The Government of Nepal and the World Bank will redouble their efforts to improve the performance of Bank financed projects in order to ensure that they meet their development objectives. This was agreed at a joint trimester portfolio review at the Ministry of Finance today.
The implementation of World Bank financed projects has slowed down this fiscal year due to delays in the full budget and inadequate releases, compounded by weaknesses in procurement and financial management as well as frequent turnover of project staff. As a result, over 50 percent of the US$ 1.3 billion of ongoing project commitments is at risk of not meeting its intended results. Five of the seventeen projects in the portfolio have not disbursed at all so far this fiscal year. Meanwhile, delays in the submission of audit reports have affected the preparation of new projects.
Chaired by Finance Secretary Shanta Raj Subedi, the meeting agreed to develop an action plan to ensure that required budget allocations are released; procurement and financial management are strengthened; implementation issues are resolved including in power sector and roads projects; disbursement is improved; audit requirements are complied with, and staff transfers are minimized. The meeting reviewed the status of 12 projects and discussed the resolution of issues affecting implementation. Secretaries of various ministries responsible for implementing the projects and senior project officials also attended the meeting.
“The Government has authorized an additional Rs. 9 billion release for foreign aided projects to ensure speedy and efficient utilization by the ministries within the current fiscal year,” said Finance Secretary Subedi. He noted the Government’s concern with low capital expenditures and assured that efforts are being made to expedite the implementation of development projects.
“Early resolution of the implementation issues will allow Nepal to continue to demonstrate development results building on its past performance,” said TahseenSayed, World Bank Country Manager for Nepal. “Progress is especially critical as this year’s budget shortfalls have further weakened portfolio performance,” she added.
The World Bank is currently preparing its next country assistance strategy for Nepal. Meanwhile, the International Development Agency (IDA), the concessional window of the World Bank Group that provides grants and interest-free credits to its poorest member states including Nepal has recently begun global consultations on the 17th IDA cycle. IDA replenishes its funds every three years and IDA resources to member countries are determined, in large part, on the basis of their performance.