10 WB projects listed as risky, potentially risky

10 WB projects listed as risky, potentially risky

Sep 4, 2014-

A majority of World Bank-funded projects are facing a slack implementation or are not in a condition to meet the set objectives with the global lender terming them risky and potentially risky.

According to the World Bank, five of its projects are in the risky category and another five are in the potential risky category. This means that 10 out of the total 18 projects operating as of the last fiscal year are either risky or potentially risky.

The World Bank has termed projects that cannot meet the set objectives and those that suffer from very slow implementation as risky projects and those failing to meet three out of the 12 indicators of performance are considered as potentially risky projects.

The indicators are usually related to financial management, auditing, disbursement, procurement management, safeguard measures and quality of procurement.

Out of the total allocated resources of $ 1,328 million, 58 percent belongs to risky and potentially risky projects, according to the World Bank.

Although the global lender had aimed to bring down the number of risky projects and potentially risky projects to two each, the target was not met as even more projects were added in the list of risky and potentially risky projects.

In the previous fiscal year, there were only two projects in the risky category and four in the potentially risky category. The biggest donor to the country has termed the rising number of risky projects as alarming.

Among the projects that have been categorized as risky are the Emerging Towns, Enhanced Vocational Education and Training Project (EVENT), Community Action for Nutrition, Building Resilience to Climate Related Hazards and Bridges Improvement and Maintenance Programme.

The potentially risky projects are the Nepal Health Sector Programme 2 (NHSP-2), School Sector Reform Project (SSRP), Kabeli,  Irrigation and Water Resources Management Project (IWRMP) and Road Sector Development Project (RSDP).

According to an official of the World Bank, the Emerging Towns and Bridges Improvement projects are not in a position to meet the objective while three other projects have been facing implementation slackness.

No consultant has been appointed for the Emerging Towns project as per the plan whose objective is to improve delivery and sustainable provision of basic services and priority infrastructure in the participating municipalities. The project is being operated in Sunsari, Palpa, Kaski, Jhapa, Dhankuta and Baglung, according to the World Bank website.

The objective of the Bridges Improvement project is to provide safe, reliable and cost-effective bridges on the country’s strategic road network.

“There have been procurement, governance, safeguard and disbursement-related problems in the project,” said the World Bank official. “The development objective is also unlikely to be met from this project,” the official added.

Among the potential risky projects, there are some problems related to financial management in the SSRP and delays in obtaining the forest entry permit from the Forest Ministry in the case of Kabeli. In the case of the RSDP, NHSP and IWRMP, delayed submission of acceptable financial monitoring reports to the World Bank has been identified as a problem.

The World Bank official said that more projects being listed in the risky and potentially risky categories means that there has been increased problems in the quality of work during the implementation of the project.

Problems related to cost estimates, complaints regarding technical specifications and qualification criteria, cancellation of bids, non-performing contracts, weak contract management, poor quality of civil works, poor environmental safeguard performance, continued trend of spending the budget allocation in the last trimester and non-compliance with the procurement plan have been mentioned as being among the problems being faced by the projects during their implementation.

Rising Risk

Portfolio     No of projects    Commitment aid ($)    % of commitment

Problem projects    5    586m    44

Potential problem projects     5    189m    14

Projects-at-Risk    10    775m    58

Others     8    553m    42

Total    18     1328m    100

Source: World Bank

Published: 05-09-2014 09:48

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