Incorporating utility shifting as part of the item-rate contract proved to be effective in the timely delivery of projects in some states of India. In road construction projects, the task of utility shifting is usually contracted out to a third-party entity specialized in utility shifting. However, contractors often utilize or abuse this arrangement as an excuse to delay civil works. To prevent such an occurrence, it may be necessary for utility shifting to be included in the bill of quantity items to be carried out by the contractor.
Some of this project’s initial delays can also be attributed to the need to revise the DPRs because of discrepancies or deficiencies in design, specifications, and quantities. For example, mismatches in the number of culverts and bridges relative to site conditions were found during project implementation. Additional requirements, including four lanes in urban or habituated sections, were included late in the project, requiring the issuance of variations. Further, because a wildlife sanctuary clearance was not obtained, one road was dropped from the project. In future, EAs should ensure that DPRs are more meticulously prepared to accord with the site requirements. Also importantly, that the required environmental clearances are obtained during DPR preparation.
Following the request made by the state public works department through the national government of India, this project was prepared for approval well ahead of the schedule proposed in the country operations business plan. The construction supervision consultants were recruited under ADB’s advance action facility, about 10 months before the start of loan negotiations. However, grounding the project took longer than anticipated. The benefits of advance contracting could not be realized because the EA was short of staff to undertake procurement-related tasks, and contract awards started only in quarter 1 of 2015, or three years after loan approval. This undermined the advance action’s intention to facilitate timely startup and completion. Especially for sector loan projects with multiple subprojects and contracts, such as this one, it is important that EAs/IAs have an adequate number of skilled procurement staff to ensure project readiness at loan approval and maximize the benefits of advance action.
Eight civil works packages under national competitive bidding were procured successfully using Viet Nam's e-procurement system. All the e-procured packages achieved high efficiency with an average of 50 days end-to-end procurement time. However, there were only one or two bids per package. This may be because of the new procurement procedure but may also reflect small contract values (less than $1 million per contract).
All the works contracts under this project were supervised by consulting engineers appointed to ensure that detailed engineering designs were followed, and contractors’ claims were legitimate. However, the supervision of some subprojects was insufficient to ensure timely completion and handover of fully operational, quality works. Of note were (i) a nonfunctioning pressurized piped irrigation system in Cu M’Gar, Dak Lak; and (ii) a poorly constructed irrigation system in Ea Soup, Dak Lak.
During the completion review field visits, it was observed that irrigation facilities are better maintained than low-volume rural roads. This is because budget allocations to irrigation management companies provide for a minimum level of service and people are engaged on a part-time basis to maintain canals and keep gates in operating condition. In the case of low volume rural roads, not only are commune funds more limited than provincial sources, the institutional structure to maintain alignments is also inadequate. As a result, commune people’s committees often engage voluntary groups (youth or women’s associations) to carry out basic maintenance and vegetation control at a scale that requires mechanical intervention. Without a formal organization and institutional arrangement to do the job, the maintenance of rural roads is often left undone or done too late.
With the tremendous pressure on Viet Nam’s provincial administrations to achieve economic development, investments have tended to prioritize the expansion of PRI with designs that are often based on outdated standards and cost norms. Irrigation and road designs thus typically result in lower capacity with structural weaknesses, consequently requiring repair and/or upgrade shortly after commissioning. For example, significant periodic maintenance was required for the subprojects in Buon Tria–Buon Triet communes of Lak district within just 2 years after commissioning. However, due to the limited revenue generation capacity of provincial governments, it is not always possible to meet the operation and maintenance (O&M) costs of the project assets. Given this, it is of great importance that PRI design standards adequately address current risk factors, particularly under expected climate change scenarios and the changing land-use patterns.
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.
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.
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.
Although the physical scope of the water supply subproject was reduced, its outcome target was overachieved because it increased the beneficiaries to 533,000 people against a target of 380,000 people. This was a major contribution to the MFF target of 2.4 million beneficiaries. Water supply quantity also increased from 80 liters per capita per day (lcpd) to 135 lpcd, meeting the government of India’s national target. These accomplishments demonstrate how being outcome-oriented could lead to better results. Nevertheless, the project could have considered incorporating comprehensive end-to-end solutions, such as 24×7 water supply with well-defined O&M arrangements in 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 assessment of state capacity at appraisal was rather optimistic, encouraging ambitious reform targets and delaying the start of some subprojects under the capacity building and institutional development component. Partially achieved outputs, including among others the introduction of a computerized system for water billing and collection, updating of municipal database, and introduction of a management information system, were consequently deferred for completion under succeeding tranches.
This project’s completion was delayed by about 61 months. Major reasons were procurement delays due to limited contractor interest and state capacity, on-and-off public unrest, and the historic 100-year flooding in 2014. Prolonged consultant recruitment (15 months for the initial PMC and DSC), significantly holding up detailed designs and project startup, replacement and rebidding of poorly performing consulting and works contracts, and slow-moving works contracts also underpinned the completion delay. In future, a realistic timeframe for all activities within project control should be ensured during preparation.
ERA has been headed by senior officers of the state government and this benefited decision making and interdepartmental coordination. It also enjoyed strong state government support, including timely counterpart funding, not least to complete sewerage works after loan closure. Having ADB-financed projects managed by senior government officials needs to be worked out to the extent possible. (
Consultant performance under this project was less than satisfactory. The original PMC and one of the DSCs were weak and had difficulty fielding and maintaining experienced staff in the planned positions. Absence was frequent and several senior engineers were replaced, resulting in delayed output delivery. Upon contract completion for the original PMC and one of the DSCs, new consultants were hired and performed substantially better. However, implementation delays continued due to various factors such as site constraints, design changes, and consequent delay in finalizing and issuing technical and as-built drawings. Because of the need for replacements, a total of four consultants were engaged by the project.