The actual cost of this project was about 29% lower than estimated because of the appreciation of the US dollar against the Indian rupee, the overestimation of contingencies, and the dropping of two subprojects. A more modest contingency allocation, which was well within project control, would have helped minimize the ensuing partial loan cancellations.
Frequent transfer of the program directors in Uttarakhand delayed the decision-making process and had a negative impact on the working environment in the project management unit and project implementation units during the early stage of implementation. The state government and the borrower needed to intervene to resolve the issue.
Notwithstanding prior damage and needs assessments, the outputs and outcome targets of EAL cannot always be specified accurately at project preparation stage. Therefore, flexibility is required in target-setting and the assessment of outcomes. Following this approach, the project was deemed highly effective in achieving its expected outcome, despite shortfalls on two output targets that were aspirational.
The performance of the design and supervision consulting firms recruited by this project through the quality- and cost-based selection procedure was less than satisfactory. They delayed mobilization or only partially mobilized key personnel, frequently replaced them, and sometimes performed deficiently, particularly during the initial stages of implementation. Regular performance reviews of consultants by the project management, project implementation units (PIUs), and ADB resulted in improvements. PIUs had to deploy additional staff members to supervise works to ensure their timely implementation and quality. In future, it might work better if consultants for projects in remote and hilly regions, which are less likely to attract good consultants, are engaged using the quality-based selection procedure. Direct supervision by EAs/IAs may also be necessary in such situations.
Due to the urgency of this project, its design incorporated flexible and special provisions for speedy and effective procurement. All contracts were estimated below $40 million and procured under national competitive bidding, with a shortened bidding period of 2 weeks. Shopping procedures were used to procure the works for the reconstruction of damaged trekking routes and the rehabilitation of major chronic slip zones. ADB reviewed bid evaluation reports and contract award recommendations for the first two contracts for each implementing agency, irrespective of the contract values, and for contracts with an estimated value of more than $3 million. While the flexible and special arrangements were effective and reduced the time required to award the contracts, bidding and procurement procedures still need to be shortened further.
Affected households under this project, especially those from ethnic minority groups, generally did not reinvest in agriculture production activities. ADB and the provincial governments should have carried out a systematic evaluation of the relocated households’ livelihoods to ensure that the project did not lead to adverse impacts.
This project’s GAP did not include any quantitative targets; nor was it reflected in the DMF. As such, there is no established framework for drawing a direct correlation between the gender actions that were completed and the overall project outcome and effectiveness. This shortcoming may be linked to the late formulation of the GAP, i.e., it was developed and approved only as part of the supplementary loan. A stronger gender analysis leading to the formulation of GAP with clear targets should have been undertaken as part of project preparation. GAP targets should have been integrated into the DMF to strengthen the implementation, monitoring, and reporting of gender mainstreaming activities by the executing agency and ADB.
Some key stakeholders were hesitant or did not participate in this project due to a variety of reasons. For example, the Long An Center for Management and Exploitation of Irrigation Works did not agree to operate and maintain the salinity monitoring station established by the project in the Long An province, asserting it did not have the mandate to do so. Similarly, many farmers were unwilling to construct on-farm canals because they were not convinced crop diversification and participatory irrigation management (PIM) would generate attractive returns in the project’s new irrigation areas. Issues in stakeholder engagement such as these, as well as the unsuitability of the designated agency to coordinate the project’s on-farm and social development and PIM activities, should have been identified and addressed through consultations during the design stage.
The time lost in mobilizing the loan implementation consultant to review the detailed engineering design caused further delays in obtaining time-consuming government approvals for the civil works and associated costs. Likewise, engagement of a technical expert to prepare an accurate inventory of losses would have improved the land acquisition and resettlement (LAR) cost estimation at project preparation and expedited the LAR process in time for project implementation.
Any project that entails a significant amount of land acquisition is likely to face a variety of implementation problems. This project is no exception. It encountered various problems, including a complaint registered with ADB’s Accountability Mechanism on 26 September 2012, which was resolved. The most serious of these problems was the termination of three contract packages, which were the biggest of the project’s nine contracts with a combined coverage of more than half of all the project roads. Although the primary cause for termination was the extremely slow progress of works, delays in the handover of encumbrance-free land was a compounding reason. Had the size of the contract packages been smaller, the impact of contract termination would not have been significant.
The PMU established satisfactory financial management systems with internal financial and accounting controls that met ADB’s requirements. It recorded all transactions andbalances, and prepared regular and reliable financial statements and financial monitoring reports. All audited project financial statements (APFS) for the fiscal years 2008–2017 were compliant and submitted to ADB for review. The APFS review checklist was submitted in January 2019. ADB accepted the audit statements with no objection replies. Provision by ADB of audit opinions on all financial statements and the use of loan and grant proceeds should in the future be sought to enable a reliable assessment of the project’s financial management performance. Automation of APFS and/or launch of financial management project performance rating and eOperations upgrades are all very timely and useful to achieve this goal.
This project was administered by the Environment, Natural Resources and Agriculture Division of ADB's Central and West Asia Department in a joint venture approach until May 2009, when the administration lead was transferred to the Afghanistan Resident Mission. Project administration under the resident mission was effective, and resulted in closer ADB interaction with the MOF, Ministry of Environment and Water (MEW), and the project cofinancier, the Canadian International Development Agency. It is recommended for future similar projects in the country.
The first 4 of the eight contracts awarded under this project for canal civil works comprised design-and-build contracts, which proved difficult because the national contractors lacked technical skills and experience. This slowed implementation progress, in response to which, consulting inputs for design and supervision had to be increased and detailed designs had to be prepared for subsequent tenders. The consultants also provided mentoring support to the contractors’engineers. The changes helped solve the implementation delays and supervision issues. The use of design-and-build contracts for complex water resource projects with hydraulic structures needs to be carefully weighed, especially when relying on national contractors.
A tax treatment issue affected project procurement. Although the government was supposed to finance all taxes, inconsistencies emerged in the drafting and wording of contracts, and between ADB and the Ministry of Finance's (MOF) legal advisors on how the tax was to be treated, both for this project and other ADB projects at the time. One package of equipment (vehicles) was delayed and not executed because of issues over duties (in Pakistan), and the government met the total costs involved. The reimbursement to ADB of payment under this contract was one factor in the delayed liquidation of advance accounts and project financial closure.
This project became effective days ahead of the schedule stipulated in the loan and grant agreement. Despite this, completion had to be extended for 21 months as essentially only minimal activities were initiated in the first 2 years due to delays in consultant recruitment and tendering and awarding of civil works contracts. The implementation of proactive approaches such as advance actions on consultant recruitment and procurement, immediately upon approval, would have helped reduce the delays. In 2008, with the project implementation consultants on board and the project management unit (PMU) staffed, implementation started in earnest. In 2010, the civil works contracts were awarded, although some required retendering because of a lack of qualified bidders.
The enhanced project delivery approach, agreed by the Afghanistan government and ADB in 2016, outlines key measures to prevent security challenges from hindering efficient project planning and execution in the country. Such measures include mandatory pre-bid site-visits to allow contractors to assess security costs, when sites include insecure areas; recruitment of a risk management firm to help with planning security measures as well as with auditing the security situation at the sites; widening the pool of qualified local contractors to help deal with security issues, including incorporating in the bidding documents, on a case-by-case basis, mandatory joint venture arrangements with national civil works contractors for upcoming contracts in insecure locations; and including in the bid documents and terms of reference the requirement for all contractors and consultants to depute professional security advisors for contracts covering areas where there are serious security problems. Signifying ADB’s commitment to continue to support the development of Afghanistan despite the high risks, the approach should be adopted by all future water sector projects in the country.
The implementation arrangement for this project was challenging, with a single executing agency, the Local Government Engineering Department (LGED), coordinating several implementing agencies under multiple departments and city corporations. Although a dedicated project management and coordination unit (PMCU) was established within the LGED as envisaged, the 29 project implementation units (PIUs) it had to coordinate was a bit too much. These 29 PIUs were spread across the key implementing agencies of the project —4 in city corporations, 12 in pourashavas (municipalities), 6 in LGED offices, 6 in the Department of Public Health Engineering (DPHE) offices, and 1 in RAJUK (Rajdhani Unnayan Kartripakkha, Bangladesh’s capital development authority). Such complex implementation arrangements should be avoided.
Following the change in scope, the targets in the DMF were revised with specific indicators to better capture the achievement of outputs and outcomes. But the DMF was not thoughtfully streamlined and nine indicators at the outcome level were excessive, some of which were not entirely attributable to the project. These weaknesses hampered the effectiveness of the DMF in facilitating better project performance.
Use of the sector lending modality allowed this project to identify only a core of sample subprojects at appraisal. Future subprojects were determined using a set of selection criteria, a feasibility study for each was conducted based on the sample subprojects. However, due to higher demand for roads and drainage and lower demand for energy efficiency and household sanitation, corresponding adjustments in the number of subprojects had to be made during implementation. Although minor, this change in scope necessitated a reallocation of funds, with the project incurring a cost overrun of 41% in civil works because of the inclusion of urban transport and drainage in all selected project implementation units. A 19-month delay in contract awarding for a solid waste management subproject because of a shift in location also triggered a 12-month extension in project completion. The change in scope, reallocation, and loan extension could have been avoided had robust technical due diligence and thorough feasibility studies been made for each of the subprojects.
The agglomeration of large metropolitan cities, secondary towns, and peri-urban areas into city regions has been effectively managed and implemented under this project. Many municipalities covered have achieved remarkable improvements in infrastructure and municipal governance. This would not have been possible without adequate capacity development and close performance monitoring of municipalities. Coupled with community awareness, institutional capacity building was crucial in effectively engaging municipalities in the design and implementation of coherent regional development plans in the two project city regions of Dhaka and Khulna.
Some of this project’s target beneficiaries could not form water management cooperative associations (WMCAs). This caused their subprojects to be left out even if these were technically feasible. Formation of WMCAs was a precondition for approval of subprojects. An alternative modality for special circumstances could have been considered.
While the advance account was useful, there was a case of ineligible expenditures that had to be refunded. A delay in refunding the unliquidated advance also delayed the accounts closing. This could have been averted had the liquidation been made ahead of project closing. More attention to EA financial management is essential to the smooth and timely closing of project accounts.
Implementation of all turnkey projects under this and other tranches of the first MFF was slowed by having a new type test on each major equipment. This caused NTDC to adopt a type test policy for major equipment to improve contract execution efficiency without compromising quality. It incorporated the type tests required by the policy in its bid documents under the second MFF’s two tranches, and this is expected to further enhance turnkey contracting efficiency.
Given (i) the significant challenges for rapidly increasing transmission capacity to match added generation capacity, (ii) NTDC’s limited capacity to administer many contracts, and (iii) inefficiencies caused by differing entities holding the project design and project management mandate, NTDC used large EPC contracts in the project. This improved implementation efficiency. The total contract implementation period for tranches 1–3 of the first MFF was 7 years. Through such EPC contracts, NTDC built capacity and further mainstreamed EPC contracts in ADB’s Second Power Transmission Enhancement Investment Program.
Building on the experience under this and other tranches of the first Power Transmission Enhancement Investment Program, ADB engaged a facility management consulting firm to strengthen the National Transmission and Despatch Company’s (NTDC) procurement and design capacity under the second multitranche financing facility (MFF). In addition, it supported an individual consultant to provide hands-on training on the single-stage, two-envelope bidding procedure and co-organized with NTDC staff trainings on bid document preparation and technical and financial bid evaluation. These measures improved procurement efficiency, reducing the interval between loan signing and the first major contract award from 36 months for this tranche to 18 months for tranche 1 of the second MFF and to 9 months for tranche 2 of the second MFF.