Print Edition - 2015-03-09 | MONEY
WB-financed projects miss spending target
Mar 8, 2015-
Spending by projects funded by the World Bank (WB) has been poor with disbursement reaching 5.3 percent as of January-end compared to the target of 13.2 percent.
According to the WB, disbursement amounted to Rs 38.06 million during the period against the projected Rs 94.6 billion. The annual disbursement target for this fiscal as of Jan-end is 26.2 percent, or $188 million out of the total allocation.
The ineffectiveness of the government machinery is clearly visible here as almost all of the WB’s funding is channelled through the government system, a WB official said. “Until the government enhances its capacity to spend, the situation won’t change,” the official said.
For the last few years, the government’s capacity to spend has been poor. Despite talk of improving the situation, no sign of progress has been seen with just 20 percent of the capital budget being spent as of March 5. Given the poor disbursement pattern during the last six and a half months of this fiscal year, the WB was forced to make a downward revision of its disbursement to 24.5 percent ($175.99 million). In the last fiscal year, disbursement was 29.4 percent ($221.05 million), which was one of the highest performances in South Asia, according to WB.
There are nine WB-funded projects where disbursement has been zero or nearly zero as of January-end. According to the WB, these projects are the School Sector Reform Project, Nepal Health Sector Reform Project, Poverty Alleviation Fund Project, Kabeli-A Hydroelectric Project, Rural Water Supply and Sanitation Improvement Project.
Likewise, other projects are the Irrigation and Water Resources Management Project, Community Action and Nutrition Project, Kali Gandaki Project and National Rural Transport Project. During a consultation meeting held about the performance of WB-funded projects last week, the participants raised concern over the slow disbursement.
According to Madhu Marasini, chief of the international cooperation coordination division at the Finance Ministry, it was decided during the meeting that the finance secretary should once again write to the ministries known for poor performance and urge them to speed up work on WB-funded projects.
More than half of the WB aid commitment has gone to risky projects which have been categorized as problematic projects or potential problem projects. The WB has termed projects that cannot meet the set objectives and those that suffer from very slow implementation as problematic projects, and those failing to meet three out of the 12 indicators of performance are considered as potentially problematic projects.
The indicators are usually related to financial management, auditing, disbursement, procurement management, safeguard measures and quality of procurement. Of the total aid commitment of $1.58 billion, $818 million has been allocated for these projects. Nepal-India Electricity Transmission and Trade, Kabeli-A Hydroelectric Project, Kaligandaki-A Hydropower Plant Project and Bridges Programme Support are substantial risk projects.
The Emerging Town Project and Community Action for Nutrition Project are actual problem projects.
Likewise, Irrigation and Water Resource Management, National Health Sector Programme, Strengthening National Rural Transport Project, School Sector Reform Project, Kabeli Transmission Project and Poverty Alleviation Fund Project have been categorized as potential problem projects.
Published: 09-03-2015 08:52