WB unhappy with progress of key trade project
KATHMANDU:
The World Bank (WB) is not happy with the implementation of a key project that aims to reduce transport time, logistics costs and infrastructure bottlenecks to enhance bilateral trade between Nepal and India.
During a review meeting held last week, the multilateral donor agency labelled the progress of Nepal-India Trade and Transport Facilitation Project (NITTFP) as ‘moderately unsatisfactory’, citing the procurement and fund disbursement processes were moving ahead very slowly.
If this continues, WB has warned that it will cancel some of the components of the project, including grant, which may deal a blow to the country’s trade sector that booked a trade deficit of a whopping Rs 618.10 billion in the last fiscal year.
The $101-million NITTFP was approved by the WB’s board in June 2013 to help the country remove infrastructure constraints and other barriers affecting trade between the two neighbouring countries.
The project — being executed through a loan of $69 million and grant of $30 million extended by the WB’s International Development Association, and a credit of $2 million provided by the International Finance Corporation — comprises three major components.
Among these components and sub-components, progress in strengthening and modernising regulation of international trucking services is deemed ‘satisfactory’. Also, progress in restoration of pavement at Bhairahawa ICD and shed extension and shifting of railway tracks at Birgunj ICD is said to be ‘satisfactory’.
But ratings for other sub-components range from ‘moderately satisfactory’ and ‘moderately unsatisfactory’ to ‘unsatisfactory’.
A document obtained by The Himalayan Times shows that World Bank is not happy with protracted time being taken to make decisions and implementing them.
For instance, government has not been able to acquire land to build container freight station (CFS) on the premises of the now-defunct Himal Cement Factory in Chobhar even after 16 months of reaching a decision.
The private sector has been demanding establishment of CFS in Kathmandu for the last three to four decades. But demand could not be fulfilled earlier due to lack of funds.
Now, a fund of $15.5 million has been earmarked, but government seems to be dragging its feet, as the Cabinet has failed to give a go-ahead to acquire Himal Cement’s land to establish CFS.
The WB has warned the CFS component would be cancelled if the land acquisition process is not completed by September 2015.
The World Bank has also warned to cancel the component on Nepal Single Window System if the government fails to bring ASYCUDAWorld into operation by September 2015.
ASYCUDA, or Automated System for Customs Data, is a software developed by the United Nations Conference on Trade and Development (UNCTAD) and used by customs offices across the world. ASYCUDAWorld is the latest version of the software which allows traders to process customs declaration forms, submit transit documents and give away details on transport document numbers, consignors and consignees, number and kind of packages, and quantities of goods, among others, via the internet.
The Department of Customs, which is currently using ASYCUDA++, about a year ago, told THT that it was mulling over migrating to ASYCUDAWorld.
But a request for proposal to acquire the software was issued only this month, which pushed back the implementation date.
If the government fails to operationalise ASYCUDAWorld within the deadline, the WB may cancel $16.1 million grant extended to the Nepal Single Window System component. These delays have once again exposed weaknesses prevalent in the bureaucracy that are preventing the country from fully utilising funds extended by donor agencies.
In this particular project, improvements could be made if the government stops transferring secretaries frequently, appoints full-time project director, and ends leadership vacuum at Nepal Intermodal Transport Development Board, the WB document says, adding, a team of international experts is visiting Nepal in November to assess the status of the project.
“It will define terms of reference for future study and plan of action,” says the document.
Three major components of NITTFP
• Modernising transport and transit arrangements between Nepal and India by amending various trade and transit treaties, automating processing of customs transit documents, and strengthening and modernising regulation of international trucking services including axle load control and road safety.
• Strengthening trade-related institutional capacity in the country by automating processing of documents related to imports, exports and transit, and setting up trade information portal and single window system to lower trade transaction costs, improve inter-agency coordination, and reduce time taken to clear goods. The component also includes a programme on strengthening institutional capacity of project coordination office, which oversees implementation of different activities and components of the project.
• Improving trade-related infrastructure by expanding and upgrading the Narayanghat-Mugling road section, establishing a container freight station in Kathmandu, improving inland container depots (ICDs) at Birgunj and Bhairahawa, and setting up joint analysis laboratory to conduct quarantine tests, among others.
Source: THT
