Kathmandu, October 20

Contract awarding and disbursement target of the Asian Development Bank (ADB)-funded projects remained unmet in the third quarter of 2016 due to slow progress of projects in the review period.

The government had surpassed the expectation of ADB in the first two quarters, but the progress again slowed down in the third quarter.

Till third quarter of 2016, the government was able to award contracts worth $231.7 million and achieved disbursement worth $131.4 million against the target of $311.6 million and $158.7 million, respectively, according to ADB.

ADB, the Ministry of Finance and the line agencies responsible to implement the ADB-funded projects had reviewed the progress of 20 ongoing projects today in the presence of Finance Secretary Shanta Raj Subedi and ADB South Asia Deputy Director General Diwesh Sharan.

Progress of some critical projects like earthquake emergency assistance project (EEAP) and energy and transport-related projects is very slow. ADB has shown dissatisfaction over slow progress of some projects, especially those whose completion deadline has already been extended twice or more but are still lagging.

ADB has also identified project-specific issues that have not been addressed by executing and implementing agencies to accelerate project performance.

Under the Air Transport Capacity Enhancement Project, ADB has sought full-fledged resumption of international terminal building and runway extension works, as well as fast tracking court process to resolve the Pashupati quarry issue for its reopening as soon as possible. Likewise, to accelerate the works of Tanahu Hydropower Project, the government has been urged to finalise prequalification, bidding documents and issue invitation for bids and also to complete supplementary environmental impact assessment and forest clearance. Under the South Asia Sub-regional Economic Cooperation (SASEC) road project, the government needs to complete compensation distribution on remaining structures and land, according to ADB.

Today’s portfolio review meeting focused on generic issues that have been discussed regularly since a few years back. Weak project management capacity of execution agency; delays in procurement and disbursement; close monitoring and support to implementing agencies and Ministry of Finance; high risks in procurement and contract administration and weak inter-agency coordination on environment/forest clearance, and land acquisition, among others, were highlighted as major obstacles for effective and timely project implementation.

ADB has made commitment of $1.7 billion for 32 projects in Nepal and 44 per cent of the portfolio is yet to be contracted and 66 per cent yet to be disbursed.