The Asian Development Bank (ADB) expressed its dissatisfaction over the delays in awarding contracts for projects involving nearly $500 million of its loan, urging the government to step up efforts and remove dozens of barriers it identified affecting unhindered implementation of projects. The Manila-based organisation, the second largest multilateral lending agency after the World Bank (WB), provided $650 million yearly in low-cost loans to the country on an average for the last three years, mainly in infrastructure related projects, according to the estimates of Economic Relations Division (ERD).
‘33 per cent of the annual contract award target and 57 per cent of the disbursement target are achieved after 62 per cent of the year passed (2013). It is critical to step up efforts to ensure full achievement of projections and to minimize the number of projects in red and amber categories,’ reads a communication of the ADB made to the ERD last week.
Timely and pro-active addressing of project issues would minimize delays in the delivery of ‘project outcomes, and positively affect the performance based allocation of ADB funds.’
The lending agency has suggested introduction of Retainer Scheme for faster project implementation.
The ERD officials acknowledged the complexities in project implementations, but differed with the Bank’s observations of inordinate delays in contract awarding.
‘There remain some justified logics behind delays in implementing projects timely on our part. We cannot move as faster as the lending agencies normally expect in awarding contracts for development projects given the procedural complexities and bureaucratic inertia,’ a senior ERD official has told New Age.
He, however, said efforts are robust in recent period for ensuring faster project implementation.
The communication of the ADB mentioned 21 projects that have been rated ‘below than expectation’ in their process of awarding contracts, which are supposed to be completed by the end of the current year.
The projects in questions for their poor progress in awarding contracts include Ashuganj Power Station Efficiency Project involving $166 million, Upgrading of Khulna 150 MW to 225 MW Combined Cycle Power Plant with a estimated cost of $85 million, 132 KV Substations for $84 million, Drilling of Four Wells at a cost of $50 million, Construction of Water Reservoirs and Overhead Tanks for $21 million and Signaling at 11 Stations involving a sum of $16.50 million.
The Bank in its communication identified a good number of factors hindering the smooth operation of ADB-funded development projects.
Too complex project design, too many small contracts, lack of e-procurement, frequent change of project directors, lengthy procurement and manpower recruitment and lengthy process of Development Project Proposal are some of the major deterrents identified by the ADB for holding back the progress of smooth project implementations.
‘Lessons learnt from the project implementation is that too complex project designs do not work. Teams implementing complex projects need to proactively identify upcoming problems and restructure projects as appropriate and project processing team should avoid complexity in favour of robust and effective project design,’ suggests the Bank.
The communication said high turnover of counterpart staff including frequent change of project directors is hampering project progress. Provisions should be put in place to normally not transfer project directors and other key staff during project implementation.
The ADB suggested introduction of Retainer Scheme for faster project implementation.
‘Retainer Scheme (indefinite delivery contracts) where a pool of prequalified firms is established for specific services over a period of 5-7 years in sector/sectors may save a lot of time and efforts. ADB will explore if this can be implemented for selected sectors in Bangladesh,’ reads the communication.
The ERD officials said they were examining the pros and cons of Retainer Scheme proposal of the ADB as the proposal is new.
-With New Age input
