Thursday, February 23, 2006

The Disi project again

Last December, the government decided that it would go ahead and build the Disi conveyance system itself, after failing to attract investors to built and operate it under the BOT (build, operate and transfer) model. Previously, it had taken a decision to establish public holding company to do the investment, and before that it had contracted to Armed Forces Investment fund to do the work.

A couple of days ago, the government changed its mind again. According to the press reports, a new tender will be floated to attract an investor to do it according to the BOT model. It is not obvious that they will get any offer that is superior to what was offered to them three years ago, although the Al Rai report suggests that some new investors are interested.

Call me cynical, but I don't buy it. The bottom line is that the project doesn't make economic or environmental sense. This hesitation as to what "model" to use is simply a thin cover for the fact that the government doesn't have the heart to tell people that it doesn't want to do it. The project has broad support from the public and from politicians, so the government is buying more time by going again into the cycle of tenders, bids, studies and negotiations. It will be another year before they have to make another decision, maybe longer if they can stretch out the negotiations.

Now, it is not unheard of for governments to build projects that are economically unfeasible but have social benefits. Estimates of the building costs are around the 600 million dollar mark. However, a thin budget for capital investments means that the government simply is paying its running costs, with no extra money to fund a project like this. The minister of water and irrigation says that his ministry has the staff and expertise needed to do it themselves. I am sure that is true, but it does us little good.

The structural problem is that the water is too far away. A conveyance system to Aqaba was built because it made sense, without much fan fare. I don't see why it is important to encourage the growth of Amman. A fresh look at the issue might lead to the conclusion that the water might be better used to foster economic growth in the south of the country, which needs the water more desperately than Amman does.

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3 Comments:

At 9:32 PM, Anonymous jameed said...

Call me even more cynical; maybe the powers that be are just waiting for whoever gives them a better "commission' on the project?

BTW, the issue of pushing development in cities other than Amman is constantly bugging me those days.

 
At 3:56 AM, Anonymous Anonymous said...

Let's talk Gaddafi into it, again, he's known not to need economic sense for anything. Plus, all he needs is to be the African Union president, let's give him that and vote him him.

Well, where is Uncle Sam now? Didn't they say thay want to make Jordan into heaven? Or a heaven for their US Army only?

 
At 9:53 PM, Anonymous Anonymous said...

jordan's governments are known for their short time. new ministers come in fill their swiss accounts and leave the seat so someone else get to sit down, fill his sack, and be a millionare. this is the cycle of jordanian governments. some former prime ministers, left the government with 50.000.000.00 dinar to their name. where did they get that money? their parents did not leave them any money. now, who have to pay for this? THE POOR.
who said jordanians can pay $12.70 for 20 litters of gas. this is highway robbery. the rich get richer and the poor jordanians have no choice but to get poorer.
one day a good prime minister came to office. he wanted to implement the policy of "where did you get this money and how." he was out of office very quick (fired).

 

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