Complex projects expose govt to risk

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Government projects are characterised by scale and complexity.

Imagine the national road dualisation projects that are in the books of the Ministry of Transport to visualise the scale and complexity that I am referring to.

The projects are very involving and thereby expose the government to several risks. Risk diversity emanates from involvement of many players on one single project.

The risks are twofold; there is risk associated with project timelines and another associated with budgets.

Target-related risks have two outliers, one of total failure to meet project schedule and the milder one of project schedule delays.

Project schedule risks can triumph even if financial resources are available; therefore failure to meet deadlines is not correlated with lack of funding in all instances.

Budget-associated risks involve issues such as variations in interest rates, major shifts in input costs including import duty variations.

Often, schedule and financial risks can subsist simultaneously in a single project without any relationship between their existences.

By their nature, projects in the government contain uncertainty and risks and successful implementation rests on essential knowledge and experience to manage the private sector partners through procurement.

Effective procurement is central to the management of these risks.

Successful delivery is more likely if these: often inevitable, uncertainties are identified and addressed at an early stage.

This requires involvement of procurement at project conception to ensure procurement related matters are addressed.

To achieve this, however, envisages a role for procurement that is not only operational, but a key component in the journey of effective delivery.

The role of procurement will be to identify and manage the supply side of the contract. It is often best to engage potential suppliers early, to have pre-procurement conversations, which improve the joint understanding of intended outcomes and the cost drivers and risks associated with project schedule.

Historic approach of arms-length relationships with critical suppliers no longer has a place in this new era of doing business.

Large and sophisticated citizen-centric services require mutual relationships between suppliers and the government through professional procurement management.

The new dispensation does not mean that issues of competition and transparency can be overlooked. Mutual relationships can be achieved through selection of suppliers through competitive process.

This is a critical fact given that Zimbabwe infrastructure is in dire need of rehabilitation and accepting reality about the critical role of procurement is a bold step which if taken, will be applauded.

To achieve infrastructure projects’ success using tax payers’ funds, there must be professional reliance on suppliers who deliver the services and creates new or improved processes to support service delivery.

Procurement is the vehicle through which suppliers are carefully engaged and contracts are managed to conclusion.

Nyasha Chizu is the chairman of CIPS Zimbabwe branch and writes in his personal capacity. Email: chizunyasha@yahoo.com