Nepal's portfolio performance suffered from prolonged procurement process: ADB senior official

Slow implementation of projects financed and funded by the Asian Development Bank (ADB) has frustrated its officials. Speaking at a tripartite portfolio review meeting organized by ADB in Kathmandu on Thursday, Diwesh Sharan, the Deputy Director General of ABD South Asia Department, said the performance of ADB's investment in Nepal was hit by factors like prolonged procurement process, devastating earthquakes, and trade and transit disruption, among others. "Compared to other countries, Nepal's portfolio performance has suffered from the prolonged procurement process, weak project management capacity, and weak performance of consultants and contractors -- all of these leading to slow project implementation with low disbursement -- resulting in multiple loan and grant extensions," Sharan, who co-chaired the event, said referring to performance of its lending and grant operations. "All these are systemic issues and call for commitment and discipline in project implementation. The Nepal portfolio also indicates a low level of readiness at approval level," he added. Net ADB loans and grants to Nepal as of March 2016 was $ 1.7 billion, comprising 23 loans and 21 grants for 32 projects. According to ADB, 53 percent ($ 921 million) of the amount is still un-contracted and 72 percent ($ 1,248 million) is undisbursed. "Contract award and disbursement in Nepal is much lower than the ADB average of 47 percent and 66 percent respectively," Sharan added. He also underlined the need for the National Reconstruction Authority to urgently approve the required budget for all implementing agencies and establish fully-functional district project implementation units for the implementation of its Earthquake Emergency Assistance Project. Lamenting the delay in large infrastructure projects -- in particular Tribhuvan International Airport upgradation -- he also urged the government observe stringent contract discipline and take action against non-performing contractors and consultants. Kenichi Yokoyama, Country Director, ADB Nepal Resident Mission, however, said its annual contract award and disbursement targets are in progress. "In moving toward our medium-term goal of annually committing $500 million and disbursing a similar amount in the next several years, ADB Nepal this year established annual targets for awarding and disbursement of contracts at $414 million and $246 million respectively, which are in progress," he said. Baikuntha Aryal, Joint Secretary at the Ministry of Finance, said the problem of low capital-spending was further compounded by external factors like the earthquakes. "We are hopeful that capital expenditure will find momentum with the National Reconstruction Authority working toward rebuilding," he said. Source: Republica