Performance of ADB projects slows down

- BIBEK SUBEDI, Kathmandu

Nov 24, 2018-

The performance of projects funded by the Asian Development Bank (ADB) has slowed, resulting in low disbursement of funds, according to its fourth quarter report. 

ADB-funded projects have been lagging behind this year, with a majority of them failing to meet their annual target, after recording the highest disbursement and contract awards in the last two years. Out of the net available funding amount of $2.8 billion for over three dozen projects, 44 percent is still to be contracted and 64 percent is yet to be disbursed, according to the Manila-based multilateral lender.

ADB-funded projects have exhibited dismal performance just when the Finance Ministry is planning to request the multilateral lender to increase its portfolio in the country. 

Addressing a tripartite portfolio review meeting of ADB-funded projects in Nepal on Friday, Shree Krishna Nepal, joint secretary and chief of the International Economic Cooperation Coordination Division of the Finance Ministry, raised serious concern over their poor performance. 

“If it takes more than two years just to appoint a contractor for a project, there must be something wrong,” said Nepal, pointing to delays in awarding the contract for the Butwal-Narayanghat road improvement plan under the South Asia Subregional Economic Cooperation Road Improvement Project.  

He added that the ongoing federalism implementation process had posed some 

challenges on top of inadequate fiduciary, technical and project supervision capacity. “But a realistic move to remove key constraints could accelerate project implementation thereby speeding up the progress of ADB-funded projects,” he said. 

Nepal urged project staff to examine implementation 

constraints, expedite the 

procurement process and submit disbursement requests to the ADB within the agreed deadline to achieve the target set for 2018. 

Diwesh Sharan, deputy director general of the ADB for South Asia, told government officials participating in the review meeting that improving performance was the only way to secure more funds for development. 

“The ADB has increased the annual lending level to Nepal from around $254 million in 2014-16 to $551 million in 2017-18,” said Sharan. “Improved portfolio performance will help the country to sustain and further tap opportunities of the increased lending space provided by the ADB.” 

Mukhtor Khamudkhanov, the ADB’s country director for Nepal, said the multilateral lender would continue to tackle systemic constraints as well as project-specific problems with strong partnership with the government. 

“With these efforts and with major contracts to be awarded in December 2018, we are hopeful that the annual contract awards and disbursement will substantially increase,” he said. 

Khamudkhanov also acknowledged some positives during the year. For instance, the construction of major projects such as Gautam Buddha International Airport has speeded up after delays, and the reconstruction of schools under the ADB-supported Earthquake Emergency Assistance Project is nearing completion. 

Published: 24-11-2018 07:53

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