The MFF, of which this project was a part, was only the second to be approved by the Asian Development Bank (ADB) for Pakistan’s transport sector. Processed at a time when ADB was still piloting the modality, it demonstrated how an MFF can provide projects with the necessary flexibility to adjust in scope and schedule, when required by the situation. For example, the two road segments dropped from this tranche 1 project, due to delays in the implementation of the land acquisition and resettlement plans (LARP), were picked up by succeeding tranches and likely to be completed by end-2018; further project scope reduction due to the termination of the planned works in a site plagued by armed conflict, gave way to the inclusion in the MFF of other national transport corridor sections that became part of Pakistan’s regional connectivity agenda. While outside the tranche 1 envelope, this project’s planned outcome and impact thus continue to be likely achievable under the MFF.
The SPS technology grant component completed only 3 of the planned 4 grant rounds, with only 23 small and medium enterprises (SMEs) receiving matching grants, against a target of 50 SMEs. Participating SMEs found it especially hard to comply with and understand why, after going through a lengthy screening process that required inputs and/or approval from several companies, they had to be subjected to lottery as the final selection procedure. Besides making the selection process more thorough, future similar grant programs can consider undertaking stronger and sustained outreach, awareness building, and SME business planning capacity development to attract more quality SME participants. Inclusion of smaller, non-registered SMEs can also be targeted along with looking for plausible ways to reduce the unfair competition they pose to registered SMEs.
Changes brought about by national elections had a significant impact on program implementation. Specifically, the unforeseen split of the Ministry of Industry, Mines and Energy into two line-ministries after the elections and the subsequent transfer of the Sanitary and Phytosanitary Standards (SPS) subproject to the Ministry of Industry and Handicrafts affected program disbursements and prevented the submission of audited financial statements. Similarly, the significant support provided by the Asian Development Bank (ADB) to commercialize the Industrial Laboratory Center of Cambodia was negated by changes in government priorities. Under future similar situations, ADB should more proactively intervene and engage government to implement measures to ensure that reform programs remain on track and that new executing or implementing agencies are fully aware and ready to undertake their program responsibilities.
The readiness of line ministries to embrace new concepts such as regulatory impact assessment (RIA) was limited, in view of which, the government originally planned to issue a Royal Decree by the King to ensure the participation of all the ministries early in the reform process. But as the Office of Regulatory Impact Assessment opted for the issuance only of a sub-decree by the Prime Minister, the RIA component began with only 7 of the 31 line-ministries participating. This slowed the implementation of reforms and caused the project timeline to be extended. Future similar programs should sufficiently examine and address the institutional resistance likely to be met in the implementation of new concepts and reforms. Mandating the participation of all relevant government in the reform process, as later done through Government Decision No. 132 that required all of Cambodia’s line ministries and government agencies to establish RIA working groups, may be considered at program outset.
Resettlement consultants should be engaged at least six months before the scheduled start of civil works. This would enable timely completion of the updated land acquisition and resettlement plans and eliminate the need for starting construction without the updated plans, as was the case with all the subprojects under this tranche. Close coordination between the resettlement consultants and the contractors preparing the final design should also be required. Recruiting safeguard consultants through a firm, with contracts that cover the entire resettlement implementation period, might also be necessary to avoid problems associated with frequent consultant turnover and poor performance. Under this project, such problems included poor quality of reports and work delays.
Construction of the 500 kilovolt (kV) Pleiku–My Phuoc–Cau Bong transmission line, 1 of the 3 transmission lines included in project 2 of the ADB-financed Power Transmission Investment Program in Viet Nam, was already started by the executing agency, the National Power Transmission Corporation (NPT), even while the project was still being appraised. Due diligence on environmental and social safeguards should therefore have been addressed during appraisal and included in the main project document. An environmental compliance audit should have been conducted. The social safeguards due diligence reports (DDRs) prepared at appraisal and implemented by NPT during project outset should have been disclosed right away on the ADB website, and not only after they were updated in 2014. Civil works on the transmission lines should likewise not have been commenced before the resettlement plans were updated. While these breaches did not have significant negative effects, ADB project teams in future projects should be more conscientious and coordinate with government counterparts in ensuring that the ADB Safeguard Policy Statement (2009) and Public Communications Policy (2011) are complied with
Project 6 closing date was extended once, from 30 June 2014 to 31 December 2014. The 6-month extension is typical for projects that involve ICB procurement of design–build contracts. Such projects require the finalization of preliminary designs prior to the acquisition of equipment and materials which, for the entire investment program, had extended the delivery of the design–build contracts by up to 18 months later than estimated during the MFF/project preparations. To avoid the need for extensions, which could result in additional costs, future similar interventions should ensure that enough time is provided for the ICB procurement of design–build turnkey contracts.
A project director who is deeply involved in project supervision and implementation and committed to robust oversight is critical to project success. Continuity in staffing and administration from the Asian Development Bank (ADB) resident missions, which enhances ADB implementation support, is also extremely helpful. Under this project, ADB staff worked closely with implementing consultants to provide quick and flexible responses to evolving situations. This averted problems rather than left them for review missions to address.
Engaging local communities in the implementation, supervision and monitoring of the cash-for-work and food-for-work schemes, with technical support from the line ministries, yielded rich project dividends. It fostered community ownership of the rural roads, canals, and other small infrastructure that were rehabilitated, in turn promoting their sustainability and beneficial use.
Some of the project’s original activities were modified to respond to evolving needs without compromising the project’s basic design and objectives. For example: (i) factory workers, affected by the closing of factories due the global economic crisis in 2009, were included in cash-for-work scheme; and (ii) the establishment and operationalization of the Cambodia Food Reserve System was supported despite the project’s original intention to only provide recommendations. These innovations proved greatly helpful in enhancing project performance and outcome.
Government commitment to reforms, which transcended short−term political considerations, was crucial to the success of this project. Commitment to the reform process by other key stakeholders, developed through a comprehensive consultation process and sustained dialogue, was also vital. Future PBLs should devote resources to obtain continuing feedback, ensure participation, and institutionalize the ownership of reform programs by all relevant stakeholders.
As with the earlier phase, the preparation of this project benefited from and provides a model for the consultation process undertaken by the various infrastructure divisions in ADB’s Central and West Asia Department to support program formulation. The consultations provide a platform for the discussion of lessons and exchange of knowledge from similar interventions, consideration of which improved the design and processing of this project. Replication of this practice could enhance the design as well as implementation of ADB-assisted programs/projects.
Under ADB procurement guidelines, civil works contracts exceeding 18 months shall include a price adjustment. To avoid the price adjustment, which is consistent with the standard contract conditions established by the International Federation of Consulting Engineers (FIDIC) and followed by international financing institutions (IFIs), executing agencies of large-scale infrastructure projects in Kazakhstan would compress contract duration to 18 months. The same was experienced by this project that, even excluding long winter breaks, would require much longer than 18 months to be completed. To avoid a repeat of this experience, which could lead to a lower quality of works, ADB should earnestly seek a common understanding with the Kazakhstan government of what price adjustment in international civil works contracts means and why it must be implemented. IFIs that financed other road projects under Kazakhstan’s Western Europe–Western China Corridor investment program should consider doing likewise to prevent the recurrence of the legal action taken by the Internal State Auditing Committee of the Ministry of Finance against international contractors, which could damage the reputation of Kazakhstan as an employer of large-scale civil works contracts. Particularly, IFIs including ADB can (i) undertake additional due diligence to ensure that the borrower and its executing agencies understand FIDIC contracts; (ii) require the preeminence of international over national legal practices in works and consultancy contracts; and (iii) require borrowers to train and appoint senior legal advisors who can help resolve any concerns of national authorities about international works and consultancy contracts.
Three minor changes in scope were made during project implementation. The first responded to changes in government plans that made government funding available for some activities while making others no longer necessary. The second and third were prompted by loan savings and unallocated loan proceeds. Overall, these changes enhanced the relevance of the project and bolstered its effectiveness in contributing to the realization of government development agenda and priorities.
Throughout implementation, the technical support required to carry out and continually enhance the integrated environmental management (IEM) and other new approaches introduced by the project was thoroughly examined and provided to the project implementing agencies (PIAs) and other participants. Information systems were strengthened and adapted to the changing needs of producers, supply managers, and value-addition and process managers, as well as enterprise management. The project allocated substantial resources for capacity development, which included (i) expanding the information available to project management through a project performance monitoring system that went beyond the indicators identified in the project design and monitoring framework to include all those required in effective project management and decision-making; (ii) developing PIA institutional capacity through a training of trainers program that amplified the reach of training courses in a sustainable and cost-effective manner; (iii) demonstrating new training approaches, including interactive farmer field schools, demonstration farms, and vineyards with supporting investment and information systems; and (iv) focusing on the effective use of local training resources through the development of the IEM demonstration center, managed by a public-private partnership. Replicating these approaches, while requiring a significant amount of investment, would yield invaluable and strategic socioeconomic and environmental benefits.
Completion of this subprogram substantially improved the public financial management system of PSEs, specifically in terms of financial reporting, budgeting, and internal auditing. The policy actions, however, did not deliver the desired outcome of increased PSE profitability and incomes over the short, one-year implementation period. But as it has enabled the government to calibrate its PSE reform policy and plan and targets over the medium-term, subprogram 1 succeeded in setting off the realization of long-lasting public service reforms within a realistic timeframe. While sustaining the momentum for reforms already achieved, subprogram 2, approved within the same month this subprogram closed, focused on other structural reforms to support the commercialization, efficiency, and long-term profitability of PSEs in Pakistan
Pakistan’s politics of reform, which can be complicated particularly during political transitions, needed to be closely monitored and properly responded to. While identifying pro-reform leaders was important, involving a broader support base would have helped in better managing the risks and uncertainties associated with the changing political climate and reform commitments. Nevertheless, through intensive dialogue, the subprogram was able to overcome the challenges that came along with political transitions. Future similar interventions should aim to better manage the complexity of PSE and public service management reforms by being more flexible and drawing in the broadest number of public servants to the side of reforms.
Examination during subprogram preparation of the country’s privatization experience highlighted the need for consensus to be developed on government’s role and core public services, lack of which accounted for much of the shortcomings in past efforts. Vested interests and corporate governance issues, which made it hard for PSE reforms to take off in certain sectors, were addressed right at the outset. By aligning the subprogram to the overall government PSE reform agenda, obstacles were significantly diminished, and stronger government commitment was elicited. Wide governmental interagency discussions on the costs and benefits of reforms further facilitated subprogram implementation
This subprogram has demonstrated the benefits of Asian Development Bank (ADB) internal consultations and stakeholder engagement in the design and implementation, especially of reform programs. Consultations among the relevant ADB divisions enriched subprogram formulation, specifically ensuring that (i) knowledge from previous similar experiences were built into the design and (ii) subprogram design and timing were in synergy with other ongoing and planned interventions in Pakistan by ADB and other development partners. Sustained policy dialogues generated high-level government support throughout the project cycle. Consultations with the affected public sector enterprises (PSEs) generated feedback that were most helpful in incorporating employee needs and interests to the subprogram policy actions and implementation approaches. Moving forward, the communication strategy formulated under this subprogram, which targets all key stakeholders and the general public, is expected to develop broad support and facilitate the smooth completion of the government’s PSE reform agenda.
ADB missions for this project were infrequent and did not provide strong supervision and guidance. The inception mission was fielded in a timely manner in July 2008, and the next mission was held in April 2009. However, no mission was conducted in 2010 and 2011 when procurement was ongoing. Validated rather late, the weaknesses in project design were recommended by the joint midterm review mission in 2012 to be addressed through a significant reduction in scope. Options to deliver the outputs envisaged at appraisal would have been identified and implemented early enough had regular monitoring and project review missions been conducted. Early adjustments in the original design and monitoring framework, which addressed binding constraints on skills development in the country but did not reflect the results of stakeholder analyses and consultations during project preparation, would have also been implemented.
Late procurement of works, goods, and services delayed the implementation of this project, which was physically completed only in June 2015, two years after the expected completion date. Consultants were recruited only about 14 months after loan effectiveness; the first contract for goods was signed 19 months after effectiveness; and the first civil works contracts, two years after. Weak capacity and unfamiliarity with ADB procedures of the project implementation unit accounted for the long procurement delays. ADB should do more to facilitate timely procurement in future projects. Aside from advance actions, which did not help much under this project, procurement training, handholding, and implementation support should be provided by ADB especially to new EAs and IAs. Ensuring that a favorable policy environment and institutional mechanisms are in place to support the pursuit of new and innovative approaches will also help ensure the timely and smooth implementation of ADB-assisted projects.
As this was its first road project in the state of Bihar in India, the Asian Development Bank (ADB) provided substantial inputs to strengthen the project implementation and overall sector management capacity of the RCD. Most of these inputs were delivered through technical assistance (TA), under which trainings on procurement, contract management, and safeguards were conducted; and key policies and operational guidelines ─ such as on road administration, road safety, performance-based road maintenance, and road management system ─ were prepared, most of them are now in operation. Implementation support to help the RCD do better in areas where it was weak, for example, in the implementation of environmental monitoring and management plans, was provided through regular review missions and consultations in-between missions. Being the first to use the International Federation of Consulting Engineers (FIDIC) contract templates in Bihar’s road sector, the project also exposed the state road agencies to international best practices in procurement and contract management, knowledge from which may be useful in raising the bar and improving the performance of the local road construction industry. Notwithstanding the many institutional strengthening initiatives already completed, so much still needs to be done. Time and persistence, this project has shown, are important and will continue to be required to develop state-of-the-art road agencies amid fast-changing technologies.
Of the project’s 9 civil work contracts, 7 had been completed as of loan closing in January 2013, while 2 were substantially delayed, with construction works extending until March 2016. The delays ─ attributed by the Road Construction Department (RCD) of Bihar, the implementing agency, to local insurgency and contractor nonperformance and cash flow problems ─ highlight the extent to which deficiencies in the assessment of potential risks and in the bid evaluation process can affect project implementation. The uncertainty in the progress of works and the completion schedule of the then unfinished contracts prompted the RCD not to seek an extension of the loan closing date and complete the balance in works using government resources. To avoid a repeat of this experience ─ which delayed the delivery of project benefits in certain areas and caused the cost of civil works to rise in local currency terms ─ a conscientious assessment of all potential risks during project preparation and a more thorough evaluation of bids should be undertaken in future projects.
Due to the complexity of government internal approval procedures, a 2- to 3-month delay in the release of the provincial government’s counterpart funds was experienced at the start of project implementation. The PID proactively coordinated with the Finance Department and Treasury Department in improving internal fund transfer procedures so that, in subsequent years, counterpart funds were transferred without delay to the provincial government’s project account within the first quarter of each fiscal year. This fund transfer system has since been applied to other PID externally-funded projects. Learning from this experience, it is possible for government counterparts to work out changes in their internal procedures to ensure the timely release of counterpart funds and thereby facilitate the smooth implementation of projects.
A one-year delay in the procurement of the major civil works package comprised the key reason for the two-time extension of the project completion date from 30 June 2016 to 30 September 2017. While it did not adversely affect project implementation, the delay could have been avoided had a market analysis been made on the most apt and effective contracts to tender for the project’s major civil works. Bidding failure on the two initial packages ─ international competitive bidding (ICB) for the construction of the new Khanki Barrage and national competitive bidding (NCB) for the preparation of the barrage construction site ─ despite the international roadshow and advance action on the ICB, and their eventual merger into a single ICB won by a Pakistan-based contractor highlighted this lack of market analysis. Procurement for future similar projects should explore the local construction industry, which as shown by this project, does not lack in contractors with adequate technical competence and financial and human resources to complete modern civil works with sound quality.