Contract processing time rises sharply

  • asian development bank-funded projects
- RAJESH KHANAL, Kathmandu

Jan 18, 2015-

Contract processing time in ADB-funded projects worth above $10 million rose sharply in 2014 compared to the previous year, causing delays in implementation. Contract processing time is the time taken by the evaluation and procurement committees.

Asian Development Bank (ADB) said in its “Nepal Portfolio Performance Review 2014” the average time taken by the executing agency’s bid evaluation committee increased to 46 days in 2014 from 15 days in the previous year, while the average time taken by the procurement committee went up to 64 days in 2014 from 25 days in 2013.

The report said although efforts were made to control the time taken in the procurement process, the progress achieved in 2013 in agriculture and natural resources, water supply and other urban infrastructures were not continued in 2014.

In projects related to agriculture and natural resources, the time taken to award civil works contracts after national competitive bidding rose to 147 days from 119 days in the previous year.

Regarding water supply and other urban infrastructure and services, the time taken to award the contract after international competitive bidding almost doubled to 181 days.

The time taken for awarding international competitive bidding in the transport sector also increased to 282 days from 201 days.

The delay in the procurement process has been blamed to the delays in bid evaluation by the government’s executing and implementing agencies. Weak capacity of the staff in executive and implementing agencies in bid evaluation resulted in the delays, states the report, adding the number of representation and apprehension of investigation by oversight agencies added extra time in the procurement process in almost all the sectors.

In the case of rural infrastructure projects, contractors’ failure to submit complete information in their bids delayed the contracting process.

The report has also pointed out slow progress in energy-related projects and blamed the centralised decision making system at the Nepal Electricity Authority.

“NEA’s financial management rules requires board approval for any procurement above Rs 400 million,” states the report, adding the absence of a confirmed managing director for a long period and unfamiliarity with the ADB guidelines also hit the energy projects.

At Nepal Country Portfolio Review Mission meeting of the ADB on Sunday, government and ADB officials stressed on the need for taking measures to reduce the procurement time.

Finance Secretary Suman Prasad Sharma said longer contract awarding process along with poor capacity of the staff impeded the development of infrastructure projects. “As a result, capital expenditure remained poor,” he said.

ADB’s Country Director for Nepal Kenichi Yokoyama said low level of readiness, including slow project design, delayed the selection of consultants for projects in transport and energy sectors in particular.

“In addition, slow procurement process in energy and urban development, low performance of contractors and lack of the government commitment in improving institutional arrangement besides the financial management were among the hurdles in implementing the projects effectively,” he said.

Presenting a paper, Tika Limbu, an official at the Portfolio Management Unit of the ADB’s Nepal Resident Mission, suggested the government appoint key project staff and let them work at the same office for at least two-three years.

Diwesh Sharan, deputy director general at ADB’s South Asia Department, said Nepal has to focus on improving the absorbing capacity, contract management and financial management for having sound project management.

“The country should target increasing the infrastructure sectors’ contribution in its gross domestic product to 8-12 percent from existing 4 percent through increasing investment in the sector,” he said.

ADB honours projects

Asian Development Bank (ADB) on Sunday honoured five projects with the “Project Management Team Award” for 2013 and 2014. Those honoured are Raising Income of Small and Medium Farmers Project and Sub-regional Transport Enhancement Project for 2013 and Second Small Towns Water Supply and Sanitation Sector Project, High Mountain Agribusiness and Livelihood Project and South Asia Tourism Infrastructure Development Project for 2014. ADB also awarded Kalika Construction and Gajurmukhi Nirman Sewa with the Best Contractors’ Award. TAEC Consult and Integrated Consultants Nepal were honoured with the Best Consultant Award. (PR)

Published: 19-01-2015 09:30

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