Limits imposed on ministers’ authority to approve projects at will

Ministers and state ministers will no longer be able to approve projects within their own ministries, a power they had exercised for years. The interim government has amended a guideline to curb this authority, meaning any project worth more than Tk 500 million will now have to be sent to the Planning Commission.

The change was made at a meeting of the National Economic Council (NEC), chaired by chief adviser Professor Muhammad Yunus, on 12 January. Experts have described the move as positive in terms of preventing corruption, but have also cautioned that care must be taken to ensure the approval process at the Planning Commission does not become prolonged.

Under the new decision, if any autonomous body, semi-autonomous body, corporation or state-owned company undertakes a project worth more than Tk 500 million using 100 per cent of its own funds, the proposal will have to be sent to the Planning Commission.

After scrutiny there, approval will have to be obtained at a meeting of the Executive Committee of the National Economic Council (Ecnec), which is chaired by the prime minister or head of government. However, if the project cost is below Tk 500 million, ministers and state ministers will continue to be able to approve it as before.

Until now, ministers and state ministers were able to approve any fully self-financed project of autonomous bodies, semi-autonomous bodies, corporations and state-owned companies under their respective ministries, with no upper limit on project costs.

Clause 7 of the ‘Guidelines for the formulation, processing, approval and revision of development projects in the public sector’, approved in 2022, had stated that projects proposed for implementation with 100 per cent self-financing by autonomous bodies, semi-autonomous bodies, corporations and state-owned companies would be approved by the minister or state minister of the relevant ministry. That clause has now been amended.

The Rajdhani Unnayan Kartripakkha (RAJUK) is an autonomous body under the Ministry of Housing and Public Works. RAJUK has undertaken a project to develop infrastructure in Purbachal, near Dhaka, at a cost of Tk 88.7 billion, entirely using its own funds. Instead of sending the project to Ecnec, RAJUK wrote to the Planning Commission on 16 October seeking approval to implement it using its own financing.

In response to the letter, the Planning Commission stated on 9 December that the Purbachal Infrastructure Development Project, planned for self-financing, must be submitted to the Planning Commission for approval. The project will then need to be approved at an Ecnec meeting.

A kind of psychological standoff has been ongoing between the Planning Commission and RAJUK over this matter.

Sources say that the Ministry of Power, Energy and Mineral Resources implements the largest number of self-financed projects. Under this ministry, many autonomous bodies—including PDB, REB, DPDC and DESCO—carry out numerous projects using their own funds. These projects do not need to be sent to Ecnec and can be approved by the relevant minister or adviser.

In practice, what happens with these projects is not accessible to anyone else in the government. In addition, city corporations, WASA and other autonomous government agencies also implement projects with their own funds. There are allegations that there is no accountability for such projects.

A Planning Commission document notes that because these projects fall outside the Annual Development Programme (ADP), they are not monitored or evaluated by the Implementation, Monitoring and Evaluation Division (IMED). No third party conducts oversight or evaluation either. As a result, no one can be held accountable. To bring development projects under discipline, project proposal, approval and implementation need to follow the same process.

A Planning Commission official told Prothom Alo that for large-scale projects, ministerial-level approval is often treated as final without any survey or verification. As a result, there is no clarity on whether the project’s objectives align with national interests or whether the expenditure is justified.

Sources say that in many cases, allegations have arisen of project costs being unreasonably inflated, unnecessary projects being approved, and lapses in implementation. Taking these issues into account, the new decision has been made.

The new decision states that for projects financed by autonomous bodies using their own funds, the same process as for government development projects must be followed. The Planning Commission will verify the project’s objectives, activities, expenditure breakdown and expected outcomes. No project costing more than Tk 500 million may be implemented without ECNEC approval.

In 2015, the National Housing Authority undertook a project in Kalshi, Mirpur, Dhaka, to sell flats to low- and middle-income residents. Under the first phase of the Swapnanagar Residential Project, the flats were scheduled to be handed over to customers in 2018. Each 1,500-square-foot flat was to be sold at Tk 6.4 million. However, the authority was unable to complete the project on time, and the flats were handed over three years late. The price of each flat was increased to Tk 7.8 million.

The delay and price hike drew widespread criticism, and questions were also raised about the quality of the work.

A resident of the Swapnanagar Residential Project, who holds the rank of joint secretary in the government and spoke to Prothom Alo on condition of anonymity, said that due to the absence of accountability, the project’s quality was very poor. Within a few days of occupancy, water leakage began, cracks appeared in several places, and there were issues with the electrical lines.

“In such projects, the government has no accountability and there is no oversight. This creates opportunities for irregularities,” the official said.

Sources at the National Housing Authority say that the organisation has never been able to start and complete any project to sell flats to customers in Dhaka or outside the city on schedule. As a result, customers have to buy flats at higher prices.

Both city corporations in Dhaka undertake projects using their own funds. These projects are often initiated under the influence of the mayor or political pressure, with no accountability in place. In addition, there have been allegations of irregularities and corruption in the DPDC’s self-financed project for the collection of prepaid electricity meters.

According to people associated with the economy and development administration, autonomous bodies have often used the opportunity to secure project approvals under the direct political influence of ministries. The new system will reduce that scope.

However, some officials of autonomous bodies have expressed concern that adding extra steps may lengthen the time required for project approval, creating a risk of delays for urgent projects. Even with one fewer step previously, most projects were already experiencing implementation delays.

The government has said that while the process may take slightly longer, it will restore discipline in project management. In the long term, this will help ensure the proper use of the development budget, prevent waste of state funds, reduce the risk of corruption and inefficiency, and increase transparency and accountability.

Mostafizur Rahman, distinguished fellow at the private research organisation Centre for Policy Dialogue (CPD), told Prothom Alo that the government’s initiative is positive for planned development and coordination. “Autonomous institutions often pursue projects according to ministers’ preferences, with ministers using their influence to approve them. This step allows a break from that practice,” he said.

However, he advised that care should be taken to avoid excessive delays. “It should also be kept in mind that once a project goes to the Planning Commission, it may still encounter procedural delays, which could hinder implementation. The government must consider this risk to ensure that project approvals are not unduly delayed,” Mostafizur Rahman added.