How does technical assistance soak up so much of the aid to Cambodia? A look at a
typical project offers some insight.
In July 2000 the ADB and World Bank agreed to fund the rehabilitation of approximately
600 kilometers of Routes 5, 6, and 7.
In July 2000 the Ministry of Public Works and Transport negotiated a contract with
Australian companies called "SMEC International Pty Ltd" and "Worley
International Ltd" to carry out the work.
This is undoubtedly a worthy project, and if the roads don't collapse as the result
of corruption in the building process, then Cambodians will undoubtedly be grateful.
In fact, this is why a foreign company was brought in.
But take a look at the amount spent on foreign consultants. In addition to the other
costs of the project, "consulting services" for this project totaled $4,697,790.
That's $782.95 per kilometer.
How much did the foreigners working on the project receive? According to the minutes
of the negotiations (Australian dollars have been converted to US dollars at the
rate of US$ 0.60, the approximate rate in July 2000), the monthly salaries ranged
from $4,272 per month for one Mr. Maher, "Resident Engineer 4," to $10,800
per month for a BME Specialist, Mr. Teese, and $14,044 per month for Mr. Collins,
a UXO specialist.
But this was just the beginning. Each short-term consultant received a per diem of
$90, or $2,700 per month. Each long-term consultant received a $1,500 housing allowance,
which added up to $261,000 for the project.
The long-termers also received a one-month "settling-in allowance" of $90
per day, or another $2,700 (presumably to buy items like light bulbs and toilet paper
- we all know how expensive it is to buy these items in Phnom Penh).
And to make sure that all could keep in touch with loved ones at home, each received
a $498 "communications allowance" per month. This item alone was approximately
twice the annual per capita income of the average Cambodian.
SMEC and Worley didn't do too poorly out of this arrangement, either. The agreement
allowed (Item 3.2) for "Social Charge Multipliers of 37% (SMEC) and 54.31% (Worley),"
along with "Overhead Multipliers of 123.87% (SMEC) and 106.55% (Worley)."
These funds, along with other opaque costs ("fees" and "overhead allowances"),
went into the company's coffers to cover costs and as profit. One needn't be a road
engineer or BME specialist (whatever that is) to figure out that this was a lucrative
deal for two companies in Australia.
These additional fees meant that the costs of each consultant shot up. For example,
Maher's salary of $4,272 ended up costing Cambodians $13,243 per month.
Typical of this contract is the disparate ways that foreigners and Cambodians are
treated. The budget allowed for 600 days of "out-of-station allowances"
at $40 per day for expatriate staff. But the contract then went on to say that, "it
was agreed that the meal allowance for Local Consultants is included in the local
Local consultants was another way of saying "Cambodians". Apparently they
never considered giving Cambodians, whose salaries were a fraction of their expat
colleagues, even $10 per day while away from home. But this would have necessitated
a cut in the expat communications allowance from $498 per month to $488.