The need for some project outputs can decline over time, leading to changes in scope. Such changes should be documented and reflected in the DMF to ensure that they are properly considered and would not compromise the validity and reliability of project monitoring reports and performance evaluation.
Since some of the capacity building-related components under output 2 were linked to the transmission line and substation components under output 1, no separate arrangements for consultant engagement were made for output 2. With the project management unit (PMU) focusing on output 1, the two output 1-related capacity building activities were implemented. The others were not also due to the changed needs during implementation, but this was not brought to ADB’s attention. In the absence of consultants, the EA should have included staff from relevant divisions in the PMU to at least help in output 2 progress reporting.
In the initial stages of the project, the absence of a safeguards consultant resulted in the EA unable to submit some semiannual safeguards monitoring reports. This was timely rectified and based on the monitoring reports produced during implementation, the project did not come across safeguards issues significant enough to alter its outcome or outputs.
Although it traversed mostly rural and agricultural land, the construction of a new transmission line under this project was objected to by some locals. The objections were manifested between April 2017 and March 2018, delaying construction by 226 days. The issue was cleared when the High Court came out with a verdict in favor of the executing agency (EA). The experience highlights the importance of engaging in extensive stakeholder consultations and information dissemination early enough to address issues and concerns that may impede implementation. Mitigation measures, including minimizing the slack time and cost implications of objections and complaints, should also be mapped out and implemented as soon as possible.
Against an estimated $183.2 million, the total project cost at completion amounted to $202.1 million. The cost increase was prompted by minor modifications to the technical design of the project components. The modifications also required a longer implementation period than estimated at loan appraisal. The modifications enhanced system stability and reliability and made the project more relevant. They were addressed through loan reallocations and a 6-month extension in loan closing.
In 2010, the governments of Bangladesh and India signed a memorandum of understanding to facilitate cross-border electricity trade between the two countries. In October 2013, the electricity grids of these countries were connected for the first time through a project financed by the Asian Development Bank (ADB). Building on the success of the earlier project, ADB approved two loans, aggregating $120 million, for the SASEC Second Bangladesh–India Electrical Grid Interconnection Project in September 2015. In support of the government of Bangladesh’s Vision 2021 goal of achieving electricity for all, the project was to upgrade the transmission capacity of the existing grid interconnection from 500 megawatts (MW) to 1,000 MW, allowing Bangladesh to import more electricity from India to meet increasing power demand.
The project’s expected impact was an increase in the availability and sustainability of Bangladesh’s power supply. Its anticipated outcome was an increase in the capacity of the cross-border power trade between Bangladesh and India. It comprised two outputs: (i) enhancement of the Behrampur–Bheramara power transmission link through (a) the installation of an additional asynchronous 400/230-kilovolt (kV) 500 MW high-voltage direct current (HVDC) back-to-back substation in Bheramara, and (b) the construction of a 12-kilometer (km), 230 kV transmission line from the Bheramara substation to the Ishurdi substation and associated facilities; and (ii) improved capacity of the Power Grid Company of Bangladesh (PGCB) on technical, project management, regulatory, trading and financial matters.
As some requirements were not considered at project appraisal, minor modifications were made to the design of the HVDC substation during the contract negotiation stage. The transmission line between the Bheramara and Ishurdi substations was also increased by 0.8 km. Although they increased the actual project cost by about 10% from the appraisal estimate, these modifications improved system stability and reliability and enhanced the relevance of the project.
At completion, the project fully delivered its modified physical output targets. However, since ADB loan funding was fully utilized to finance output 1, it was able to achieve only 2 of its 4 targets under output 2. Achieved targets under output 2 were those directly linked to output 1. Nevertheless, as the PGCB’s capacity to manage its financial, regulatory, and project affairs has improved through the acquisition of additional staff, streamlining of processes, and training provided through other projects, non-achievement of the other 2 targets was considered an insignificant lapse in the overall project implementation.
Substantial achievement of output targets, evaluated at 98.4%, enabled the project to fully achieve its outcome target. Against a target of 5,000 gigawatt-hours (GWh), Bangladesh was able to import 6,674 GWh of electricity from India within 1 year. Overall, the project thus succeeded in achieving its envisaged impact of contributing to increased availability and sustainability of the power supply in the country.
The PGCB was the project executing agency. It established a project management unit to take charge of day-to-day implementation.
Many public resource reforms, especially those relating to taxes or concessions as in the SPBL, have political and economic implications and are often difficult to undertake without strong ownership. The SPBL implementation success is attributable to (i) a good understanding of the vested interests, (ii) the institutional capacity of government agencies, (iii) effective partnership and coordination between ADB and the government, and (iv) a strong sense of appreciation for the overall benefits of the program.
This special policy-based loan (SPBL) was developed in close consultation with the government and development partners, including the International Monetary Bank and the World Bank, and was designed through a holistic approach. The experience demonstrated that a comprehensive and holistic consultation process can ensure effective diagnosis of the issues, leading to a strong, relevant policy matrix that prioritizes reform measures and sets realistic timelines in collaboration with the development partners.
At program preparation, Pakistan was confronted with a rapidly expanding fiscal deficit and public debt, a large balance of payments gap, and critically low foreign exchange reserves that threatened not only to compromise economic prosperity but could also lead to macroeconomic instability. A high inflation rate resulted in falling real incomes, thereby eroding the economic well-being particularly of the poor and vulnerable segments of society.
To help address the situation, the Asian Development Bank (ADB) approved a single tranche $1 billion special policy-based loan (SPBL) for the Economic Stabilization Program in December 2019. The SPBL was part of a comprehensive multi-donor economic reform program led by the International Monetary Fund (IMF) that aimed to help Pakistan mitigate the significant negative economic and social impacts of an extraordinary macroeconomic crisis. It was aligned with the country’s overarching development objectives of strengthened macroeconomic management and more sustained and inclusive growth. Its intended outcome was sustainable fiscal position with reduced external imbalances achieved. Through 11 policy actions, it sought to achieve the following outputs: (i) exchange rate management strengthened, (ii) public resource management improved, and (iii) social protection enhanced
The government fully achieved all the policy actions and therefore all the targeted outputs by 31 October 2019, more than a month prior to the SPBL approval. The program had no adverse impacts on the poor or other vulnerable groups during implementation. The policy actions were appropriately sequenced to achieve the outcome. The shock absorption displayed by the implementation of the market-based exchange rate in June 2019 enabled the State Bank of Pakistan (SBP) to proceed with a large easing of monetary policy and a sizeable expansion of export refinancing facilities that allowed gradual improvement in exports despite the global recession caused by the pandemic.
The Public Financial Management Act was promulgated in June 2019. Under that Act the government laid a Mid-year Budget Review Report in the National Assembly and published a budget manual, a budget strategy paper, and statements of contingent liabilities and fiscal risks that have been made part of the Annual Budget Statement. Treasury Single Account rules and procedures have also been finalized.
The social sector reforms in the program strengthened the cash distribution system to female beneficiaries. During the first wave of the coronavirus disease (COVID-19) in the first half of 2020, the government distributed PRs177 billion to more than 14.6 million beneficiaries, most of whom were female. This was made possible through the banking contract signed between Benazir Income Support Programme (BISP) and new bankers under the SPBL. Under the financial inclusion strategy for women (to ensure financial and digital inclusion of the target group of women), the BISP shifted to cashless banking for 7 million beneficiaries of the Ehsaas program, introduced by the government in March 2019 to address poverty and inequality comprehensive
The completed policy actions and attainment of output targets enabled the program to fully achieve its outcome targets. Specifically, a current account surplus of $1.1 billion was achieved during the first 6 months of FY2021, PRs150 billion was generated by the energy sector state-owned enterprises through quarterly tariff adjustments, 98% of BISP program beneficiaries received cash transferred through biometric verification, and the primary balance (surplus) reached 0.5% of gross domestic product by the end of FY2020. Overall, the program contributed significantly to the country’s overarching development objectives thus achieving its envisaged impact
The Ministry of Finance (MOF) was the program executing agency. The implementing agencies were the Federal Board of Revenue, the Ministry of Energy, MOF, and SBP.
While the key urban sector and executing agency for this project, the Ministry of Urban Development (MUOD), adopted a structure for GESI mainstreaming with separate budget head, this initiative faced challenges after the country’s administrative restructuring. There were no division offices and GESI units in the districts, and the sociologist’s position that used to support GESI activities was removed from the departments. Nevertheless, using the resource materials developed under this project as guide, the GESI-trained staff in the divisions can push for establishing and institutionalizing GESI in the new structure of the provinces and at the local level. This would require revising MOUD’s GESI operational guidelines 2013 to define the roles and responsibilities in all tiers of government.
Neither the ADB project team nor project coordination office could fully comprehend the financial management requirements and financial covenant issues raised during this project’s review missions. As such, they were unable to follow up on audit opinions and recurrent issues, leading to the recurrence of the same issues and delays in submitting the audited project financial statements This improved only with the inclusion of a financial management staff toward the project’s end.
Part of the project’s design innovation is the construction of modern SLS. The Nepalgunj SLS construction was successful due to continuous community engagement, cooperation among political leaders, and early implementation of a community development program targeted at communities living near the SLS. However, the SLSs in Janakpur and Siddharthanagar had to be dropped, as nearby communities did not agree to their construction. Due to haphazard operation of existing SLSs and dumping sites, there is a growing “not in my backyard” syndrome in these communities towards SWM facilities. Discord among local political leaders, inadequate coordination at inter-local level, and political misunderstanding disrupted stakeholder engagement and contributed to the two sites’ cancellation.
The initial design of this project was delayed and required modifications during implementation mainly due to the unavailability of information on existing underground utilities such as by plan profile and as-built drawings. Final designs were likewise not always comprehensive, necessitating variations for most contracts, resulting in both startup delays and contract modifications. In future, ADB should ensure that the scope of work of design consultants for urban development projects include an assessment of all existing utilities, including those underground. Also, that the consultants make every effort to meet their deliverables, comply with the agreed schedules and contract obligations, and respond to requests from client governments and ADB.
Nepal’s annual urban population growth rate averaged 3.4% between 2001 and 2011 even as the national population growth rate was 1.4% annually. The rapid urbanization pace was driven primarily by rural–to–urban migration, resulting in a declining rural population. Challenged to meet the growing urban population’s needs, municipalities had taken ad hoc approaches to infrastructure development, creating numerous problems such as deficiencies in basic urban services, growth in poverty clusters, recurrent waterlogging, poor sanitation, intermittent water supply, and limited access to transportation.
The Integrated Urban Development Project was designed to address critical urban environmental issues by providing populations in the municipalities of Dharan, Janakpur, Nepalgunj, and Siddharthanagar with better access to municipal infrastructure and services in a socially inclusive manner. These municipalities were chosen for their economic growth potential demand for urban services, and urban management capacity. The project was funded by a loan of $44.8 million and a grant of $12 million, approved by the Asian Development Bank (ADB) approved in February 2012. At the outcome level, it envisaged providing the populations inclusively better access to improved municipal infrastructure and services. Its intended outputs were (i) reliable municipal infrastructure developed; (ii) community development programs (CDPs) undertaken, and gender equality and social inclusion (GESI) capacity strengthened; and (iii)project management and administration supported.
Out of 15 output targets, the project exceeded 6, achieved 8, and partially achieved 1. Existing drainage lines were rehabilitated, and new ones were constructed. Roads were improved, and new water supply lines were installed. However, while the project aimed to construct sanitary landfill sites (SLSs) with resource recovery facilities for solid waste management (SWM) in 3 project municipalities, it was able to do so only in 1. Exceeding targets, community development plans (CDPs) were implemented in 96 poverty clusters of 84 poor settlements, with over 54% women’s representation in the CDP committees. GESI operational manuals, toolkits, and checklists were developed and the target to use these in the Ministry of Urban Development (MUOD) and its departments was reached. Capacity development activities helped to improve project management skills and efficiency, resulting in reduced bid evaluation time and efficient contract management, however, falling short in the target to achieve timely submission of quarterly, safeguard, and audit reports, among others
Largely successful attainment of intended outputs enabled the project to exceed 2, achieve 2, and partially achieve 1 of its 5 outcome targets. Stormwater drainage systems constructed under the project dramatically reduced waterlogging and related hygiene and public health projects. Flooding duration likewise dropped in all project areas. Drinking water scarcity in Dharan was addressed by providing services to more than 95% of households and doubling the amount of water generated daily in 2020 from its 2010 level. However, the target of supplying households with water 16 hours a day was not met. Project activities such as community health and hygiene awareness, distribution of waste collection machines and equipment, and establishment of an SLS facility have led to expanded household waste collection in the project municipalities. In 100% of the poor settlements, basic services delivery and hygiene, sanitation, and waste disposal practices improved with the implementation of the CDPs. Overall, the project thus achieved its anticipated impact of improving the urban environment in the project municipalities, leading to reduced incidence of diseases and improved living standards.
MOUD was the project executing agency. Day-to-day implementation was through the project coordination office established at the Department of Urban Development and Building Construction.
The financial management arrangements of the borrower and EA were robust. Separate project financial accounts were maintained and audited by statutory auditors. Except for fiscal year (FY) 2018, APFSs were received, albeit with delays up to 3.6 months from the due dates but within the grace period of 6 months. The APFS for FY2018 was rejected because it included a combined audit report for all three projects despite the requirement for separate reports and opinions. Also, the AEFSs for FY end-2017 and prior years were combined with the APFS. All non-compliances could have been mitigated with tighter monitoring from ADB.
The number of overhead water supply tanks built under the project was reduced from 10 to 8 because of poor contractor performance. But the outcome target of augmenting potable water supply by 23.5 million liters per day (MLD) was substantially achieved and reached 20 MLD with the installation of 19 tube wells and by replacing more pumps and other electro-mechanical equipment than targeted (148 actual against the 112 target). The adjustments also resulted in an additional 10,200 people in low-income or poor households (against the target of 3,800) benefiting from the increase in water supply. These accomplishments demonstrate how being outcome-oriented could lead to better results. Nevertheless, the design could have considered incorporating more comprehensive solutions, such as 24x7 water supply with O&M arrangements, into construction contracts. This would have maximized the benefits from the improved water supply systems and enhanced the sustainability of both the project benefits and assets.
The recruitment of a new project management consultant (PMC) and a new design and construction supervision consultant (DSC) for the MFF, although late, worked favorably for this project. The new PMC and DSC performed substantially better than their predecessors. However, the delivery of their services was hampered by site constraints, design changes, and delays in finalizing the drawings. In future, a realistic timeframe for consultant recruitment, detailed design development, and civil works contracts, should be ensured during loan preparation and appraisal.
The financial sustainability analysis conducted at MFF completion showed that there are enough state operating receipts to meet the O&M expenses of the project facilities. Given that the operating institutions did not achieve recovery of the O&M costs as envisaged at appraisal, fiscal transfers from the state and central governments need to continue to ensure the sustainability of the project assets.
The project’s target to have the municipalities adopt the accrual-based accounting system and publish their balance sheets from fiscal year 2015 were only partly achieved. The target to have semi-autonomous water supply entities prepare and adopt organizational development plans was achieved but with delay. So was the target to install a more efficient water billing and collection system that materialized only post-project completion. Therefore, it became evident that the reform targets were rather ambitious considering the state’s limited capacity and the local context, including frequent local unrest, which required a longer implementation period.
The overlapping implementation periods between project 1 and then-ongoing ADB Loan 2151 and other national programs, and concurrent preparation and appraisal of projects 2 and 3 of the MFF imposed a heavy burden on the ERA. Exacerbating this burden was the initially weak capacity of project implementation units (PIUs). ADB providing greater implementation support, particularly for the preparation of subsequent tranches, would help address this challenge in future MFFs. Such support would also help enhance the quality of subsequent tranches of the MFFs and mitigate the risk of implementation delays.
Safeguards implementation arrangement in the executing agency (EA) was adequate. A chief engineer was deputed as director of safeguards and supported by four environmental and resettlement experts. Two officers from the state revenue department were posted as land acquisition officers. These land acquisition officers provided much-needed support to the high-powered committee Divisional Level Committee established by the state government to fast track the implementation of the resettlement plans for subprojects under the project. Creating a land acquisition office in the PMU to manage unavoidable involuntary resettlement may be explored in ongoing and future projects.
Project 2 was completed with a minimal 3-month delay. This was attributable to, among other things, the preparation of better detailed designs concurrent with project 1 implementation.
The Jammu and Kashmir Urban Sector Development Investment Program was approved by the Asian Development Bank (ADB) for a multitranche financing facility (MFF) of $300 million in May 2007. It was designed to expand and upgrade urban services and strengthen institutional capacity in the major urban areas of the state to Indian national and state standards. The MFF was to be provided in three tranches.
Project 2 was approved for a loan of $110 million in October 2012. Its expected impact was improved living environment in Jammu and Srinagar and its anticipated outcome was improved urban services in the same towns. Its planned outputs were (i) water supply infrastructure improved, (ii) urban transport infrastructure improved, (iii) drainage infrastructure improved, (iv) project management system operational, and (v) institutional capacity of Economic Reconstruction Agency (ERA) and urban local bodies (ULBs) strengthened. The project 2 results were to contribute to achieving the MFF’s expected impact of sustainable economic growth in the project towns as well as to the MFF’s expected outcomes of (i) improved living environments and employment opportunities in Srinagar and Jammu, and (ii) improved capacity in participating institutions to manage sector reform and service deliver
At completion, of the 18 output targets, the project achieved 14, partially achieved 2, and did not achieve 2. Weighing the indicators against the actual cost of each component, overall achievement of output targets was assessed at 90%. The weighted achievements per infrastructure subprojects are: 13% for water supply, 39% for transport, 25% for drainage, and 2% for solid waste management. The weighted achievement for institutional capacity development and project management was 10%.
Project 2 output achievements in all the urban infrastructure improvements directly contributed to the subprojects’ achieved outcome. Of 5 outcome targets, the project achieved 4, one with delay, and did not achieve 1. Weighted achievement of targets based on costs was 87%. The water supply subprojects (i) increased average water supply from 90 liters per capita per day (lpcd) to 135 lpcd (national standard) and (ii) provided access to potable water supply of 70 lpcd (national standard for areas without sewerage) for an additional 10,200 people against the target of 3,800 people. Drainage improvements reduced water logging, with the executing agency (EA) reporting no incidence of inundation in the project areas. Average travel time in the flyover corridor was cut by around half.
Overall, project 2 benefited 0.54 million people with access to municipal water supply services, contributing to the MFF’s target of 2.2 million people. The functional drainage system benefited 1.4 million people and contributed to the facility’s target of 2 million people. Access to better road infrastructure benefited 1.4 million people and contributed to the facility’s target of 2.4 million people. The implementation of the gender action plan resulted in some strategic gender benefits in the core area of gender equality in human capital development. The project also contributed to stronger financial management by the urban local bodies and the Public Health Engineering Department.
As with the MFF, the project had the Economic Reconstruction Agency (ERA) as EA. ERA established a dedicated project management unit and project implementing units in the project towns to carry out the MFF.
At appraisal, this project was classified category A for involuntary resettlement and indigenous peoples and an indigenous peoples’ development framework was prepared to guide the selection and preparation of an additional subproject where impacts on indigenous peoples were identified. During implementation, no indigenous peoples were impacted as none of the two landowners affected by the project’s acquisition of 0.47 hectares of land for resettlement purposes belonged to a scheduled tribe. Therefore, no additional indigenous peoples safeguards documents such as an indigenous peoples plan needed to be prepared. However, the project was not recategorized B for involuntary resettlement and C for indigenous peoples, which would have highlighted the project’s strong adherence to a key ADB principle to avoid and minimize resettlement impacts.
Financial management arrangements of the borrower and executing agency were robust and counterpart funding timely. Separate project financial accounts were maintained and audited by statutory auditors. For FY2008, no APFS or AEFS were submitted. The APFS for FY2018 was rejected as it included a combined audit report for all three projects despite separate reports and opinions being required. These non-compliances could have been avoided had ADB monitored and followed up closely on the submission of the documents.