ADB may scale back its aid to Nepal in 2015-16
KATHMANDU, SEP 27 -
Amid underperformance of projects funded by the Asian Development Bank ( ADB ), Nepal might get less assistance than what it could get under the ADB ’s Asian Development Fund (ADF) in 2015-16.
According to the ADB Nepal Portfolio Performance Review 2013, the overall portfolio rating of ADB -assisted projects in Nepal was 3 until the second quarter of 2013. “If the performance ratings of other ADF countries remain the same, preliminary estimates indicate 2015-16 ADF allocation for Nepal to be only $405.4 million against a maximum of $498.9 million”, states the report. The ADF is an instrument of the ADB to offer loans at concessional rates as well as grant to countries that have the greatest development challenges.The 3 percent rating means less than 25 percent of the projects are under “actual problems”, while highest rating of 4.5 percent means less than 2 percent projects are at risk.
As of June 30, 2013, six projects were rated “at risk”, which means 20 percent of the projects are facing risks, according to the ADB . Projects failing to take ahead work for completion are considered to be at risk. “Nepal Resident Mission (of ADB ) formally conveyed this message to Ministry of Finance on August 30, 2013 with an action plan to improve performance of actual problem projects,” states the report. “These projects require
close monitoring and concerned executing agencies and implementing agencies must take efforts to prevent any projects from failing into ‘at risk’ category.”
ADB Country Director for Nepal Kenichi Yokoyama said if ADF-funded projects were at least risk category, Nepal could have got an additional $40 million from current $227 million in fiscal year 2013. “As of today, we still have enormous challenges ahead, in terms of improving portfolio performance,” said Yokoyama at the joint Country Portfolio Review meeting on Thursday.
According to Yokoyama, contracts for 60 percent of the projects were not awarded and disbursement of the money did not take place for 80 percent of projects as of August, 2013. “Ideal situation would have been the remaining of 30 percent contract award and 60 percent cash disbursement,” added Yokoyama.
He said partial budget approval, slippages in major projects like School Sector Programme and Melamchi project resulted in just 16 percent contract award and 9 percent disbursement in 2012. He, however, expressed hope the timely budget presentation and timely authorisation for expenditure as well as good performance in the areas of transport and urban sector projects would resulted in higher level of contract award.
On the occasion, Finance Secretary Shata Raj Subedi expressed disappointment for being forced to hold talks on same issues such as staff transfer, auditing, contract award and disbursement that impended timely project implementation.
At the programme, four projects—Rural Reconstruction and Rehabilitation Sector Project, Community Managed Irrigation Sector Project, Second Small Towns Water Supply and Sanitation Sector Project and Air Transport Capacity Enhancement Project—funded by ADB were awarded for excellence in delivering results.
Source: The Kathmandu Post
