Effective champions are critical for the success of any new initiative. This is even more true for innovative projects, where strong commitment to the project on the part of both the government and ADB are critical to success. The failure to locate the DEMP within a government agency with strong ownership of the project was one of the factors that led ultimately to its failure. The sustainability of initiatives beyond the lifetime of the project rests heavily on the commitment and support provided by the relevant ministry, in the form of formal institutionalization of systems and processes, further training, and regular follow up by relevant staff. Similarly, the failure of ADB to adequately invest time and resources in project implementation, and the failure to remain involved in ensuring network sustainability in the years after the project ended, when its fate remained in limbo, also contributed to the project’s limited success.
The DEMP failed to expand tertiary education opportunities and increase the employability of graduates to the extent intended. The question of how to achieve both of these objectives remains. A central issue in this regard is how to improve external degrees. One of the lessons of the DEMP is that Sri Lankan students may not yet be ready for fully online courses, at least for the longer degree courses. To raise the quality and range of offerings to external students, a blended learning approach would be most appropriate, combining online learning with a limited amount of face-to-face tutoring. This would allow the introduction of science and engineering as external degrees, currently not offered. Some universities have established their own open and distance learning centers, and these could be considered for future ADB assistance, along with support for further capacity expansion at the OUSL.
Apart from its innovative nature, the DEMP was also very broad, with the project inputs spread very thinly. The project included the construction of a national broadband network; mobilization of non-traditional partners including private institutions; capacity building and institution strengthening within the OUSL; development of online courses, which is notoriously difficult and slow; and implementation of these courses with the expectation of rapid, high enrolments. The DEMP may have had more chance of success if it had focused only on the OUSL, or only on NODES, with the strengthening of the OUSL as a separate project.
For innovative projects, significant resources are needed up front. This can include resources for assessing the feasibility of, and demand for, the project objectives and approaches for achieving them, as well as to lay the groundwork for ensuring their acceptability among different interest groups. Resistance to the innovations proposed cannot be overcome at the same time as project implementation is proceeding. The same applies to demand for the project outputs and outcomes. It is critical that a reasonable amount of consensus and commitment toward the project objectives is established before implementation begins.
Considerable time, effort, and emphasis must be placed on the development and monitoring of the risk matrix for innovative projects. This applies particularly to risk identification and potential risk mitigation strategies. A range of alternative strategies should be developed in detail for every identified risk. The risk matrix and mitigation strategies for innovative projects should be discussed extensively by ADB and the government to ensure a common understanding and commitment. The risk matrix should be a major focus of ADB-government discussions in project review missions during implementation, and should be updated at least annually through a formal process such as a memorandum of understanding. DEMP implementation would have benefited significantly from a sharper focus on emerging risks, development of appropriate strategies to address these risks as they emerged, and a strong joint commitment to implementation of these strategies.
By definition, the knowledge, skills, and experience needed to guide and embed innovative change are likely to be scarce in both the borrowing countries and in ADB. It is evident that additional time and resources are required to support implementation, which did not happen in the case of the DEMP. This should include longer, more intensive, and more frequent review missions, and supplementation of missing technical skill areas by bringing in additional staff from across ADB or engaging external support for review missions in particular. Technical assistance to strengthen the expertise available under the loan and ensure ongoing support to implementation may also be necessary. If the sector department is not committed to providing additional resources and support to innovative projects, then these projects should not proceed.
system is being created, as it was under the DEMP, it is critical that a commitment for sustained investment is made. Neither the government nor ADB had any interest in a follow-on project. Even a 1-year extension to allow enrolments to continue their upward trend at the end of the project was viewed unfavorably. Innovation and reform require more long-term commitment to be successful.
Accompanying TA would help clients meet key program targets, such as implementation of the IGF and medium-term budgeting. Policy-based loan design should ensure that TA findings are translated into actions. With the MFEM’s preference for policy-based lending, loan design should ensure strong links between TA and the program being supported. Given (i) the limited implementation capacity of the government, (ii) the approval of a policy-based loan supporting Cook Islands’ Disaster Resilience Program, and (iii) the MFEM’s preference for policy-based lending, further capacity support is needed.
As noted above, donors provide a significant amount of resources, including for capacity building. Various modalities of donor participation and coordination could be explored in the design of policy-based loans, such as inclusion of donor commitment and funding of specific programs and projects (especially in the social sectors, where donors are active) and TA (notably in PFM).
Many of the milestones for institutional reform are process related, e.g., cabinet endorsement of the IGF. The outcomes from the institutional reforms are not well-defined, e.g., higher economic and social rates of return. There is a need for closer monitoring and evaluation to determine whether the reforms achieved their objectives. The theory of change and intended results should be well articulated at the outset. Policy actions should be linked to development outcomes that are clearly defined, with measurable indicators and baseline data for future evaluation.
The BOT annuity concessionaire for the Orai-Baran section, with higher traffic than expected, represents a successful case. However, in many cases BOT schemes in India are not successful. BOT concessionaires need to take large risks as (i) lack of achievement of expected traffic volumes owing to external factors such as the unexpected opening of competitive roads and construction delay in adjacent sections, and (ii) delays in land acquisition. There is also a risk that competitive tendering may excessively lower bidding prices to such a degree that the contractor cannot perform satisfactory service sustainably. Although the BOT annuity scheme is considered to have less risk than the BOT toll scheme, the existence of growing numbers of unsuccessful BOT projects in India has made financiers more prudent in financing BOT projects. Given this situation, the NHAI has introduced an engineering procurement and construction scheme to reduce contractors’ risks by increasing bidders’ participation in road projects. Under the engineering procurement and construction, contractors carry out the detailed engineering design of the project, procure all the equipment and materials, and construct roads. It is like a turnkey project, and the NHAI makes milestone payments. The government is continuously reviewing and updating the policy, legislative, and administrative framework for PSP on the basis of experiences and lessons learned. The IEM noted that various PPP schemes have pros and cons and that the selection of PPP schemes is largely affected by the potential profitability of road sections.
In the project, two sections (0.5% of the project roads) are not yet completed owing to difficulty in acquiring the land. The NHAI recently adopted a policy that construction procurements will be started only when more than 80% of land acquisition is completed. However, even if this policy had been adopted in the project, the project still might not have resolved the issues it faced. Land acquisition is a difficult issue in India, and lack of careful consultation with landowners can lead to delays in the acquisition of land for roads. Moreover, the inclusion of religious sites in land acquisition plans entails both more time and thorough planning and consultation, as resolving the issue requires a more conservative approach.
The east–west national highway corridor was improved significantly between Chittorgarh and Kanpur, and travel time was reduced. For example, the travel time from Shivpuri to Jhansi (100 km) decreased by 1 hour. However, trucks carrying goods must spend 1.5 hours at state border checkpoints to get tax and customs clearances to cross. The World Bank’s Logistic Performance Index, which ranks 160 countries every 2 years, ranked India 25th in 2016, up from 54th in 2014. Logistics performance in India is improving, but for the timeliness component of the index India was ranked 42nd in 2016. Although hard infrastructure for logistics has been improving, soft logistic infrastructure still lags. In the same way, long-distance bus services across state borders have not been well developed. Requirements for getting operating permits in each state are a constraint on expanding the long-distance bus service network. To use the road corridor infrastructure more effectively, measures such as harmonization across states of both regulations and taxes and charges and swift clearance at border checkpoints need to be introduced. The government planned to introduce a nationwide goods and service tax in July 2017 by combining federal- and state-level taxes. The introduction of the new tax will significantly reduce the time spent at state border checkpoints.
The Kota bypass, which is in the middle of the Chittorgarh–Kota and the Kota–Baran sections, was not completed owing to the collapse of the bridge under construction at the time of IEM fielding. Although the bypass is not within the scope of the project, the delay of its completion affected the traffic on adjacent sections of the project. In corridor development, if sections outside the scope of ADB projects are not completed as planned, it will affect the adjacent sections within the scope of ADB projects. Such risk needs to be carefully considered at the planning stage, and the progress of adjacent sections in the same corridor requires follow-up even if they are outside the project scope.
The role and magnitude of the public sector in a small, island economy and sporadic wage increases for civil servants put pressure on recurrent expenditure. These make it difficult to manage fiscal expenditure over time. A small economic base limits areas for alternative employment opportunities. This could imply that the share of the public sector in the economy would remain large in the longer term. Thus, there is a case for considering the size of the public sector in any future reform program.
A program of short timeframe should adequately reflect the time lags that usually occur in implementing policy actions. It would be difficult for a short-duration program, even with up-front delivery of vital reforms, to achieve indicators involving external debt-togross domestic product, revenue mobilization, sustainable fiscal outturn, and improvements in Public Expenditure and Financial Accountability ratings due to time lags of these actions. The magnitude of the effects of these policy measures could be difficult to determine. As such, performance indicators would have to be realistically formulated when designing reform programs, taking into consideration the focus, timing and extent of the reform measures to be adopted.
The 34 policy actions for a crisis response operation stretched out the government’s capacity in absorbing a substantial reform agenda. Constraints to capacity were reflected in the delays in complying with the policy actions, in particular with the policy action on financial ratios, which resulted in waiver of this action. Institutional capacity to manage the reform process and to implement agreed-upon reforms should be factored into the program design and continue to be reassessed during program implementation. The need to continuously strengthen the technical and managerial capacity of institutions, in terms of translating policy actions into workable, concrete measures and assessing reform options, should be carefully considered in designing reform programs.
A steady, step-by-step pace of reforms may be more suitable in the Tongan context, given prevailing capacity constraints. The process of implementing reforms takes time, especially for reforms that require specialized skills, such as those in PFM and those that are structural in nature; these types of reforms take time to implement and cannot be completed by a single quick-disbursing stand-alone program. The program’s sequence of policy actions in the reform areas of PFM, PSEs, and business environment could have prioritized the binding constraints, such as the legal and regulatory issues, before getting into the operational aspects of the reform issues. However, this was not the case for the policy actions on social protection, which targeted vulnerable groups without an established system for identification, delivery, and monitoring. Also, ADB’s coverage of areas for policy reforms under the program could have focused on key needs and constraints. A gradual approach that considers more realistic timelines and proper sequencing could allow more flexibility in prioritizing and refining key policy actions in successive stages of the reform process. This could help strengthen the enabling environment for reforms, foster learning, and build capacity for policymaking and implementation.
The government should take effective financing measures for O&M and repairs to support IMCs and the cooperatives, especially through the provincial people’s committees. Mechanisms to ensure that IMCs and WUGs receive funds at the right time for repairs are needed. At a minimum, WUGs and cooperatives must work closely with the IMCs to ensure timely and effective O&M. The newly established Disaster Management Authority within MARD should play a role in this.
Close monitoring of the condition of the infrastructure is needed and cost recovery measures should be instituted for O&M of: (i) tertiary systems managed by cooperatives, and (ii) primary and secondary systems managed by IMCs and IMEs. The findings of the monitoring exercises should be regularly shared with the central and provincial governments to help MARD and the DARDs prepare budgets and mobilize resources.
Although their autonomy was short-lived, WUGs functioned well using hydraulic boundaries. Project WUGs had their own bank accounts and stamp and the right to sign contracts. They received training in irrigation planning and management and financial management. Empowered water users became fully committed to the infrastructure that was crucial to their agriculture livelihood. It was acknowledged by the IMCs, the cooperatives, and even by DARDs that some WUGs constructed tertiary irrigation canals more quickly and/or at lower cost than PPMUs. Since cooperatives have absorbed the role of WUGs, they should capitalize on the WUGs’ enhanced capacity to boost PIM. Maximizing the use of the irrigation management knowledge embedded in the WUGs and cooperatives would improve tertiary system management. If cooperatives work closely with the IMCs and IMEs, this would also help define O&M needs and systems.
The project introduced a project performance monitoring system that made use of GIS and was supposed to be applied by the PPMUs. However, since benefits started to materialize only upon completion of the project, the government was more interested in construction monitoring. After the project, no funds were available for the continued use of the project performance monitoring system and it has been abandoned. During the project, the ADB resident mission and MARD’s central project office introduced a detailed project implementation planning system, which made a substantial contribution to limiting the delay in project completion to 7 months, avoiding the need for a formal extension of the project. This practical tool should be used in other projects whenever feasible.
The operation and maintenance of agricultural infrastructure built through projects needs to be sustainable. Routine O&M costs have been reduced by the project’s concrete lining of the canals. In addition, the choice of this technology reduces water losses from canals and thus enhances irrigation efficiency and the reliability of water delivery. Where flooding is a predictable annual event, as in the Quang Binh subproject, concreting the top of the dykes and covering it with gravel may prevent damage. Concrete lining should be promoted, given that older parts of the existing irrigation infrastructure would have deteriorated without the lining done under the project. Piloting other technologies, such as buried pipe irrigation and closed concrete canals, should be explored as such systems are cost-effective in terms of O&M and more resilient to extreme weather events, leading to lower maintenance cost in the long term. The extraordinary damage caused by typhoons and consequent flooding requires further research with different technologies, especially given the emerging risks of climate change.
A project such as this one can be successful in easing the constraints to local currency cash loans, loan terms, and the capacity of participating commercial banks for MSE lending. However, it cannot address other constraints identified at appraisal such as restrictions on dollar-denominated cash loans, and those encountered during implementation, such as restrictions on microcredit organizations and cash balances of banks. Incremental measures aimed at easing constraints and eventually dismantling credit market distortions need to be included in the project design.