Performance of ADB-funded projects sluggish in 2018

Kathmandu, November 23

The performance of Asian Development Bank (ADB)-funded projects has been sluggish in 2018 owing to various systemic constraints, ADB stated today.

Despite recording good disbursement and contract award progress in 2016 and 2017, the overall performance of ADB projects in Nepal has lagged behind in 2018 with only 56 per cent progress achieved in terms of contracts being awarded and 36 per cent of the available funding amount disbursed in 2018.

The performance of the projects was measured based on two indicators — contract award and disbursement.

Amid the tripartite review meeting of ADB today, the multilateral development partner conveyed that of the $447 million contract award target for 2018, contracts worth only $171 million have been awarded till October end this year. Similarly, $185 million has been disbursed, out of the disbursement target of $338 million in the review period, as per ADB.

The meeting had reviewed the performance of 36 investment projects of ADB in Nepal.

Speaking at the meeting, Mukhtor Khamudkhanov, ADB’s country director for Nepal, said that ADB will continue to tackle the systemic constraints as well as project-specific problems by partnering with the government. “With major contracts to be awarded in December this year, we are hopeful that the annual contract award and disbursement will substantially increase,” he said.

However, Khamudkhanov acknowledged positive happenings during the year like acceleration of the construction works of Gautam Buddha International Airport Project and the reconstruction of schools under the ADB-supported Earthquake Emergency Assistance Project.

Shree Krishna Nepal, joint secretary at the Ministry of Finance, said that the ongoing federalism implementation process has posed some challenges along with the current inadequate fiduciary, technical, and project supervision capacity. “Nevertheless, a realistic action plan to remove key constraints could accelerate the project implementation performance of the ADB-funded projects,” he said.

On the occasion, Diwesh Sharan, ADB’s deputy director general for South Asia, said that improving project implementation performance is the key to Nepal getting more funds for development. Informing that ADB has increased the annual lending level to Nepal from about $254 million a year on average during 2014-2016 to an annual average of $551 million in 2017-2018, Sharan said, “Improved portfolio performance will help the country to sustain and further tap opportunities of increased lending space provided by ADB.”