Dismal progress seen in awarding contracts of ADB-funded projects

Kathmandu, June 21

Contract award of Asian Development Bank (ADB)-assisted projects witnessed dismal progress in the first two quarters — January to March and April to June — of this year.

The Manila-based multilateral donor had set a target of awarding contracts worth $118 million in the first quarter. However, it was able to award contracts worth just $41 million. In the second quarter, contracts worth only $61 million were awarded against the target of $199 million.

By the end of May, only 11 per cent of the targeted annual contract award of $532 million was achieved and 15 per cent of the total disbursement target worth $338 million was allocated. A total of $28 million and $49 million was disbursed in the first and second quarters, respectively.

ADB has said that the usual systemic issues like budget shortfall to avoid disruption in implementation, project leadership transfer of key project staff, delays in approval of land acquisition and environmental clearances, and weak contract management were the reasons behind the slow progress of ADB-funded projects.

During the Tripartite Portfolio Review meeting between ADB, Ministry of Finance and concerned ministries of the projects, ADB pointed out the slow progress of some flagship projects, namely, expansion of Tribhuvan International Airport, Gautam Buddha Airport, Kathmandu Valley Water Supply, Earthquake Emergency Assistance Project, and Tanahu Hydropower and SASEC Power Projects.

Addressing the inaugural session, Shanta Raj Subedi, the finance secretary, urged all the project directors to comply with the agreed action plan to expedite implementation of the projects at the ground level and achieve the quarterly and annual financial targets.

“We should overcome all systemic issues and collectively strive to maintain the remarkable performance that we had achieved in 2016,” he said.

Also addressing the inaugural session of the meeting, Diwesh Sharan, deputy director general for South Asia Department of ADB, said that continued improvement of Nepal’s portfolio performance is critical to increasing ADB assistance in the future, in line with its performance-based allocation policy.