KATHMANDU, June 22: Senior officials of Asian Development Bank (ADB) have expressed worries over slow progress in implementation of the projects financed by the regional development bank in Nepal.
Speaking at the Tripartite Portfolio Review Meeting of the ADB in Kathmandu on Wednesday, they also urged the government and concerned authorities to address the systemic issues that have delayed the execution of ADB-funded projects.
The concern of the officials comes in the wake of slow progress in performing contract award, financial disbursement and completion of the projects after a 'significant progress' in the implementation of the ADB-funded projects last year. Comparatively a better performance in the contract award and disbursement has made both the government and the ADB optimistic over setting the target for this year.
According to the multilateral development partner, only 11 percent of the targeted annual contract award of $532 million and 15 percent of the disbursement of $338 million has been achieved by the end of May. The officials also noted that project implementation has slowed in 2017 compared to the achievements last year.
“Following very significant achievements in 2016, at the first 2017 tripartite review meeting, I had noted the optimistic targets by government agencies for 2017,” Diwesh Sharan, deputy director general of the ADB's South Asia Regional Department, said. “However, in 2017, implementation progress has been slow. This highlights the importance of addressing some systemic issues like budget shortfall to avoid disruption in implementation, project leadership and transfer of key project staff, delays in approval of land acquisition and environmental clearances and weak contract management, ensuing effective implementation of safeguards,” he added.
He also expressed dissatisfaction over the slow progress of flagship projects of the ADB like Tribhuvan International Airport, Gautam Buddha Airport and Kathmandu Valley Water Supply Project. He said that the country's portfolio performance is a key to getting more assistance in future. “Continued improvement of Nepal's portfolio performance is also critical to increasing ADB assistance in future, in line with its performance-based allocation policy,” he added.
ADB has an investment portfolio of $2billion with 32 projects and 22 ongoing technical assistance projects of $35 million. Water and urban sector is the largest sector at about 30 percent of the portfolio followed by transport and energy sectors which together account for 22-23 percent of the total portfolio. Agriculture, education, earthquake response project are other major sectors where the ADB is financing various projects.
Even the Ministry for Finance is frustrated with the slow progress in implementation of the projects finance by the ADB. Finance Secretary Shantaraj Subedi even said that the project implementation record has rung alarm bells. “The progress of contract award and disbursement is far lower than the target. Achievement of only 11 percent contract award and 15 percent disbursement of the annual target is a very serious issue,” Subedi said. “This suggests immediate intervention is needed to make things happen in right and proper manner.”
ADB's Nepal Resident Mission's Officer-in-charge Sharad Bhandari, however, said that he was hopeful that the recent measures introduced through the budget speech for the upcoming fiscal year will improve budget execution. “The announcement and the reforms envisaged in the budget to improve budget execution, especially the capital expenditure, is encouraging for implementation of projects and programs,” he added.