Wednesday, July 21, 2010

Outsourcing of public works

I asked a knowledgeable person about flooding in Singapore. Could it be due to the replacement of older, experienced persons by young scholars, without the experience, in the government agency? He said that this was an important factor.

Another factor is the outsourcing of the work, especially to foreign contractors. Many government agencies prefer to outsource to foreign experts, rather than use local experts. The foreign contractors did not know the local conditions and may not give the optimal solution. We are now seeing the possible consequence of this practice. Singapore had been free of flood for man years; why should we get the flooding now?

The practice of outsourcing will deplete the in-house expertise in the government agency. In a crisis, the agency does not have in-house expertise to solve the problem. They have to rely on the outsourcing contractor to solve the problem. The agency has to negotiate the price for this service, and will has no choice but to pay the high price that is demanded by the contractor.

I searched Google for articles about outsourcing. Here is an interesting article about the benefits and pitfalls of outsourcing. It seemed that the benefits are short term, and the pitfalls are long term.

Tan Kin Lian