ADB happy about project implementationThe lender, however, says achievements should not provide room to become complacent
Government projects supported by the Asian Development Bank (ADB) met 82 percent of the disbursement target in the third quarter of 2016, signalling significant progress in terms of utilisation of funds extended by the Manila-based multilateral donor agency.
Fund disbursement of ADB-supported projects stood at $131.4 million as of September-end, as against the target of $158.7 million. Although the government fell short of meeting the target set for the third quarter, the achievement is “historic”, according to the ADB.
“These achievements are already higher than the historically highest ever achieved in Nepal in terms of ADB-assisted projects,” ADB Country Director Kenichi Yokoyama told the third Tripartite Portfolio Review Meeting (TPRM) of the ADB held at the Finance Ministry on Thursday, appreciating, what he called, “serious efforts made by the executing and implementing agencies”.
This achievement, however, should not provide the government the room to become complacent, Yokoyama said, as “the progress is still far from satisfactory when looked at the annual target”.
The annual fund disbursement target set by the ADB for its project being implemented in Nepal is $232 million. The target for awarding of contracts related to ADB-supported projects, on the other hand, stands at $384 million.
The government met 74 percent of the contract award target of $311.6 million set for the third quarter of 2016. “There is still a substantial gap of $169 million for contract award and $109 million for disbursement and only around two months are left to meet those targets,” said Yokoyama. “Although, the overall performance of the portfolio looks satisfactory due to some of the good performing projects, there are a set of projects that has continuously performed poorly.”
The ADB country director was referring to poor performance of Air Transport Capacity Enhancement Project, which is overseeing expansion of Tribhuvan International Airport, and delay made by the Rupandehi District Development Committee in extending approval for extraction of aggregates required by Gautam Buddha International Airport, among others.
Yokoyama, however, praised energy project staff for delivering high contract award and urban project staff for delivering high contract award and disbursement.
Chairing the TPRM, ADB Deputy Director General Diwesh Sharan called for drastic improvement in Nepal’s portfolio saying the projects are facing similar systematic problems like frequent transfer of the key project officials, delay in approval process of land acquisition and environmental clearance, and weak implementation of the Earthquake Emergency Assistance Project, among others.
“The continued improvement of Nepal’s portfolio performance is critical to increase ADB’s assistance in future because of its performance-based allocation policy,” said Sharan.
“I urge the government to step up its efforts to enhance the portfolio performance by building fundamental capacities for project design, procurement and contract management; ensuring stable leadership in project offices; applying stringent measures in tender evaluation process; and strengthening of the monitoring process.”
Finance Secretary Shanta Raj Subedi, meanwhile, said the Finance Ministry was preparing to apply project readiness filter to overcome project implementation and start-up delays.
“The government is committed to expediting implementation of projects of national importance,” said Subedi. “All the stakeholders should be committed to improving performance of projects.”