Slow performance of two airport projects worries ADB

Published On: November 1, 2017 05:00 AM NPT By: Republica  | @RepublicaNepal

KATHMANDU, Nov 1: Only about 25 percent of works of Gautam Buddha Airport has completed even though the project completion date is only two months away.

Work in the Rs 5.5 billion worth airport upgradation project has remained standstill since February. 

Gautam Buddha Airport is one of the government projects that is sure to miss the completion deadline. Non-performance of Northwest Civil Aviation Airport Construction Group of China, the contractor of the project, has made the project sick and officials of Asian Development Bank (ADB), which financed the project, say they are not finding any rationale for contract extension. 

Speaking at a review meeting of the ADB-financed projects in Kathmandu on Tuesday, head of Portfolio Management of Nepal Resident Mission, Sarosh Khan, tried to find some logical commitments from the project officials which, she said, will pave the way for moving ahead for contract extension.  “Let's make a commitment of 4 percentage point growth in physical progress,” Khan sought commitment from the project officials. 
Project Manager Om Sharma made commitments to make physical progress as sought by Khan like he has done in the last two tripartite meetings this year. 

Payment dispute between the Chinese contractor and its sub-contractor - a firm owned by son of former Prime Minister Jhalanath Khanal, is still affecting the project. 

Sharma claimed in the meeting that the Chinese contractor has deployed a new management team as well as arranged needful resources to settle payment dispute with its sub-contractor. “The project has now faced a new challenge -- lack of quarries to extract construction materials as both the central government and newly elected local bodies claim that they are the authority to issue permission for extraction of aggregates,” Sharma briefed the meeting. He also expressed commitment to take needful initiatives for arranging construction materials for the project.

Likewise, other key projects that have reported slow work progress are Tribhuvan International Airport, Melamchi Water Supply Project and its associated Kathmandu Valley Water Supply Project, according to the ADB.

The process of retendering the contract of TIA upgradation is underway after termination of contract with the Spanish contractor in December last year. Similarly, the work of Italian contractor of Melamchi Water Supply Project to bring Melamchi waters to the capital city is also not at the satisfactory level. The project has missed several deadlines due to delay in tunneling works.

Deputy Director General of ADB, Diwesh Sharan, who also co-chaired the meeting, said close monitoring of progress and decisive actions are needed to accelerate implementation to ensure that these two civil aviation projects meet their targets.

Meanwhile, the investment portfolio of ADB in Nepal is growing. Its active net portfolio stands at about Rs 2.3 billion and the number of the projects is 35. 

Only 49 percent of targeted annual contract award of US$ 533 million has been achieved while only 52 percent of $339 million targeted amount has been disbursed in this year ending December-end, according to the ADB. 

ADB officials have pointed out similar problems in project performances which were highlighted in the review meetings.  “We are observing 2017 performance is again facing systematic problems -- transfer of key staff project officials, delays in approval process of land acquisition and environmental clearances, and weak implementation,” they said in the meeting.

Of the total investment portfolio of $2,348 million, urban development and water projects hold the highest portfolio of $760 million (32 percent) followed by energy projects of $602 million (26 Percent) and transport $459 million (20 percent). Reconstruction, education, and agriculture and natural resources hold 9, 6 and 5 percent of the total portfolio, respectively. 

Out of 35 projects, 10 projects have been categorized as 'winding' which means they have entered into maturity without any progresses made. 

A total of 22 projects are in implementation phases, while three are in the inception level. 
The Manila-based development partner also said that state restructuring has affected nine ADB-funded programs in different levels of the government.

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