This report by Dr. Hernando Garzon and Nasrat Khalid will summarize an assessment on putting measures for preventing corruption through installing GPS devices on the Kabul Municipality trucks/cars that are used by the 3 departments namely, works and maintenance, greenery and lastly, sanitation. We will firstly go through an introduction to the problem and the implementation, then we will do a comparison of the data before and after the GPS installations and will finally provide a conclusion and will hint to future developments.
The Global Positioning System (GPS) initiative has been a part of the multiple activities being implemented by the Kabul Municipal Development Program (KMDP). The GPS initiative’s objective is to reduce the cost of service provisions in Kabul Municipality, due primarily to extreme corruption in fuel consumption. Initiatives such as these are currently helping the municipality reduce overspending on fuel consumption. This overspending has been a result of the growing corruption among most truck drivers. Given this ongoing corruption, a decision by KM’s leadership was made in January of 2015 to hire a private company to install GPS devices in each truck operated by the three main service departments (Sanitation, Greenery, and Works & Maintenance). The contract was signed on Feb. 4th of 2015 and was completed on Feb. 3rd of 2016. The system includes a server that receives electronic daily reports directly from each GPS device tracking the daily operations of each service truck. The three departments have a GPS Monitoring Center to oversee and control the day-to-day operations of every one of their respective service trucks.
The objective of the system is to provide fuel to the driver of each truck based on the number of kilometers, registered by each GPS device, to determine the corresponding fuel consumption of the truck during service provision. This replaced the legacy system of providing fuel based on the hand-written reports submitted by each driver detailing kilometers driven.
In FY 2011, it was estimated that KM spent more than one third of its operating budget on fuel and lubricants (34.8%) making it the second top expenditure after payments to human resources (40.9%). Based on these numbers, one can see that motor-oils (diesel), gasoline (petrol), and vehicle maintenance and repairs (Third in line with 13%) absorbed nearly half of KM’s operating budget (47.8%). In FY 2014 (LY 1393) the fuel consumption figure (not including costs for vehicle maintenance and repairs) represented 41.7 percent of KM’s operating budget. In absolute terms, this amounts to Afs 936.7 million Afghanis, or US$ 13.8 million dollars in fuel for the activities being performed on these vehicles including (greenery, sanitation, works etc) In order to deliver these and other services KM owns over 1,000 motor vehicles, 728 of which are currently operating with GPS devices.
On December 6th of 2015 Kabul Mayor informed the press the continuing problem of fuel theft among truck drivers for the Cleanliness/Sanitation Department. It was also acknowledged that part of the issue is the very low salaries of KM drivers. Currently, the average monthly salary of a driver is about Afs. 7,766 ($120). The Sanitation Department is the largest department in KM, employing over 3,700 workers; it was reported, “Most of the truck drivers in this Department steal 40 liters of diesel on a daily basis The Sanitation Department uses about 487 trucks for solid waste collection and employs roughly 500 drivers. In his statement to the press, on December 6th of 2015, Kabul’s mayor reported the truck drivers were stealing that about 35 to 37 percent of the fuel. This amount of revenue, compared to the average monthly salary of a driver of about Afs. 7,800, is over five times their intended monthly salary. Not surprisingly, when the GPS system was installed to keep tabs on every truck, thus preventing fuel theft, many drivers simply left their jobs.
We will examine pattern of monthly fuel consumption before and after the GPS system became fully operational, then compares these fuel consumption patterns to identify any differences among them. The methodology takes into account that fuel consumption patterns may be attributable to the effects of using the GPS devices along with other possible factors, such as seasonal effects. Therefore, an attempt is made to separate these two different effects on fuel consumption.
The last section of this paper, based on the empirical findings and their analysis, offers specific conclusions and recommendations.
Sanitation Department – Before and After the GPS Installation:
Most of the fuel consumption in the Sanitation Department (80.3%) refers to diesel, while 19.7% relates to petrol. The data in the “Sanitation Department” indicates a huge decline in diesel consumption. In August, the month before the GPS system was implemented, monthly consumption of diesel was 731,300 liters (Refer to Table 2). In September, under the new GPS system, diesel consumption dropped to 23,163 liters. This result demonstrates the magnitude of corruption that existed before the GPS monitoring system was adopted.
There are no other factors to explain this enormous drop in monthly consumption after August. This massive decline is stable and consistent with the level of consumption during the last three months of 2015, which directly coincides with the time period in which the GPS devices have been in operation. This extraordinary decrease in fuel consumption is illustrated in Graph 1 above.
In contrast to the patter of consumption of “public works & maintenance”, and “greenery”, “solid waste collection” is a service minimally affected by seasonal factors and appears to be generally stable throughout the year. This stability is reflected in the level of monthly consumption of fuel before and after starting the GPS program. The relative stability in the data (Graph 1) suggests that the level of corruption before the GPS was both enormous and systematic. The level of fuel consumption since implementing the GPS system has dropped by about 97 percent, meaning that average fuel consumption is now 3 percent of what it was before GPS. This huge consumption reduction is extraordinary. However, some of these results may be affected by a slowdown in service provision during these three months considering that many drivers quit their jobs due to the GPS expenditure control.
During the spring of 2015, before the use of GPS, the average monthly consumption of diesel was 721,264 liters; after the GPS system became operational in the autumn, diesel consumption has dramatically dropped to only 22,919 liters (Table 1). This data shows that before beginning the GPS monitoring system, when truck drivers of the Sanitation Department manually reported diesel consumption, that consumption was about 30 times more than it is now, demonstrating the successful implementation of the GPS system.
Table 1: Average consumption of Diesel Without and with GPS
|Liters of Diesel per Month||605,903||731,802||826,087||723,725||577,665||731,300||23,163||18,699||26,895|
|AVERAGE of SEASON||721,264||22,919|
|Source: Elaborated for this report based on data provided by Sanitation Department|
This enormous difference in average consumption is equivalent to a monthly reduction of 698,345 liters of diesel used by the Sanitation Department.
The fairly steep negative slope illustrated in Graph 2 above shows this extraordinary trend of reduction in diesel consumption.
Savings – Sanitary Department (Other Depts not Included):
From September to November the Sanitation Department consumed on average 698,345 liters less per month, demonstrating that the total savings in fuel, up until November, are equivalent to Afs 2,095,035. (i.e., Afs 698,345 x 3 = Afs 2,095,035). In monetary terms these savings are equivalent to Afs 87,991,470 (i.e., Afs 2,095,035 x Afs 42 = Afs 87,991,470) in one quarter of the year. Thus, the yearly savings in diesel consumption in the Sanitation Department are equivalent to Afs 351,965,880 (i.e., Afs 87,991,470 x 4 = AFs 351,965,880).
- The spreading culture of corruption has been and continues to be a challenge for Afghanistan’s economy, as well as for development support programs funded by the international community of donors.
- The low salaries in the public sector constitute a major challenge. This causes a serious constraint in overcoming corruption.
- The lack of authority to set employee salaries by subnational levels of government (like KM), despite the legal requirement and the fact that Afghan city governments finance their own payrolls.
- The current lack of autonomy to hire and fire staff based on their qualifications and performance poses another difficulty to overcoming current weaknesses in the effectiveness of local administrations.
- There is also a challenge for Kabul City residents. Though corruption in KM is well known among citizens and has been acknowledged by KM’s highest authorities, Kabul residents cannot hold the city’s government politically accountable, since they did not elect the local government. However, unsatisfied residents may refuse to comply with payments of local taxes and fees/charges, making the current situation more difficult.
- There is strong empirical evidence that the installation of GPS devices in KM’s trucks has substantially reduced corruption (i.e., unnecessary fuel purchases by KM).
- From this perspective the investment in the GPS system has been highly beneficial for KM finances. It is estimated that the GPS program will generate yearly savings worth US$5. 6 million dollars (in all departments).
- Considering that in FY’14 (LY 1393) KM spent about US$13.8 million dollars in fuel purchases, and that the estimated yearly savings due to the GPS program will be at least US$5.6 million dollars, fuel expenses will be cut down to US$8.2 million dollars. This considerable decrease is equivalent to 40.6 percent of the expenditures in fuel before the GPS.
- Furthermore, when the cost of operating services drops (O&M), financial resources are freed up to potentially be available for investments in development.
Given the above conclusions, the GPS initiative may be considered a success story. However, as already noted, there are still serious legal and institutional challenges that KM, together with other cities, needs to overcome in order to truly reach their potential. A second report will be prepared with updated figures soon and will be shared.
About the Authors:
Nasrat Khalid is an ICT innovation activist currently working with one of the leading development donors in Afghanistan. He was previously engaged with international NGOs, implementing partners, public sector and has succeeded throughout a startup. Nasrat’s work focuses on the economic and social impacts of new technologies and development of ideas on how technology could be used in fragile and developing states such as Afghanistan. His education mostly focused on computer networks, development and management. Contact him with @NasratKhalid in all major social networks.
Dr. Hernando Garzón is an economist. He earned his doctorate at the Maxwell School of Syracuse University in the USA and joined the World Bank as inter-governmental Finance Specialist in 1989. Dr. Garzón currently works as Senior Municipal Finance Advisor to Kabul Mayor, as part of the World Bank funded Kabul Municipal Development Program — KMDP. His broad international experience in developing and emerging economies covers 40 countries across all regions. Dr. Garzón has published numerous papers and articles and has contributed to books on topics related to development of city finances.