Real causes of project failures in urban development sector in Sri Lanka

Abstract

The governments in the recent times particularly from the latter part of 70's to date has taken many keen attempts to uplift the living standards of the people through implementation of urban projects. The aim was to crate a fabulous built fabric that can generate convenient, financial, social and economic returns. The effort was carried out not only allocating the government money but also through, institutional, technical, political and professional inputs. In practice, many urban projects seemed less attractive or unsuccessful in generating expected returns. Consequently the failure of urban projects resulted wastage of resources with heavy economic, financial and social costs. The real causes of failure in urban projects are still debatable and unknown. Some argues that poor project planning, technical defects and political influences are the main reasons where others argue that poor project management, lack of risk analysis and poor financial planning are the main reasons. But such arguments however are not yet valid and justifiable, as the adequate research work has not been carried out. The research study tends on identifying types and causes of urban project failures while analyzing the recent project implementation efforts of the Urban Development Authority (UDA). These projects were analyzed in terms of financial, economic, technical, institutional, social, political, risk and other perspectives. It is observed that many projects had problems related to cash flows due to poor financial planning, estimation and further non-consideration of political influences and risk factors. Cost and time over-run were very common. Other than that in economic terms many were unable to lead positive returns to the community. However many projects seemed favorable in socially and technically. The reasoning for many failures was mainly project management failures not' only financial, economic and technical terms but also institutional, political and risk. An argument is made to arrange an organized mechanism encompassing with institutional processes, alternative inputs of marketing, and more systematic project planning and financial approaches. This intern makes a platform to undertake further studies to outline institutional reforms and sectoral policy targets in project implementation urban sector.