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LESSONS:

Madhya Pradesh Power Sector Investment Program (Tranche 4): Project Completion Report

sector: Energy | country: India

Lessons for future ADB projects include the need for capable and committed implementing agencies. The distribution companies (DISCOMs) demonstrated that (i) willingness to adopt ADB’s requirements for international competitive bidding (ICB) procurement led to more rapid and transparent bidding processes, which led to lower bids and costs; (ii) open communication and willingness to deal with stakeholders – particularly contractors – are helpful in resolving complex technological issues, leading to better resolution of problems in a timely and cost-efficient manner; (iii) a properly administered procurement process lead to better bids with lower prices and better quality of equipment and workmanship of contractors; (iv) the ability to adjust the project scope to reflect actual field conditions and to apply technical optimization will improve project implementation, lower costs, and result in better outcomes; and (v) assignment of experienced and sufficiently ranked technical managers to run the project management units (PMUs), with autonomy to plan, design, and implement the project, will lead to better project implementation. ADB’s various clinics regarding environmental and social safeguards, procurement, quality control, monitoring, and reporting are essential for supporting implementing agencies that are new to ADB-financed projects. For future projects of a similar nature, ADB should consider requiring the implementing agencies to recruit the services of a consultant familiar with ADB procedures to assist with preparation of appraisal scope and cost estimates and the Periodic Financing Requests (PFRs) to avoid major changes in scope and the over-estimation of the cost of both ICB contracts and equity contribution, as occurred for this project. Succeeding tranches of a Multitranche Financing Facility (MFF) program should ideally be timed to incorporate works included or completed under preceding tranches.

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