MoF takes steps to remove ADP execution deficiencies
Thursday, 25 November 2010
Nazmul Ahsan
The Ministry of Finance (MoF) has identified a number of major deficiencies in the process of approval and implementation of development projects and recommended a set of remedial measures.
It, among others, has suggested doubling of the implementation cost of development projects that do not require approval from the Executive Committee of the National Economic Council (ECNEC), a top official in the ministry said.
The ministry has identified seven major deficiencies in the process of Annual Development Programme (ADP) implementation and suggested for reducing the time taken for approval of projects from five months to three months.
The MoF recommendations have recently been sent to the Ministry of Planning (MoP) to amend the existing project approval procedures and fine-tune the implementation process to help the maximum utilization of public investment funds, sources said.
Currently, a development project worth more than Tk 250 million needs approval from the ECNEC that often causes unusual delay, officials said.
Besides, under the current provisions, a development project proposal has to complete nine steps involving an average time of 147 days before getting final nod from the ECNEC, headed by the Prime Minister.
The officials in the Planning Commission said nearly one third of the total development projects each, included in the ADP, is worth less than Tk 250 million. In the current ADP, which is Tk 385 billion, has 916 approved projects.
"The projects costing less than Tk 500 million each could easily be approved by the MoP to avoid delay and unnecessary formalities in their approval process," a MoF official said.
He expressed the hope that the authorities concerned would respond positively to the MOF suggestions as the MoP is also in favor of expediting the entire process of development project implementation.
The MoF in its suggestion said prior to approval of the large development projects feasibility study for each of such projects should be conducted. The proposed study and evaluation of development projects could be completed by outsourcing to competent institutions, the suggestion added.
According to the Medium Term Macro-Economic Framework of the government, the allocation of ADP is supposed to be increased from the current 4.9 per cent of GDP to 6.6 per cent by 2014-2015.
"The envisaged growth in ADP allocation and its implementation by 2014-2015 would be an absurd proposition if the existing procedures for approving and implementing the development projects are not overhauled without further delay," a top finance official said.
The finance ministry in its proposal observed that in the absence of a maximum ceiling for resource allocation in the case of revised development projects often the project costs are hiked abnormally.
The proposal categorically suggested fixation of a maximum hike of 25 per cent over the original allocation for any revised development project.
The seven loopholes in the process of implementation of ADP, as identified by MoF are-unrealistic estimation by administrative ministries against development projects and not prioritizing projects by the ministries, culture of not appointing full time and efficient project director, cumbersome process in appointing project consultant and land acquisition, not realizing funds in time, lack of expenditure plan to match the procurement plan, finalizing development projects without feasibility study and absence of regular monitoring and evaluation by administrative ministries.
The Ministry of Finance (MoF) has identified a number of major deficiencies in the process of approval and implementation of development projects and recommended a set of remedial measures.
It, among others, has suggested doubling of the implementation cost of development projects that do not require approval from the Executive Committee of the National Economic Council (ECNEC), a top official in the ministry said.
The ministry has identified seven major deficiencies in the process of Annual Development Programme (ADP) implementation and suggested for reducing the time taken for approval of projects from five months to three months.
The MoF recommendations have recently been sent to the Ministry of Planning (MoP) to amend the existing project approval procedures and fine-tune the implementation process to help the maximum utilization of public investment funds, sources said.
Currently, a development project worth more than Tk 250 million needs approval from the ECNEC that often causes unusual delay, officials said.
Besides, under the current provisions, a development project proposal has to complete nine steps involving an average time of 147 days before getting final nod from the ECNEC, headed by the Prime Minister.
The officials in the Planning Commission said nearly one third of the total development projects each, included in the ADP, is worth less than Tk 250 million. In the current ADP, which is Tk 385 billion, has 916 approved projects.
"The projects costing less than Tk 500 million each could easily be approved by the MoP to avoid delay and unnecessary formalities in their approval process," a MoF official said.
He expressed the hope that the authorities concerned would respond positively to the MOF suggestions as the MoP is also in favor of expediting the entire process of development project implementation.
The MoF in its suggestion said prior to approval of the large development projects feasibility study for each of such projects should be conducted. The proposed study and evaluation of development projects could be completed by outsourcing to competent institutions, the suggestion added.
According to the Medium Term Macro-Economic Framework of the government, the allocation of ADP is supposed to be increased from the current 4.9 per cent of GDP to 6.6 per cent by 2014-2015.
"The envisaged growth in ADP allocation and its implementation by 2014-2015 would be an absurd proposition if the existing procedures for approving and implementing the development projects are not overhauled without further delay," a top finance official said.
The finance ministry in its proposal observed that in the absence of a maximum ceiling for resource allocation in the case of revised development projects often the project costs are hiked abnormally.
The proposal categorically suggested fixation of a maximum hike of 25 per cent over the original allocation for any revised development project.
The seven loopholes in the process of implementation of ADP, as identified by MoF are-unrealistic estimation by administrative ministries against development projects and not prioritizing projects by the ministries, culture of not appointing full time and efficient project director, cumbersome process in appointing project consultant and land acquisition, not realizing funds in time, lack of expenditure plan to match the procurement plan, finalizing development projects without feasibility study and absence of regular monitoring and evaluation by administrative ministries.