentified as the party whoexecutes the physical workdefined in a contract agreement.

The size of the contracting

firms is important to bear inmind when identifying and

selecting appropriate contrac-tors for a specific type ofwork. The required size ofcontractors is also directlylinked to the bid packaging. Ifthe works are packaged intolarge lots of relatively high

contract values, there will be ademand for attracting largerfirms. If the works are splitinto smaller contracts, it maybe possible to attract localfirms already operating in thevicinity of the project areas.

Before a works programme isformulated and the appropri-ate modes of procurement arechosen, it is important toidentify the various types of


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contracting firms whichoperate in the country. Thetable above provides a generaldescription of the differenttypes of contractors,categorised according to theirsize and the type of works theyare capable and interested incarrying out.

(i) Petty ContractorsThis category of contractorsusually consists of one man

firms, sometimes assisted by alimited amount of tools andunskilled workers. They may belabour only contractors, usuallyconsisting of a local businessman

Type of Works

Routine road maintenance, labour only sub-contracts, spot improvement works

building construction, sub-contracts for special

skills, construction and repair of

simple structures andbuildings

rural road rehabilitation

major rehabilitationworks,

road gravelling works, bridge and culvert works, construction of gravel

roads

large scale infrastructureprogrammes

complex building projects works appropriate for

equipment-intensive workmethods

Description

single person labour only limited skills not registered

local builders possess some basic

equipment and hand tools registered as tradesmen capital security low possess some technical

skills but limitedmanagerial experience

registered possess some equipment capital security limited entrepreneurial skills technical and managerial

skills

registered good access to equipment good capital security proven entrepreneurial skills good technical and

managerial skills

Type

PettyContractors

Small-scaleContractors

Medium sizedContractors

Large-scaleContractors

sub-contracted to carry outspecific work, relying mainly onunskilled casual labour.

Organised local communitygroups such as farmers associa-tions and village welfaregroups can also be classified aspetty contractors.

A common feature for thisgroup is that they are notformally registered. They do

not possess any capital and aretherefore extremely vulnerableto cash-flow distortions such aslate payments. These contrac-tors do not operate their



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accounts through a bank.Local banks will often not

consider them as attractiveclients and therefore do notprovide them any services.

Petty contractors do notpossess any equipment, andlack any means of transport.Due to their lack of mobility,they need to be recruited fromthe vicinity of the work sites.They are mainly used formaintenance works or simple,clearly defined sub-contractsrequiring a minimum of skilledlabour and equipment.

After receiving appropriatetraining development assis-tance, these groups can prove

to be highly efficient in carry-ing out minor rehabilitationworks and routine mainte-nance. Some show goodentrepreneurial drive, andgiven favourable conditions fortheir operation, such as asteady supply of work andregular and timely payment,they can survive and eventuallyemerge as small-scale con-struction firms and constitutean important component of thedomestic construction industry.

(ii) Small and Medium SizeContractorsSmall and medium sizecontactors are oftencharacterised as the firms onthe lower level of a classifica-tion scale. They are found allover the country and oftenconstitute the majority of the

construction firms available ina country.

A common feature with thistype of firm is that theirfinancial capacity is limited.Some conduct their businessthrough banks, while othersobtain their credits andmaintain their savings andprofit through other financialchannels. Equally, theirequipment fleet is limited andis often even more restrictedin terms of heavy plant requir-ing large capital investments.

The strength of this group istheir proven capacity asentrepreneurs. These firmshave all carried out works

contracts before and evidentlymanaged to secure a profitfrom their business activities inthe construction industry. Thisimplies that they also possess acertain technical and manage-rial capacity through theemployment of professionalstaff.

Due to their large numbers andready availability, also in themore remote parts of thecountry, they are attractivepartners in decentralised civilworks programmes since theydo not necessarily need longperiods and substantial re-sources in order to mobilise.Equally, they are well known intheir local neighbourhood sotheir strengths and weaknessesare generally known amongpotential clients.


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Due to their limited financialcapacity, they are also vulner-

able to cash flow distortions.Late payments of work maycause immediate delays inwork progress since theirliquidity is limited.

When developing small-scalecontractors to implementlabour-based works, it isimportant to ensure that theauthorities are able to supply asteady amount of works tothese firms. In order to defendinvestments in terms of projectdevelopment and trainingcosts, a firm governmentcommitment on future workprospects would be expected.

When the contractors are wellestablished, they should beencouraged to look for assign-ments funded by other sources,thereby reducing the depen-dency on a specific project anda single client.

(iii) Large-scale ContractorsIn many developing countries,the number of really largescale contractors are usuallyvery limited. They are oftensubsidiaries of multinationalcompanies, or established asjoint ventures between multi-nationals and local companies.

The strength of the largecontractors is their solidfinancial capacity and abilityto raise additional capitalthrough commercial banks andother lending institutions. For

this reason, the would also beable to provide any type ofequipment required for theworks. Equally, they cantolerate substantial delays inpayments without experiencingserious cash flow problems.

The disadvantage of these

firms is that they rely on theirextensive equipment fleet forexecution of works and areoften reluctant to replace itwith labour-based work meth-ods. These firms will need tomaximise the utilisation oftheir equipment in order torecuperate their capitalinvestments.

Also, they are normally onlyfound in the major cities andhave limited knowledge of localconditions. Due to their normalarea of operation, they requirelonger and costlier mobilisationbefore they are ready tooperate in remote areas.

For these reasons, they wouldonly be cost-effective for largescale-projects which areconfined to a limited geo-



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graphical area. Smaller worksdispersed over a large region

would be less attractive tolarge scale contractors.

Lastly, it is important to notethat large contracts requiremore complex procurementprocedures, often involvinginternational competitivebidding. This is a time consum-ing process which can beavoided if the works are dividedinto smaller lots at contractvalues where local biddingprocedures are allowed for.

3.1.2 The ClientSimilar to the purchase ofother goods and services, aworks contract will have a

client. The client can be anindividual, such as someonewishing to build a house, or itmay be a company or thegovernment wishing to build orinstall some kind of utility.Normally, the client is identi-fied as the organisation whichrequires a certain end productand has the authority andmoney to order and pay for it.

When a project is financedfrom public funds, whether it iswith financial assistance froma donor, an internationaldevelopment bank or fromregular government budgetsources, the government isrecognised at the client. Forpublic works projects, theclient can be identified ingreater detail, such as a

national roads authority,planning to rehabilitate a road,

or the Ministry of Healthbuilding a clinic. Equally, alocal government authority canbe identified as the client forrural infrastructure works.

A basic assumption whendealing with any contractagreement is that the client isalso the provider of the financ-ing of the contracted works.Funds may originate fromvarious sources, such as thegovernment treasury, road userfunds, donors and local taxrevenues. When the cliententers into a contractualagreement, certain financialobligations are made, and in

order to honour those obliga-tions, it is essential that therequired funds are readilyavailable to the client. Ifthese funds are not available,then the client is legally not ina position to award a contract.

3.1.3 The SupervisingEngineerIn terms of implementingworks, the client often choosesto delegate the supervisionresponsibilities to a third party,the Engineer (also referred toas the Contracts Manager orthe Superintendent). Insituations where the work isdispersed over a large geo-graphical area, it would seemnatural for the client to choosean institution which is wellrepresented at local level.


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49Private Sector Involvement

Technical duties: ensuring that the Contractor has

complied with work standards,conditions of contract and theschedule of works specified in thecontract,

informing the Client promptly of anydefects for which the Contractor isresponsible and which could bedetrimental to the quality of the

project, providing technical and managerial

The Engineer appointed by the Client to supervise the works is in charge ofadministrative, technical and financial control of works, daily on-site supervision,issue of payment certificates and the final completion certificate. The Engineeris responsible for the following activities:

advice to the Contractor, as re-quired,

ensuring that the Contractorrespects the planned time schedulefor the works,

advising the Client on possiblemodifications of plans, specificationsand work methods,

ensuring proper execution of

remedial works before final handingover of works.

Administrative duties: Maintaining daily site records and

preparing progress reports on thestatus of the project,

ensuring liaison with local authori-ties and institutions, particularly onmatters such as land disputes,authorisations to carry out surveys,access to quarries, etc.,

suggesting suspension of the worksto the Client in case of serious flaws,

issuing completion certificates andmaintenance certificates whenhanding over works,

playing the role of a mediator in thesettlement of disputes between theContractor and the Client,

ensure that workers are paidaccording to the schedule and ratesagreed,

arrange site meetings

Financial duties: liaise with the clients representative

to ensure regular budgetary provi-sion for the work under contract,

carry out surveys with the Contrac-tor to calculate the quantities ofworks actually completed,

certifying monthly statements andsubmitting interim certificates tothe Client for payment,

liaise with the client representativeto ensure the timely payment ofcertificates.

The duties of the Engineer, inthe context of a works con-

tract, are summarised in thetable below.

There are several ways of

contracting out works. Depend-ing on the type of works, it can

be through engaging recognisedcontractors, through communitycontracts or through labouronly contracts.


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management also include thepayment of the contractors. Inother words, these responsibili-ties need to be vested in aninstitution which not only havesufficient technical know-how,but also possess a financialmanagement capacity. If thiscapacity is lacking, it is impera-

tive such skills are developedwithin the local authorities.

Local government organisationsoften include a small publicworks department. In manycountries, their level of activityhas been very low and for thisreason, limited resources havebeen allocated to their units.When larger responsibilities arevested into local government, itis often necessary to strengthenthese institutions, thus enablingthem to effectively carry outthe duties involved. The figurebelow describes a typical localworks authority, managingworks carried out by localprivate contractors.

Devolution of responsibilityprovides the opportunity forgreater involvement of locallybased contractors. However, italso requires that the capacityof the local contractors is equalto the task, and that there is asufficient capacity to administerand supervise the contractors.

The first step in this process isto establish effective contract-ing procedures and appropriatecontract documents. Withoutthese the capacity cannot bedeveloped. The next steps areto (i) provide support to thecontractors both in terms oftechnical training but also inrelation to business capacity,and (ii) build up a local con-tracts management capacity.

Contracts management capacityneeds to be developed at theappropriate level of localgovernment, where qualifiedstaff is found or can be re-cruited. Equally, it is importantto bear in mind that contract

3.2 Development of a Contracting Capacity


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This unit was designed for alocal government authority

serving a total of 500,000inhabitants, dealing with ruralinfrastructure developmentworks such as secondary andtertiary roads and bridges,markets, water supply, primaryschools, irrigation structuresand public buildings.

The composition of the aboveorganisation may be appropri-ate for a local government unitinvolved in a considerabledevelopment programme withan emphasis on new construc-tion and rehabilitation works.

Once the developmentprogramme evolves into a

maintenance programme, theengineering staff can bereduced and instead themaintenance section can bestrengthened. Since roadimprovement works often takeup a major portion of infra-structure development bud-gets, it may be necessary toallocate an engineer on a full-time basis for this purpose.

The assistant engineers for ruralroads and civil works are mainlyused for quantity surveying,design, and works supervision.The Planning and MonitoringEngineer mainly deals withplanning of works, preparationof tender documents, main-taining contract registers,compiling progress reports, andmanaging the administrativeduties of the support staff.

The maintenance unit isprimarily concerned with

programming and supervisionof routine road maintenanceworks. Due to the geographi-cal dispersed nature of thiswork, it is useful to establish aseparate unit dedicated to thisimportant function.

If local authorities carry outsome force account works (i.e.emergency repair works), andfor this reason possess a certainamount of construction equip-ment, there is a demand for amechanic for the preventivemechanical maintenance andrepairs of the equipment theyown. Although most of thiswork can be contracted out to

local firms, the local authoritywould require a competentperson to programme andsupervise such services.

An alternative to this model isfor the local authority to relymore on the services of localconsultants instead of takingon some of the engineeringpositions. In cases where thedevelopment programme isexpected to last only for alimited duration, it would bemore appropriate to build up asolid organisation for futuremaintenance requirements,and rely on consultants ortemporarily employed projectengineers for the constructionworks.



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3.3 Development of Contract

Management CapacityIt is often ignored that theprivatisation of works imple-mentation requires a certainlevel of capacity in the localauthority agencies to adminis-ter contracts. It is of littlevalue having effective andefficient contractors if theadministration of those con-tracts is inefficient, slow and/or unduly bureaucratic orsimply not prepared orauthorised to carry out thistask. Therefore, appropriatemanagement procedures needsto be established and localauthorities trained in terms of

establishing who and how theywill be involved in contractadministration.

The figure below describes aflowchart of events fromproject inception to implemen-

tation and how the variousstakeholders at local level areinvolved in the various aspectsof management.

Rural infrastructure workswould ideally be initiated by ademand voiced by the futureusers of the assets to becreated or rehabilitated.Requests for infrastructuredevelopments are voiced in thelocal political bodies anddevelopment committees, andprocessed by the repr

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