ADB wants govt to shun delays in project implementation

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FE Report
The Asian Development Bank (ADB) has asked the government to accelerate the implementation of four projects, for which it lent out US $ 347.57 million, to avoid them falling into "at risk" category.
The projects are Road Network Improvement and Maintenance Project, Road Network Improvement and Maintenance Project II, Post Literacy and Continuing Education Project and Dhaka Clean Fuel Project.
Long start up delays, slow implementation progress and lack of preparedness have been identified as the main reasons why the projects are moving toward at risk category, according to an ADB aide memoir.
The Asian lender, headquartered in Manila, submitted the memo to the government Tuesday last following its 2007 Country Portfolio Review Mission, conducted during 20 May to June 12.
It fielded the mission to Bangladesh in order to assess the portfolio performance and subsequently map out an action plan.
The ADB is considered one of the largest multilateral donors of the country, with its net loan totalling $2.6 billion against 42 ongoing loans. As of December 2006, ADB's cumulative lending to Bangladesh stands at $ 8.29 billion.
"The projects require intensive care for constant attention to prevent them from falling into at risk category, by accelerating the overall project implementation, says the document, a copy of which has been obtained by the FE.
A project at risk classification means that it is below stipulated standards in implementation as set at appraisal.
The review mission, in its report, identified a two-year delay in awarding contracts for civil works and periodic maintenance for the second phase of Road Network Improvement and Maintenance Project. The bank lent out $ 126.96 million for the project.
The first phase of the project, for which $70.78 million was given, was also marked by 18 months delay, thanks mainly to the languid pace in recruitment of consultants.
The education project was delayed for its reformulation, while the energy ministry project is limping because of slow progress in CNG component. The project lending for projects are $73.21 and 76.62 million.
In addition, the bank asked the government to pay back $11.39 million from the Sundarbans Biodiversity Conservation Project, which currently remains at risk.
The bank has asked the government to address corruption risks for the ADB-aided projects in line with its anti-corruption policy.
However, the overall risk ratio for the country's loan portfolio has improved in recent years, from 16.6 per cent in 2002 to 11.1 per cent in 2006.
The low contract award ratio (23.35 per cent) and disbursement ratio 916 per cent) for Bangladeshi projects, compared to the ADB-wide average (29.32% and 23.4% respectively), are rather disappointing, the document pointed out.
In its detailed report, the ADB mission has recommended that the government should address fiduciary and corruption risks for the ADB-aided projects in line with the bank's anti-corruption policy.
The ADB team pushed for reforming the present Development Project Proforma to avert delay in project implementation.
Improved contract awards, strengthening procurement process, and enhanced monitoring and evaluation are among other recommendations included in the document.
To improve contract awards, the ADB suggested implementation of "Project Readiness Filters" by December this year. The mechanism aims at improving the contract award ratios to 24-25 per cent and the disbursement ratios to 18-20 per cent respectively to catch up with the ADB average at 29.3 per cent and 23.4 per cent.
The slow-performing agencies or contract culprits as identified by the mission include Roads and Highways, Water Development Board, Rupantorita Prakritiik Gas Company Limited, Power Development Board, Dhaka Electric Supply Authority and North West Zone Power Distribution Company Limited.
The mission had a wrap-up meeting with the government side at the National Economic Council (NEC), chaired by ERD secretary Aminul Islam Bhuiyan.