Performance of ADB-funded projects moderate

State restructuring process has affected a few ADB-supported projects in terms of implementation arrangements and fund flow mechanism

Kathmandu, August 2

The performance of Asian Development Bank (ADB)-funded projects was moderate in the second quarter of 2018 (April to June), as 70 per cent progress was achieved in terms of contracts of the projects being awarded and 74 per cent of the targeted amount disbursed in the review period.

During the tripartite review meeting between ADB, government and the project team, the multilateral development partner informed that contracts worth $104 million against the target of $149 million were awarded in the review period and $108 million was disbursed to the government of Nepal, out of the disbursement target of $146 million in the second quarter.

The performance of the projects was measured based on two indicators – contract award and disbursement.

ADB has set a target to award contracts worth $447 million and disburse $338 million in 2018.

The tripartite portfolio review meeting today reviewed the performance of 19 projects under six sectors, namely air transport, energy, urban development, road transport, education and capital market

ADB is apparently unhappy with the progress of some of the projects where the progress has been dismal, and in a few it has been nil.

Progress of the Air Capacity Enhancement Project was nil as the contractor fled. There are several components in the project, including runway extension of Tribhuvan International Airport. However, the Chinese contractor – Sangshi Construction – which was contracted in November last year dropped the project, and the performance of this project in the second quarter was nil.

Likewise, contract award of other projects, like Power Transmission and Distribution Efficiency Enhancement Project and Supporting School Sector Development Plan, has not been initiated yet.

In terms of disbursement, Kathmandu Valley Water Supply Improvement Project; Regional Urban Development; Kathmandu Valley Wastewater Management and Third Small Towns Water Supply and Sanitation Sector have performed well, according to ADB.

Due to the delay in timely awarding of the contracts and low physical progress, the ADB-funded projects will not be completed at the stipulated time and cost.

Addressing the tripartite portfolio review meeting, Rajan Khanal, secretary at the Ministry of Finance, said that the government is preparing a comprehensive, consolidated and time-bound action plan for implementation of all the polices and programmes reflected in the current fiscal year’s budget along with other ongoing projects.

The Ministry of Finance has also initiated regular discussions with the ministries responsible for the development expenditure regarding project readiness, implementation modality and financing options to facilitate the smooth implementation of the projects, according to Khanal.

“We believe that the new initiative will be instrumental in completing our development projects at the stipulated time and cost.”

Finance Secretary Khanal spoke about the project implementation challenges being faced, like with the state restructuring process and other generic challenges often discussed like human resources management, technical and project supervision capacity constraints, and weak contract management. He also laid emphasis on the special considerations and critical actions based on the deep rooted problems in the projects.