ADB Projects Have Made High Achievement in Nepal

In 2016, Nepal portfolio’s financial performance in terms of contract award totaled $359 million and disbursement totaled $202 million, both highest in ADB’s operational history in Nepal. Enhanced readiness of new projects and strong project leadersh

Feb. 27, 2017, 5:45 p.m. Published in Magazine Issue: Vol.10, No 13, February 24, 2017 (Falgun 11, 2073)

With the full commitment to bring water from Melamchi by October from the project office and commitment to improve the performance of other projects, the first Tripartite Portfolio Review Meeting of 2017 concluded.

 Despite achieving higher progress, some projects have very dismal performance. Even after the conciliation of contract agreement, no body knows the date of completion of Tribhuwan International Airport. Although Gautam Buddha International Airport has made progress initially, it is now  delayed by various reasons.

Participated by secretaries, Joint Secretaries, Project officials from Nepali Government and staff from ADB,two days meeting discussed the problems intensively.

Inaugurated by Secretary of Finance Dr. Shanta Raj Subedi and Diwesh Sharan Deputy Director General of ADB South Asia Department and co-chair, the two day meeting also expressed commitment to accelerate the progress of the projects.

Finance secretary Dr. Subedi has made it clear that the government will leave no stone to accelerate the development activities particularly the implementations of the projects. “ It is happy to know that ADB’s project has made a good progress in 2016. We hope you will maintain this in coming year also,” said Dr. Subedi.

Diwesh Sharan, DDG, ADB South Asia Department said that TPRM is an important event to improve the performance of ADB supported projects and portfolio; we give very high attention and priority to it.

“ADB’s portfolio in Nepal is growing; and as of end 2016, cumulative assistance, since its operation in 1969 in Nepal, stands at $4.9 billion and the active net portfolio stands at almost $2.0 billion for 34 investment projects,” said Sharan

“I congratulate MOF, executing agencies and all project teams for the exemplary performance demonstrated in 2016 with recovery from 2015 loss due to earthquake and trade disruptions. In 2016, Nepal portfolio’s financial performance in terms of contract award totaled $359 million and disbursement totaled $202 million, both highest in ADB’s operational history in Nepal. Enhanced readiness of new projects and strong project leadership in some projects has contributed to this achievement,” said Sharan.

Clearly, Nepal’s portfolio performance has improved, however challenges remain. Of the active portfolio, 44% or $883 million is uncontracted; and $1.3 billion remains undisbursed. This is the lowest as a percentage of the active portfolio (66%), and compares well with the ADB average (for 2015) of 44% and 64%, respectively. The corresponding contract and disbursement ratios were 30.5% and 16.1%, respectively. However, given the pending amounts to be committed and disbursed, we are all here to collectively and very specifically, identify the issues project by project, and agree on actions to improve project implementation.

Building on 2016 momentum, ADB looks forward to working together in 2017 for even better performance.  Nepal’s Performance has improved steadily in recent years but challenge remains and we should focus on (a) efforts to ensure higher readiness; (b) further improvements in procurement documents and evaluation scrutiny; (c) stringent contract management to contain high implementation and fiduciary risks, and (d) sound safeguard management, including environmental management, such as dust control. 

“I would also like to highlight the slow progress of flagships projects – Earthquake Emergency Assistance, Tribhuvan International Airport, Gautam Buddha Airport, SASEC Power and Road. Melamchi Water Supply Project is expected to deliver water to Kathmandu by October of this year; however, very close monitoring of progress and measures to accelerate as needed, to ensure target can be met for this much anticipated major accomplishment,” said Sharan.

 “We have been organizing TPRM as a quarterly event since 2015. The first TPRM of the year is particularly important, since it provides opportunities to (i) retrospect the previous year’s achievement, progress made, and remaining gaps, and (ii) fix the targets for the new year while discussing and agreeing on the project-specific and generic actions towards achieving the annual targets,” said Kenichi Yokoyama, Country Director, ADB Nepal Resident Mission.

“This is my fifth year to attend the first portfolio review of the year, and I am glad that we can start with a good note about the overall performance of ADB-assisted projects last year, which we can say “notably improved”. This is thanks to the efforts of everyone to address a range of issues (including project readiness, project leadership and human resources, procurement, contract management, safeguards, and addressing complex local issues). Nevertheless, we must also say that the progress is just half way through, compared with our target of making annual execution (contract awards and disbursement) at par with annual lending (new commitment) level of $300 million in recent years,” said Kenichi Yokoyama.

We will discuss the concerned numbers and issues in a specific manner shortly, but at the beginning, I would like to highlight one particular point – critical importance of having competent Project Directors. Specifically, there is very high correlation between the strong project leadership and the performance of the project, i.e., project performance is stronger where it is led by a competent Project Director. The rapid progress of flagship projects such as Melamchi and SASEC power and transport projects are testament to this. So I would like to emphasize to all the policy decision makers and the media, to advocate and ensure that Project Directors of high priority projects are deployed from among the most competent staffs of the implementing agencies. So the practice of so-called “bhagbanda” must be refrained or abandoned, by all means, to ensure timely project execution.

“Along with such generic issues and actions, I hope that the TPRM will discuss and agree on critical issues related with high-attention projects, such as (i) how we ensure timely completion of the Melamchi and Kathmandu water distribution projects to deliver water to Kathmandu by Oct 2017 while advancing reforms of KUKL and addressing environmental concerns; and (ii) how we bring the problem projects such as TIA that is under deep trouble despite urgency of completing the works amidst heavy air traffic congestion, back on track; among others.”

“We are at the crossroad of turning Nepal’s project portfolio performance to a much higher standard, i.e., making project execution at par with, or exceeding the new commitments with quality, timelines, and efficiency. I believe 2016 has provided an essential basis and momentum, based on which we should be able to further advance the performance in 2017 towards reaching such objective,” said Kenichi Yokoyama.

Head of International Aid Coordination Division Baikuntha Aryal presented various factors in delaying the project implementation. “There is no execuse for us and we have to complete the projects on time,” said Aryal.

 

 

Best Project Management Team Award for 2016

1. Melamchi Water Supply Projet

2. Kathmandu Valley Water Supply Improvement Project

3. SASEC Power System Expansion Project

Best Project Team- Procumbent Process

1. SASEC Power System Expansion Project

Best Project Team- Environmental Monitoring

1. Decentralized Rural Infrastructure and Livelihood Project- Additional Financing

Best Project Team- Gender Equality and Social Inclusion

1. Electricity Transmission, Expansion and Supply Improvement Project

Best Performing Contractors in 2016

1. Cooperative and Muratori and Cementisiti (C.M.C) di Ravennna from Melamhci Water Supply Project

2. KEC India Ltd. (Subcontractor: Sigma Con Pvt. Ltd) from Electricity Transmission Expansion and Supply Improvement Project

3. Ashis- Mahalaxmi JV from Decentralized Rural Infrastructure and Livelihood Project- Additional Financing

Best Performing Consultants

1. Eptisa Servicios de Ingenieria S.L. Spani- BETS Consulting Services Ltd from Melamchi Water Supply Project

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