World Bank not happy with government performance

The government's lower appetite and consumption capacity of development aid seriously concerned multilateral donor as its funded projects have been moving in snail's pace.

During the first trimester portfolio performance review meeting held here at the Finance Ministry today, the World Bank has expressed serious concern over poor implementation of projects it has funded.

The seven projects – including Emerging Towns Project, Road Sector Development Project, Bridge Improvement and Maintenance Programme, Kabeli Transmission Project, Enhanced Vocational Education and Training Project, Nepal Health Sector Programme and Community Action for Nutrition Project-Thousand Golden Days (Sunaula Hazar Din) – that the multilateral donor has invested around $500 million are not moving smoothly, it reported. "The projects have been designated as problematic and potentially problematic on the basis of weak implementation during the first four months of current fiscal year."

The seven projects have not been able to utilise the allocated funds, conduct financial audits and procurement works on time and prepare comprehensive action plans for execution, the multilateral donor expressed concern, adding that the projects heads have been frequently transferred. "The projects have also fallen victims of red tape and bad governance," they added.

Though the government has been repeatedly committing to expedite the development works, it has not been able to spend on development works as has been planned despite timely budget for the current fiscal year.

The World Bank has pledged to invest around $1.53 billion in 20 projects ranging from education, livelihoods, and health to energy, roads, and agriculture in Nepal. But, the government has so far been able to utilise only around $877 million due to its low appetite and consumption capacity.

In the current fiscal year too, the government has committed to disburse $180 million but it has been able to disburse only $64 million in the last six months.
The delay in hiring consultant and preparation of project plans are blamed for the slow progress in the projects.

World Bank’s Emerging Towns Project that aims at improving delivery and sustainable provision of basic services and priority infrastructure in municipalities has been able to utilise only 37 per cent of allocated funds despite project approval almost four years ago in May 2011.

The donors disburse the amount committed to the government in proportion to the progress in capital expenditure in the projects supported by them. "Only $64 million has been disbursed in the World Bank-funded projects against the target of $182 million during the review period ending mid-January,” according to chief of International Economic Cooperation Coordination Division at the Ministry of Finance Madhu Kumar Marasini.

World Bank country director for Nepal Johannes Zutt urged the government to give special attention to expedite implementation of projects, slowdown transfer of staff members of the funded projects, increase consumption capacity of aid in projects and promoting good governance.  

Addressing the review meeting, finance secretary Shanta Raj Subedi repeated government's commitment to seriously monitor the donor-funded projects.