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LESSONS:

Sri Lanka: Plantation Development Project

sector: Agriculture, Natural Resources, and Rural Development | country: Sri Lanka

The Importance of the Socioeconomic, Institutional, and Policy Environment to Project Design. The failure of the project to achieve its intended impact, and limited achievement of expected outcomes shows that ADB needs to fully assess and understand all socioeconomic, institutional, and policy factors when it prepares and appraises projects. If these factors had been properly assessed in the case of the Plantation Development Project, ADB could have lowered the outcome expectations. It could have adapted the design to match the capacity of the implementing agencies and stakeholders. With a full understanding of the difficult policy environment and entrenched obstacles, ADB could have imposed stricter policy requirements on the government and actually enforced these (and other loan covenants) as prior conditions for disbursements of the loans. One such policy requirement could have encouraged more investment in the regional plantation companies (RPCs) by lengthening the lease period for the government-owned regional plantation company estates’ lands. If these steps had been taken, the project might have been more successful.

Need to Understand the Limitation of Project Modalities. The complexity of the project’s design was a weakness. As a general principle, projects should aim for simple, straightforward outputs and outcomes and involve uncomplicated implementation arrangements and a small number of implementing agencies if they hope to be successful. Projects must be designed in a way that makes it feasible for national staff (generally government officers) who often have limited resources and capabilities to manage and implement them. They must also be workable within the established national practices and procedures. The Plantation Development Project (PDP) confirmed that preparing a project that has dozens of diverse activities to be implemented by a variety of agencies and seeks to set up new agencies with little stakeholder support, can lead to limited project success.

The Need for Adequate Staff Input and Maintenance of Project Records. The project’s midterm review was undertaken 2 years late and almost at the end of the project period at appraisal. This absence of timely oversight and ADB’s poor curating of the project data and documents contributed to the project’s limited success. ADB’s business processes could be improved to retain key project financial and economic analyses records systematically in electronic format.

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