After almost a decade, the Melamchi Project is coming close to its completion. With a delay of almost five years, the expansion of Tribhuwan International Airport is likely to take speed. Gautam Buddha International Airport is taking speed. Similarly, the reconstruction of school buildings destroyed by earthquake and transmission line projects have also made progress.
At a time when the country is still going through a political transition, the performance of Asian Development Bank (ADB)-funded development projects in Nepal improved well in 2017. They made the progress in terms of both disbursement and contract award — the two measures of progress.
The improved portfolio performance of ADB-assisted projects was revealed at the Country Portfolio Review Meeting last week. According to ADB, of the total contract award target of $533 million in 2017, the government awarded contracts worth $436 million (82 per cent of the target). The contract award of ADB-run projects stood at $359 million in 2016. Similarly, the disbursement achievement of ADB assisted projects in 2017 stood at 88 per cent, which was an increment by 30 per cent as compared to disbursements made in 2016, according to ADB. The disbursement target of ADB projects for 2017 was $339 million, while the government was able to disburse $298 million for ADB-funded projects during the year.
The achievement in both contract award and disbursement in 2017 is a record high achievement of ADB projects in Nepal, as per ADB.
ADB is one of the largest development partners of Nepal and is currently funding almost $2.4 billion for 35 development projects, supporting urban infrastructure and service, energy, transport, agriculture and natural resources, education and post-quake reconstruction, among others.
ADB has attributed the advanced procurement actions as a part of the readiness filter approved by the Ministry of Finance (MoF), utilization of project preparation facilities and the procurement reform within ADB and Nepal’s Procurement Monitoring Office for the highest performance of ADB supported projects till date in 2017.
“Despite these performance achievements of our projects in 2017, there still exist numerous challenges that should be addressed to maintain this momentum,” said Diwesh Sharan, deputy director general, South Asia Department of ADB.
According to him, a collective focus on further improvements in procurement documents, sound safeguard management, including environmental management, timely release of project budgets and stringent contract management to contain project implementation and fiduciary risks are crucial in increasing the pace of project performance in Nepal.
Similarly, Sharan also sought timely decisions on financing, procurement and contract management of crucial ADB projects like the Gautam Buddha Airport and the Tribhuvan International Airport.
“ADB will be committing more resources to Nepal in the coming days with the recent improvement in the implementation of ADB’s portfolio in 2016 and 2017,” said Mukhtor Khamudkhanov, country director of ADB Nepal Resident Mission.
“The approved loan has increased from an annual average of around $300 million per year during 2014 to 2016 to $421 million in 2017. Such resources in coming years from ADB will depend on the country’s performance assessment and portfolio performance,” he said.
Finance Secretary Shankar Prasad Adhikari expressed his commitment to timely release of budgets for projects and facilitates these projects through improved expenditure management. “All the new projects being planned will be developed by the respective provincial governments in their delineated scope of work from next fiscal year.”
For officials of Nepal government and ADB, the progress made by Nepal is a matter of satisfaction as it took years to turn the situation favorable. Given Nepal’s transition from centralized to provincial structures of government, the question now is how to maintain the progress.