Projects funded by the Asian Development Bank (ADB) in Nepal have been performing dismally, resulting in low fund disbursement and fewer contract awards, second quarter reports reveal.

The multilateral lending institution had set a target to disburse $339 million in 2017. However, only $49 million, or 14.45 percent of the target, had been disbursed as of the second quarter. 

Similarly, the ADB had aimed to award contracts worth $533 million in 2017, but contracts valued at only $61 million had been awarded as of the first half of the year. This represents 11 percent of the annual target. 

Considering current performance patterns, it would seem to be impossible to achieve even 50 percent of the target by the end of the year. 

The first two quarters have been a disaster compared to the record breaking performance of ADB-funded projects last year. 

In 2016, disbursements reached 89.5 percent of the target, and contract awards for ADB-funded projects reached 89 percent of the target.  

Addressing a tripartite portfolio review meeting of ADB projects in Nepal on Wednesday, Finance Secretary Shanta Raj Subedi raised serious concern over their dismal performance. 

“Despite various efforts, our project performance has not been satisfactory. Almost all projects are lagging behind and are not delivering results on time,” said Subedi. 

“This points to a need for immediate intervention to make things happen in the right and proper manner. If the Finance Ministry needs to do something, I am ready for anything.” 

Poor performance by the Melamchi Water Supply Project, Gautam Buddha International Airport, Supporting School Sector Development Plan, South Asia Subregional Economic Cooperation (SASEC) Power System Expansion, Earthquake Emergency Assistance Project and Kathmandu Valley Water Supply Improvement Project is the major reason behind the low disbursement.

“Another 3 km of tunnel needs to be dug for the Melamchi Water Supply Project. I have been informed that only 11 metres of tunnel is being dug daily,” said Subedi. 

“At this rate, it will take almost nine more months to complete the tunnel alone.” 

He requested all stakeholders to make all-out efforts to expedite the Melamchi project and achieve the October target. 

Diwesh Sharan, deputy director general of the ADB’s South Asia Department, agreed with Subedi and said some systemic issues must be addressed to expedite the project. 

“The slow progress highlights the importance of addressing some systemic issues like budget shortfall to avoid disruption in implementation, frequent transfer of project leadership and key staff, delays in approval of land acquisition and environmental clearances and weak contract management,” said Sharan.