Nepal Portfolio Performance Review: Donors blame govt for project letdowns
KATHMANDU, JAN 25 -
Donors have blamed Nepal’s failure to effectively implement development projects on lack of a full budget, high staff turnover, procurement and capacity constraints in new projects, slow disbursement of funds and lack of accountability.
“The risk of a prolonged lack of a complete budget in fiscal 2012-13 and beyond will affect development expenditure,” said Kenichi Yokoyama, the Asian Development Bank’s (ADB) country director for Nepal, speaking on behalf of the donor community at the Nepal Portfolio Performance Review (NPPR) meet.
According to the NPPR report, political instability has made an impact on the government’s capital spending. Capital expenditure in fiscal 2011-12 dropped sharply against the gross domestic product (GDP), and it is expected to dip further in the current fiscal year 2012-13 in the absence of a full budget. In the last fiscal year, capital expenditure amounted to 3.6 percent of the GDP, down from 7.9 percent in fiscal 2010-11, said the Ministry of Finance. The level of capital expenditure against the GDP was 7.6 percent in fiscal 2009-10.
The World Bank (WB) stated in its assessment report at the NPPR meet that delays in passing the budget for fiscal 2011-12 led to implementation being delayed, and that this was likely to be more severe in 2012-13. “With no measures to improve expenditure management, late approval of the programme budget and frequent transfer of key decision taking officials in fiscal 2012-13 may result in lower capital expenditure below the level of fiscal 2011-12,” said the WB.
“Fiduciary risk remains high in the projects, particularly in the Local Governance and Community Development Programme under the Local Development Ministry, the School Sector Reform Programme under the Education Ministry and the Nepal Health Sector Programme under the Health Ministry,” said Yokoyama.
According to the donors , the lack of elected local bodies, parliament and chiefs in major constitutional bodies like the Commission for Investigation of Abuse of Authority (CIAA) and the Office of Auditor General (OAG) furthered the unaccountability.
“In the absence of a parliament and associated Public Accounts Committee, the already fragile system of checks and balances has become even more challenging,” said Tahseen Sayed, the World Bank’s country manager for Nepal. “Urgent actions are needed to strengthen the key accountability institutions such as OAG and CIAA and alternatives need to be considered in the absence of the Public Accounts Committee Such actions could help to mitigate the rising risk to development results and the associated assistance from Nepal’s development partners.”
Addressing the NPPR meet, Finance Minster Barsha Man Pun admitted that low disbursement of resources, delays in project implementation and timely completion had affected the entire public spending. Pun said that the government was committed to addressing the constraints including corruption. “A few high profile people found to be involved in corruption have been prosecuted,” he added.
The donors were critical of the government’s inability to present a full budget that has slowed down disbursement of resources. They fear that the next fiscal year’s budget will also suffer a similar fate. Hence, they have sought improvements in the government’s performance, and said that failure to do so would affect its desire for more development assistance to be channelled through national systems.
“Without evidence of improved performance by the government system, it will be impossible for donors to increase their use of the government system to deliver development results,” said the Department for International Development (DFID) in its NPPR report.
The donors have revealed a number of other constraints to smooth implementation of projects in last fiscal year. Yokoyama pointed out procurement, disbursement and safeguard specialists encountered more problems. As per his presentation, procurement related constraints reached 31 percent in 2011-12, up from 21 percent in the previous year in projects aided by the WB and ADB. Disbursement problems jumped to 42 percent from 15 percent, and safeguard related problems rose to 8 percent from 6 percent.
The donors have mentioned that frequent turnover of secretaries and project staff had also impeded development work. They have recorded a higher turnover in 2011-12 compared to the previous fiscal. The WB in its assessment report has mentioned a number of examples of frequent transfers of secretaries and project staff terming it as one of the key constraints.
According to the NPPR report, the secretary of the Ministry of Federal Affairs and Local Development has been changed three times since 2011. Similarly, in the last two years, there have been two secretaries at the Ministry of Energy, four secretaries at the Ministry of Education, three secretaries at the Public Procurement Monitori-ng Office and three chiefs at the Financial Comptroller General Office. “All these have in one way or the other contributed to delays in project implementation.”
The donors have complained staff changes have been even faster at the project level. For example, the project directors of the Kabeli Transmission Project, the Regional Energy Project and the Emerging Town Project did not last even a year.
Meanwhile, the project coordinator at the Rural Access Improvement and Decen-tralisation Project was changed at a critical time when the project was scheduled to close within a year. The prize for the fastest turnover goes to the Technical and Vocational Education Project which had three chiefs in one year.
Source: The Kathmandu Post
