Welcome back to the Deep Dive. I have to admit,
when I first saw the title of the resource deck
we're covering today, I was a little confused.
Yeah, it's a bit of a curveball. Right, because
it's called Ghost Projects. Yeah. And, well,
I assumed we were pivoting to true crime or maybe
a supernatural thriller, like a haunted house
special or something you'd find on a conspiracy
forum at three in the morning. I can definitely
see why you'd think that. It sounds inherently
spooky. It does. But after reading through these
reports, specifically the data from the American
Journal of Management Practice and the fieldwork
from the Philippines, I realized this is actually
much more terrifying than a ghost story. It really
is. I mean, a haunted house might scare you for
a night, but a ghost project can bankrupt a community
for a generation. And unlike a ghost story, the
villains here aren't hiding in the shadows. No,
they're not. They're usually standing on a podium,
cutting a ribbon. That's the image that really
stuck with me. The idea of a grand ribbon -cutting
ceremony for... For literally nothing, air, an
empty field. But let's ground this for everyone
listening. We aren't talking about spiritual
manifestations. Right. We are talking about a
very specific, incredibly expensive phenomenon
in global infrastructure. Exactly. To put a rigid
definition on it based on our sources, a ghost
project is a development or infrastructure initiative.
A bridge, a dam, a hospital that has been officially
approved. It's been announced to the public.
And crucially, the funding has been allocated
and often released. Physically. Physically, it
either was never completed, was substantially
delayed, or in the absolute most extreme cases,
exists only in plans and documents. There is
little to no physical implementation. See, that's
the part that I struggled to wrap my head around
initially. Abandoned projects, I get. You run
out of money, you stop building. We've all seen
a half -finished condo building or a stalled
highway. Sure, those are common. But the sources
describe scenarios where the paperwork says the
project is finished, the money is completely
gone, and the site itself is just a muddy field.
How is that functionally possible in the modern
age? I mean, you can't hide a missing bridge
from Google Earth. You can't hide it from a satellite,
no, but you can hide it from the bureaucracy.
And that's the key here. This isn't usually a
case of someone just robbing a bank and running
away in the dead of night. It's a highly complex
ecosystem of fraud. An ecosystem. Yes. And it
usually starts. way before the first shovel even
hits the ground. It fits into a broader family
of fraudulent practices that our sources mention,
things like ghost employees, where salaries are
paid to workers who don't exist, or ghost expenses.
It's a systemic issue of manufacturing a paper
reality that directly contradicts physical reality.
Okay, so let's walk through that ecosystem. You're
talking about the feasibility study phase, right?
I was reading about this. It seems like the corruption
starts by basically... Cooking the books on whether
the project is even possible or necessary. Precisely.
In a healthy system, a feasibility study tells
you if a dam will actually hold water or if a
new road will legitimately reduce traffic. It's
the groundwork. Right. But in the ghost ecosystem,
that study is often faked. They manufacture data
to make a project look incredibly profitable
or urgently necessary just to get the massive
budget approved. And once that green light is
on. the money starts flowing. And this is where
the mobilization fee comes in. This was the specific
mechanism that just blew my mind. It's brazen.
It is. The contractor gets an upfront payment.
Literally just to show up. Usually around 15
percent of the total project cost. Now, in a
legitimate project, that money buys raw materials
and physically moves heavy equipment to the site.
It makes sense. Right. You need capital to start
building. But in a ghost project scheme, that
15 percent is the heist. The contractor takes
the mobilization fee, maybe puts up a cheap chain
link fence or digs a single hole to make it look
active to anyone driving by. And then they vanish.
The company dissolves or the funds are laundered.
So they literally take the startup cash and run.
And because the project was based on a fake feasibility
study anyway, nobody was really expecting it
to work in the first place. Exactly. The utility
of the project was never the goal. The budget
extraction was the goal. We should probably distinguish
this from other types of bad infrastructure,
though. Because as I was reading, I kept thinking
of the term white elephant. People use that a
lot for bad projects. But that's different, isn't
it? Very different. And the distinction really
matters. A white elephant is a project that actually
is built. It's physically finished. You can walk
through its doors. But it's just useless. Right.
Maybe it's a massive multi -million dollar airport
in a city that gets zero commercial flights.
Or an Olympic stadium that nobody ever uses again.
It burns money on maintenance. It's a drain.
But... A ghost project is arguably worse because
you spent the capital, but you have absolutely
zero asset to show for it. You don't even have
a useless building. You have a void. Which brings
us to the most fascinating and frankly bizarre
part of the research packet. The article from
Third World Quarterly. Oh, the theoretical angle.
Yes. The authors use this term Gothic Marxism,
and they talk about transgressive horror. I love
that you brought this up. It sounds incredibly
academic on the surface, but it's... Actually,
the most emotionally resonant part of the research,
in my opinion. It felt like they were analyzing
a Dracula novel, not a road network. They described
these projects as a time for monsters. And at
first I was like, what are we talking about here?
It's a striking phrase. But as I read it. I started
to really understand what they meant. They aren't
talking about literal vampires or werewolves.
They're talking about the past haunting the present.
Yes. It's the idea that these abandoned structures,
these concrete skeletons resting in the jungle
or just sitting on the edge of a city, are not
just neutral objects. They are active sores on
the landscape. Gothic literature usually involves
a dark, hidden past that refuses to stay buried.
Exactly. The sins of the father and all that.
Right. So when you see a ghost project, you are
looking at a physical unavoidable... that's a
really powerful way to put it it's not just an
accounting error it's not just oh they wasted
some tax money it's a ruin of a future that never
actually happened and the horror part the transgressive
horror comes from the fact that these structures
can actually kill you That is the monster aspect
they're talking about. Think about an abandoned
half dug construction site for a massive flood
control system. It's not just an ugly eyesore.
It's dangerous. It's incredibly dangerous. It
becomes a stagnant breeding ground for mosquitoes,
which brings dengue fever or malaria to the surrounding
neighborhoods. Or it's a deep, unmarked excavation
pit that fills with rainwater where local children
can drown. Oh, wow. The very infrastructure that
was funded and promised to save. lives becomes
a literal hazard that takes them. It reminds
me of the concept of the uncanny valley in robotics,
you know, where something looks almost human,
but not quite. And it naturally revolts us. These
projects are like the uncanny valley of civic
development. They mimic the look of progress,
but they're actually just decay. And that decay
has a profound psychological toll on the people
living near it. The authors of that paper argue
that living around ghost projects creates a very
specific very deep kind of cynicism I can imagine
if you wake up every single day and look out
your window to see the skeletal remains of a
hospital that was never finished You don't just
lose faith in the specific mayor who signed the
contract. You lose faith in the entire concept
of governance. You start to believe that progress
itself is a lie. Exactly. It completely erodes
civic trust. That cynicism is arguably more damaging
long term than the lost cash. But speaking of
the cash, we really have to talk about the scale
of this. We're not talking about a few thousand
dollars missing for a park bench. No, the numbers
are astronomical. The data coming out of the
Philippines, which serves as the primary case.
in our source material is just... The Philippines
gives us the clearest, most recent data set right
now, largely because the Commission on Audit
there has been aggressively investigating this
lately. We are looking at official reports covering
the years 2023 to 2025. And the estimates for
economic losses just regarding flood control
projects alone are between 42 .3 billion and
118 .5 billion Philippine pesos. Just to put
that in perspective for you, if you're listening
globally, we are talking about. Roughly $750
million to over $2 billion U .S. dollars. Just
vanishing. And the context here is vital. We
aren't talking about a luxury tourist resort
that didn't get built. No. We're talking about
flood control in a country that gets hit by roughly
20 typhoons every single year. This is exactly
where that gothic horror theory becomes real
life. The Department of Public Works and Highways,
or DPWH, actually confirmed ghost flood control
projects in Bulacan, specifically in municipalities
like Columpet, Malolos, and Hagonoy. And for
those who don't know the geography there, what
does that mean? Bulacan is a province just north
of the capital, Manila. Geographically, it's
essentially a massive catch basin for water coming
down from the surrounding mountain ranges. If
you don't have functional levees, dikes, and
pumping stations there, entire towns go underwater.
So when a politician or contractor in Bullocken
signs off on a ghost dike, takes the money and
builds nothing, they are effectively signing
a warrant for that town to flood. Yes. The paper
reality sitting in a filing cabinet says the
town is protected. The physical reality on the
ground says the town is completely vulnerable.
And when the next super typhoon hits, the floodwaters
do not care about the paperwork. That is just
brutal. There was also a report mentioned in
the sources from journalist Iris Gonzalez. She
documented this exact same phenomenon happening,
but with different types of infrastructure. Things
like schools and farm -to -market roads in places
like Kalinga and Lanao del Sur. Lanao del Sur
is a really heartbreaking example of this. This
is an area in the southern Philippines that has
historically seen a lot of conflict and deep
poverty. In a place like that, a farm -to -market
road isn't a luxury. It's a lifeline. Exactly.
It's the literal difference between a local farmer
being able to sell their crops in the city or
having to let them rot in the field. When that
road ends up being a ghost project, you are actively
keeping that entire community trapped in poverty.
You are structurally stealing their ability to
participate in the broader economy. Why does
this keep happening, though? I mean, obviously,
greed is the baseline answer. People want to
steal money. But the American Journal of Management
Practice study. points to a complex mix of causes.
Weak oversight is one, obviously, approving projects
without those real feasibility studies. Right.
But we touched on the political cycle earlier,
and this seemed like a huge systemic driver.
It's almost like the democratic process itself.
or at least the way it's practiced in some of
these regions, incentivizes leaving things unfinished.
They call it the regime change curse. It's a
massive factor. Just imagine you get elected
as the new governor of a province. Your predecessor,
who you just defeated in a really bitter, expensive
campaign, started a massive highway project.
It's maybe 40 % done when you take office. Okay,
so I'm the new governor. I'm looking at this
half -built highway. If you spend the rest of
your term finishing it, who actually gets the
credit from the voters? The guy who started it.
I mean... His name is probably already carved
into the cornerstone. Exactly. So purely out
of political survival and ego, you have a perverse
incentive to kill that project. That is wild.
You stop the funding. You claim his project was
corrupt or poorly planned. You let the concrete
rot. And then you start your own massive project
from scratch just so you can put your name on
the shiny new cornerstone. And then four years
later, I lose the election and the next guy comes
in and kills my project. And the cycle continues.
So you end up with a landscape completely littered
with. half -finished monuments to political ego.
It's like a neighborhood deciding to build a
house and then burning it down every four years
just because they didn't like the original architect.
Nothing ever actually gets built. And that is
exactly why the management study found such a
strong correlation between political volatility
and ghost projects. Stable governance, whatever
you might think of its policies, tends to finish
things volatile highly polarized governance creates
ghosts now i want to zoom out a bit we focused
heavily on the philippines because the audit
data there is so fresh and detailed. But the
sources make it very clear that this is absolutely
not unique to Southeast Asia. They have a whole
section on global sightings. Right. It's a global
pandemic of bad management and corruption. It
affects Africa, South Asia, Latin America. Let's
look at Nigeria, for example. The source material
cites a report regarding N17 trillion in abandoned
infrastructure. N17 trillion, Nayara. Converting
that is tricky because of fluctuating exchange
rates. But just to give you an idea, we're talking
about tens of billions. US dollars. That is a
massive structural chunk of the national GDP
tied up in nothing. It is. The Chartered Institute
of Project Managers of Nigeria flagged this crisis.
They pointed to poor planning and weak institutions.
And the cultural context there is very similar
to what we just discussed, the opening ceremony
culture. Right. There is a massive amount of
political capital and press coverage to be gained
by announcing a multibillion dollar project.
There is very little political capital gained
by doing the boring. invisible day -to -day work
of maintenance or seeing a complex 10 -year project
through to completion. It's the exact same story
in India. The sources mention these literal monuments
of corruption in the state of Chhattisgarh. They
use the term crore in the report. Right. And
for our global audience, a crore is a unit in
the South Asian numbering system equal to 10
million. So when the report talks about projects
worth ours is 900 crore lying totally abandoned,
that's 9 billion rupees. Again. Hundreds of millions
of dollars just sitting in limbo. And in Mexico,
the focus of the reporting was on the health
sector. They cited 250 unfinished hospitals and
clinics across the country. 250 hospitals. That
one really hits hard. Because that brings us
directly to the concept of opportunity cost.
This is the core economic concept we really need
to hammer home when discussing ghost projects.
Let's do it. When we say the money was wasted,
people usually just think about the tax dollars
vanishing from a spreadsheet. But the real tangible
cost is what didn't happen because that money
was tied up. The surgery that didn't happen because
the hospital wasn't built. Exactly. The child
who didn't get an education because the classroom
is just a ghost on paper. The harvest that rotted
because the road is impassable mud. That is the
opportunity cost. It's not just lost money. It
effectively slows down the development of the
entire civilization. It's a theft of time and
potential. So we have the mechanics, the fake
feasibility studies, the mobilization fees, we
have the psychology, the gothic horror of the
ruin, and we have the global scale of the problem.
The picture is, frankly, pretty bleak. It is.
Is there any way to actually exercise these ghosts?
The sources mention civic participation is a
key factor, but I have to be honest, that sounds
a bit like a political buzzword. It does sound
a little fluffy, but the data actually backs
it up. The American Journal of Management Practice
Study found that regions with high civic participation
had significantly better completion rates. But
we need to be very specific about what participation
means in this context. It doesn't just mean showing
up to vote every few years. It means being annoying.
It means being incredibly... persistently annoying.
It means everyday citizens showing up to local
town hall meetings and demanding to see the receipts.
It means community groups actually driving to
the GPS coordinates of a proposed bridge and
taking photos of the empty lot. Independent verification.
Constant verification. There's a formal concept
for this called social auditing. In some of the
more successful case studies, local communities
have set up volunteer committees that literally
stand at the site and count the bags of cement
arriving. Wow. They refuse to trust the paper
reality. They only trust their own eyes. That's
a really heavy burden to place on citizens, though.
People who are already busy working and just
trying to live their lives. It's like, hey, in
addition to your full -time job and raising your
kids, you also need to be a volunteer forensic
accountant for the government. It is a massive
unfair burden. But currently, the alternative
is the ghost. Corrupt actors actively rely on
the fact that infrastructure procurement is boring.
and highly technical. They bank on the public
checking out when they start talking about zoning
and procurement laws. When the public checks
back in, the ghost strip becomes almost impossible
to pull off. Transparency is the ghostbuster.
Sunlight is the best disinfectant. When normal
people start asking, hey, where's the 15 % mobilization
fee and who exactly signed this completion certificate,
the culture of impunity evaporates. It's empowering,
but also frustrating that it's so necessary.
I want to circle back to that Gothic idea for
a second before we wrap up today. Sure. You mentioned
earlier that these ruins are physical symbols
of broken promises. Do you think there's a way
to reclaim them? Or are they just permanent scars
on the landscape? Well, some can be rehabilitated.
There are cases where a new administration, usually
under intense public pressure, revives a ghost
project and actually finishes it. But often the
physical degradation is just too severe. Rebar
rusts quickly. Concrete cracks and degrades.
They have to be torn down. Sometimes. But honestly,
sometimes the most powerful thing a community
can do is actively acknowledge the ghost. Don't
let it just fade into the background noise of
the city. Point at it. Call it what it is. Say
loudly, that is where our tax money went. Make
it a public monument to the failure of that administration
so that it doesn't happen again. That's a chilling
thought. A monument to failure. It's better than
pretending it's not there. Ghosts thrive when
people refuse to look at them. Well, we've certainly
unpacked a massive amount today. From the fake
feasibility studies and the mobilization heists
to the haunting of the Philippine countryside
and the tens of billions of dollars missing in
Nigeria and India. It's a heavy topic. It really
is. It's a stark reminder that the most dangerous
things in the world aren't always what's hiding
in the dark. Sometimes it's what's hiding in
plain sight in a municipal budget report. And
it's a reminder to look much closer at the built
environment around you. Don't just accept the
paper reality. That is exactly the thought I
want to leave everyone with today. The next time
you are driving to work or walking through your
city and you see a construction site that's been
quiet for just a little too long. Maybe the weeds
are growing up through the tracks of an abandoned
excavator. Or maybe you see a giant faded billboard
announcing a world -class health facility, but
behind the fence, it is just a pile of gravel.
Don't just drive past it. Don't just drive past.
Ask yourself, is this actual infrastructure being
built? Or is it a ghost? And if it is a ghost,
whose pocket is the money in right now? That
is the question that scares them the most. Thanks
for diving deep with us. Keep your eyes open
out there. See you next time.