Kalesh Kumar: Community Involvement, Exclusion of Private Contractors Key in Saving Costs

A woman raises her hand during a community meeting in Aurangabad, India. Community projects could be more cost-effective and efficient when the immediate beneficiaries are the ones implementing major project activities. Photo by: Simone D. McCourtie / World Bank / CC BY-NC-ND

Community projects could be more cost-effective and efficient when the immediate beneficiaries — not private contractors — are the ones implementing major project activities. This is the conclusion derived by World Bank blogger Kalesh Kumar from his review of studies on the multilateral agency’s community projects in different countries.

For instance, Kumar said that construction work in World Bank-supported projects implemented in four Indian states in 2009 generated savings of 12 percent to 56 percent compared with estimates by the public works department. This is mainly due to the application of community-based procurement.

Kumar found similar results in World Bank-supported community-driven development projects in Burkina Faso, Indonesia and the Philippines. The classrooms built by the bank’s project in Burkina Faso, in particular, were less than half the cost of those constructed by private contractors, he cites.

Aside from the involvement and ownership of the projects by beneficiaries, Kumar identifies the following key factors for the cost-effectiveness of such projects:

  • Non-involvement of contractors, which minimizes overhead costs and some taxes that contractors pay to authorities. 

  • Contributions by beneficiaries that were not only in the form of cash and labor, but also through wastage reduction.

  • Relationship-based procurement in the case of India, wherein communities established a mutually beneficial commercial relationship with the village supplier that is based on their common need for a better outcome for the community. Suppliers who provided the best products and value for money benefited from a growing market, while those who tried to cheat the community were boycotted. 

  • Support from the engineering authorities in decision making and quality assurance.

  • Community-specific factors, such as a remote location, that make it extremely difficult for commercial contractors to compete with the project cost by the community.

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About the author

  • Che de los Reyes

    As a senior staff writer, Che focuses on international development breaking news coverage as well as interviews and features. Prior to joining Devex, Che handled communications for local and international development NGOs and government institutions in the Philippines.