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LESSONS:

Bangladesh: Third Natural Gas Development Project [Loan 1293-BAN(SF)]

sector: Energy | country: Bangladesh

1. The terms of reference of project preparatory technical assistance consultants needs to include obtaining project equipment prices in the open market and subsequent cross checking of prices with more than one supplier. Cost underruns were experienced for parts A (Bangladesh Gas Fields Company Limited) and D (Jalalabad Gas Transmission and Distribution Systems) of the project partly because equipment cost estimates were based on tied loan prices. [Main text, paras. 14,17,81]

2. The delays in procurement of materials under the project necessitated the resident mission to perform more rigorous and detailed follow-up of executing agency (EA) procurement action. Monthly estimate sheets were provided by the EAs to ADB to show progress and pinpoint where delays were taking place. This should become a fixture in future loans to the Bangladesh gas sector, and should be incorporated in project administration memorandums. [Main text, para. 82]

3. Whenever possible, selection of implementation consultants needs to be undertaken prior to project approval to avoid substantial delays in project implementation. All too often, ADB approves advance selection of consultants but executing agencies do not take advantage of this opportunity. Future loans to the gas sector of Bangladesh requires ADB missions to strongly encourage executing agencies to select consultants in time for project implementation and to take advantage of ADB s permission for advance recruitment of consultants. [Main text, para. 18,38,57,83]

4. It is more practical to hire a consulting firm rather than individual consultants as this gives the project greater flexibility in changing consultants as and when needed. The project engaged individual consultants through firms. The prolonged implementation period required changing of individual consultants, and the firms were able to provide suitable replacements when required. [Main text, paras. 38-40,84]

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