KATHMANDU, Nov 28, 2012
Nepal failed to capitalize on loans and grants allocated by the Asian Development Bank (ADB) for the country in 2012 as bureaucratic feet-dragging and insufficient government budget led to delay in contract awarding and fund disbursement processes, an ADB review shows.
The Manila-based regional development bank allotted US$171.1 million for the purpose of awarding contracts for Nepal in 2012 and another $117.8 million for disbursement purpose. But the country met mere 40 percent of the target set for contract awards and 62 percent for fund disbursement purpose as of November 23.
Since there is only a month left for the year to end, it is believed the gap between annual target and real achievements cannot be narrowed substantially in the coming days, leaving much of the funds separated for different sectors unused.
This kind of performance is expected to hamper development initiatives of Nepal, eventually creating the pressure on economy.
“At the moment, the country´s capital investment is less than what is required. The country needs to enhance public investments substantially, in terms of both quantity and quality, in order to go into a much higher growth trajectory of 7-8 percent per annum,” Kenichi Yokoyama, country director of ADB Nepal Resident Mission, said while delivering opening remarks at the two-day Country Portfolio Review Workshop which kicked off in Kathmandu on Tuesday.
Nepal´s performance was highly praised by the ADB in 2011 when the country met 93 percent of the target of $246.5 million set for contract award purpose. During the year, the country also attained 97 percent of the target of $216.2 million set for fund disbursement.
The ADB considers 100 percent contract awards and disbursement of 20 percent of funds within first year of project approval as an idle practice. But in case of Nepal it takes over two years to award 25 percent of the total contracts and similar amount of time to disburse 10 percent of the funds allocated for disbursement purpose, ADB report shows.
“These delays are basically caused because of insufficient project readiness,” Priyantha DC Wijayatunga, chief of portfolio management unit at ADB Nepal, said.
For instance, the government takes an average of four months to sign a project agreement and another three and half months to make them effective, ADB report shows.
“A lot of time is spent on preparing bidding documents and completing other bureaucratic formalities. These factors prevent us from disbursing the amount needed for approved projects in time,” Wijayatunga said.
In case of 2012, the introduction of one-third budget also affected many projects, as it prevented the government from providing counterpart fund - money that the state has pledged to contribute in donor agency-supported projects.
ADB report shows energy related projects were the most affected in 2012 as only 37 percent of $15.02 million allocated for disbursement purpose was actually given away. Transport and communications sector also bore the brunt as only 41 percent of 20.39 million allotted for disbursement was actually distributed.
“2012 was a challenging year. We hope the ongoing workshop will discuss these issues and come up with viable actions to improve portfolio performance in terms of timely and quality implementation,” Yokoyama said.
ADB awards best projects
The Asian Development Bank has awarded three projects in recognition of their excellence in delivering results and for improving lives of the rural poor. The Rural Reconstruction and Rehabilitation Sector Project, the Subregional Transport Enhancement Project and the Secondary Town Integrated Urban Environmental Improvement Project were given the awards amidst a function held in Kathmandu on Tuesday. All of these projects are supported by the ADB.
“The awards recognize the project teams´ strong performance, efficiency in implementation and achievement of targets,” said Kenichi Yokoyama, country director of ADB Nepal Resident Mission. ”The successful implementation of these projects has significantly contributed toward maximizing ADB´s overall contribution to helping reduce poverty in the country, and in supporting efforts to promote sustainable development.”
Source: Republica
Nepal failed to capitalize on loans and grants allocated by the Asian Development Bank (ADB) for the country in 2012 as bureaucratic feet-dragging and insufficient government budget led to delay in contract awarding and fund disbursement processes, an ADB review shows.
The Manila-based regional development bank allotted US$171.1 million for the purpose of awarding contracts for Nepal in 2012 and another $117.8 million for disbursement purpose. But the country met mere 40 percent of the target set for contract awards and 62 percent for fund disbursement purpose as of November 23.
Since there is only a month left for the year to end, it is believed the gap between annual target and real achievements cannot be narrowed substantially in the coming days, leaving much of the funds separated for different sectors unused.
This kind of performance is expected to hamper development initiatives of Nepal, eventually creating the pressure on economy.
“At the moment, the country´s capital investment is less than what is required. The country needs to enhance public investments substantially, in terms of both quantity and quality, in order to go into a much higher growth trajectory of 7-8 percent per annum,” Kenichi Yokoyama, country director of ADB Nepal Resident Mission, said while delivering opening remarks at the two-day Country Portfolio Review Workshop which kicked off in Kathmandu on Tuesday.
Nepal´s performance was highly praised by the ADB in 2011 when the country met 93 percent of the target of $246.5 million set for contract award purpose. During the year, the country also attained 97 percent of the target of $216.2 million set for fund disbursement.
The ADB considers 100 percent contract awards and disbursement of 20 percent of funds within first year of project approval as an idle practice. But in case of Nepal it takes over two years to award 25 percent of the total contracts and similar amount of time to disburse 10 percent of the funds allocated for disbursement purpose, ADB report shows.
“These delays are basically caused because of insufficient project readiness,” Priyantha DC Wijayatunga, chief of portfolio management unit at ADB Nepal, said.
For instance, the government takes an average of four months to sign a project agreement and another three and half months to make them effective, ADB report shows.
“A lot of time is spent on preparing bidding documents and completing other bureaucratic formalities. These factors prevent us from disbursing the amount needed for approved projects in time,” Wijayatunga said.
In case of 2012, the introduction of one-third budget also affected many projects, as it prevented the government from providing counterpart fund - money that the state has pledged to contribute in donor agency-supported projects.
ADB report shows energy related projects were the most affected in 2012 as only 37 percent of $15.02 million allocated for disbursement purpose was actually given away. Transport and communications sector also bore the brunt as only 41 percent of 20.39 million allotted for disbursement was actually distributed.
“2012 was a challenging year. We hope the ongoing workshop will discuss these issues and come up with viable actions to improve portfolio performance in terms of timely and quality implementation,” Yokoyama said.
ADB awards best projects
The Asian Development Bank has awarded three projects in recognition of their excellence in delivering results and for improving lives of the rural poor. The Rural Reconstruction and Rehabilitation Sector Project, the Subregional Transport Enhancement Project and the Secondary Town Integrated Urban Environmental Improvement Project were given the awards amidst a function held in Kathmandu on Tuesday. All of these projects are supported by the ADB.
“The awards recognize the project teams´ strong performance, efficiency in implementation and achievement of targets,” said Kenichi Yokoyama, country director of ADB Nepal Resident Mission. ”The successful implementation of these projects has significantly contributed toward maximizing ADB´s overall contribution to helping reduce poverty in the country, and in supporting efforts to promote sustainable development.”
Source: Republica
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