ADB urges timely awarding of contracts

The Asian Development Bank (ADB) asked the government to ensure capable leadership at projects and focus on implementation to execute projects on time.
Speaking at the Tripartite Portfolio Review Meeting (TPRM) of ADB-supported projects in Nepal today, ADB country director for Nepal Mukhtor Khamudkhanov gave the example of Gautam Buddha International Airport (GBIA). “The Gautam Buddha International Airport under the South Asia Tourism Infrastructure Development Project is a good example of how leadership and improved implementation arrangement can positively impact the progress of a project,” he said, adding that the project is one of the examples that has met both its contract awards and disbursement targets for this fiscal year.
“ADB values its partnership with the government and the leadership shown by the government to improve project implementation for successful and timely development outcomes,” he added .
The ADB has recently approved its latest country partnership strategy for Nepal, 2020-24, which focuses on three priority areas – improved infrastructure for private sector-led growth, improved access to devolved services, and environmental sustainability and resilience – and with an estimated $500 million to $600 million lending on an average from 2020 to 2022.
“As the volume of lending increases and the portfolio grows in the future, it is even more important that we pay attention to timely contract awards and disbursements,” Khamud Khanov said, adding that successful project implementation is key to bringing results on the ground and improving the lives of Nepali people. “The ADB will continue to help executing and implementing agencies to strengthen their capacity to plan, design, and implement ADB projects.”
The ADB disbursed $227.3 million in the first 10 months (from January to October) of 2019, which is higher compared to the same period last year. Of the net available funding amount of $2.96 billion spread over 31 investment projects and two programme loans, 54 per cent has been contracted out and 55 per cent has been disbursed as of October 31, reads a press note of the ADB.
“Challenges remain in ensuring speed and efficiency in project delivery, and such review meetings provide an excellent platform to highlight key issues of project implementation and agree on critical actions,” said revenue secretary Sisheer Kumar Dhungana, on the occasion.
Dhungana said that the challenge remains in ensuring speed and efficiency in project delivery, and such review meetings provide an excellent platform to highlight key issues of project implementation and agree on critical actions. “The executing and implementing agencies should be more sensitive for timely completion of the projects so as to get the expected results on the ground,” he added.
Since its establishment in 1966, ADB has provided almost $6 billion in financial and technical assistance to Nepal. The assistance has been provided in energy, transport, water supply and urban infrastructure services, agriculture and irrigation, and education.
ADB is committed to achieving a prosperous, inclusive, resilient, and sustainable Asia and the Pacific, while sustaining its efforts to eradicate extreme poverty. In 2018, it made commitments of new loans and grants amounting to $21.6 billion. Established in 1966, it is owned by 68 members, 49 from the region.

Earthquake reconstruction, energy projects help improve ADB's operations

Overall operations of the Asian Development Bank (ADB) in Nepal has improved as of July 31, 2019 compared with the same period last year, on the back of continued contribution to the country’s earthquake reconstruction efforts and a number of ongoing energy projects, said ADB country director for Nepal Mukhtor Khamudkhanov.
“While Nepal’s portfolio performance has improved, challenges remain and further improvement is crucial to tapping into ADB’s lending resources,” Khamudkhanov today said at the opening of the annual Tripartite Portfolio Review (TPR) meeting – organised jointly with Finance Ministry – of ADB operations in Nepal.
ADB’s lending to Nepal has increased in recent years, reaching the highest commitment level in 2018 at $592 million. Of the net available funding amount of $2.7 billion spread over 31 investment projects, 68 per cent has been contracted out and 42 per cent has been disbursed as of July 31.
“Effective project preparation and better project readiness are critical to ensuring that a project’s development impact is realised on the ground without delays,” said the head of ADB’s Portfolio Management Unit in Nepal Rudi van Dael. “Timely submission of Audited Project Financial Statements and timely closure of projects are also important in improving the portfolio performance and to avoid time and cost overruns.”
“The review process is a good exercise to examine the implementation constraints and formulate agreed actions to achieve the projected 2019 targets,” said the joint secretary and chief of Finance Ministry International Economic Cooperation Coordination Division (IECCD) Shreekrishna Nepal.
ADB’s support to Nepal’s reconstruction efforts after the 2015 earthquake totals $389 million. The reconstruction of 154 schools under the ADB-supported Earthquake Emergency Assistance Project (EEAP) is nearing completion. As of August 2019, the total disbursement for the project for this year has reached $38.75 million and is expected to meet the 2019 target of $59.53 million by the end of the year, according to the multilateral development partner.
ADB is one of the leading development partners in Nepal in the energy sector, with $554 million in commitments. “Of the $101.2 million contract award target set for 2019, some $111.2 million has already been awarded, exceeding the annual target,” a press note issued by the ADB reads, adding that this was mainly contributed by the Power Transmission and Distribution Efficiency Enhancement Project, with contracts worth $74 million awarded. “ADB is committed to achieving a prosperous, inclusive, resilient, and sustainable Asia and the Pacific, while sustaining its efforts to eradicate extreme poverty.”
In 2018, it made commitments of new loans and grants amounting to $21.6 billion. Established in 1966, it is owned by 68 members, 49 from the region.

Stop politicisation of development projects: ADB

One of Nepal's important development partners has asked the government to stop politicisation in development activities.
Addressing the first Tripartite Portfolio Review Meeting (TPRM) of the year 2017 country director of ADB Nepal Resident Mission Kenichi Yokoyama today asked the political parties to refrain from or abandon "the practice of so-called 'bhagbanda' – division of spoils – by all means, to ensure timely project execution."
Saying that the ADB-funded projects have shown notable improvement in the year 2016, he attributed the success to project readiness, project leadership and human resources, procurement, contract management, safeguards, and addressing complex local issues. "Nevertheless, we must also say that the progress is just half way through, compared with our target of making annual execution – contract awards and disbursement – at par with annual lending – new commitment – level of $300 million in recent years,” he said, highlighting the critical importance of having competent project directors.
"Specifically, there is very high correlation between the strong project leadership and the performance of the project, ie, project performance is stronger where it is led by a competent project director," he added. "The rapid progress of flagship projects such as Melamchi and SASEC power and transport projects are testament to this."
He also asked the two-day TPRM to discuss and agree on critical issues related with high-attention projects, like ensuring timely completion of the Melamchi and Kathmandu water distribution projects to deliver water to Kathmandu by October 2017, while advancing reforms of Kathmandu Uptyaka Khanepani Ltd (KUKL) and addressing environmental concerns and bringing the problem projects like Tribhuwan International Airport (TIA) that is under deep trouble despite urgency of completing the works amidst heavy air traffic congestion, back on track; among others.
In 2016, ADB's Nepal portfolio's financial performance in terms of contract award totaled $359 million and disbursement totaled $202 million, both highest in ADB's operational history in Nepal.
"Enhanced readiness of new projects and strong project leadership in some projects has contributed to this achievement," DDG at the ADB South Asia Department Diwesh Sharan said on the occasion.
ADB's portfolio in Nepal is growing; and as of end 2016, cumulative assistance, since its operation in 1969 in Nepal, stands at $4.9 billion and the active net portfolio stands at almost $2 billion for 34 investment projects. "Clearly, Nepal's portfolio performance has improved. However, challenges remain," he said, adding, "Of the active portfolio, 44 per cent or $883 million is uncontracted and $1.3 billion remains undisbursed."
It is the lowest as a percentage of the active portfolio (66 percent), and compares well with the ADB average (for 2015) of 44 per cent and 64 per cent, respectively, he added.
The corresponding contract and disbursement ratios were 30.5 per cent and 16.1 per cent, respectively. "However, given the pending amounts to be committed and disbursed, we are all here to collectively and very specifically, identify the issues project by project, and agree on actions to improve project implementation," Sharan added.
Nepal's performance has improved steadily in recent years but challenge remains, he said, asking stakeholders to focus on efforts to ensure higher readiness, further improvements in procurement documents and evaluation scrutiny, stringent contract management to contain high implementation and fiduciary risks, and sound safeguard management, including environmental management, such as dust control.
Likewise, he also highlighted the slow progress of some of the flagships projects, including Earthquake Emergency Assistance, Tribhuvan International Airport, Gautam Buddha Airport, SASEC Power and Road. Though Melamchi Water Supply Project is expected to deliver water to Kathmandu by October of this year, he asked the bank's officials to very closely monitor the progress and measures to accelerate as needed, to ensure target can be met for this much anticipated major accomplishment.
Addressing the programme, as the chair of the inaugural session, finance secretary Shanta Raj Subedi said that the better performance does not happen by accident. Asking the development partners to join hands with ministries in monitoring the projects, he asked ADB officials to brainstorm for two days and bring out doable solutions to expedite the projects.
Likewise, chief of International Economic Cooperation and Coordination Division of the Finance Ministry Baikuntha Aryal, listed some of the problems including project readiness, procurement problems, weak implementation capacity, lack of interagency coordination, resource constraints, social and political issues, project reports, monitoring and supervision, and also problems with development partners as factors that have hold the development projects back.