Capital Expenditure, Recurring Expenditure, and Development Planning Comments on Dr. Huda’s Address

The purpose of this note is to discuss the nature of the problems created -by the “impact of the capital expenditure on the subsequent liabilities of re¬curring expenditure”1 of the government and to suggest certain remedies for either eliminating or reducing such problems. The problem, as stated below, basically relates to the financial planning of development projects. The installation of a development project involves capital costs. The running of the project, after its completion, involves the costs of operation and maintenance, i.e., the recurring costs. The purpose of * financial planning is to maximize the surplus of returns over the costs of opera¬tion, including the maintenance and replacement costs.