WB unhappy in delay implementation of ongoing dev projects
Zahid Hossain Biplob: The implementation of at least half a dozen of foreign-aided projects involving more than Tk 60 billion has become uncertain due to reluctant moves of some ministries concern. Nine months already been completed of the current fiscal year but no contract is signed with donors. So it is impossible to implement the project within 3 months time. The World Bank (WB) has underscored the need for undertaking necessary actions to implement the ongoing project within the time frame to facilitate growth of Bangladesh. The WB Country Director for Bangladesh and Bhutan recommended the government for quick implementation of the development projects under the finance of the lending agencies which would help boosting the economy of Bangladesh. Talking to Daily Industry, WB country director said the World Bank is Bangladesh’s largest development partner since the country’s independence. The World Bank has committed over $30 billion in grants and interest-free credits to the country, he said adding currently, Bangladesh has the largest IDA program which provides concessional financing amounting to $12.6 billion.
“When this finance will spend on a timely manner for the intended purpose, the Bangladeshi people, including the poor and vulnerable will be benefited”, he said.
In this regard, last month, the World Bank, ERD and implementing agencies, jointly hold a portfolio review meeting to agree on critical actions to enhance implementation status, he informed. “This is a regular and periodic exercise, which proved to be helpful in speeding up implementation.
This is how the World Bank works in all countries to ensure funds are able to be spent for the highest priorities”, he said.
Sources said, WB finance the ongoing 11 projects involving US$ 2.0 billion grant are implementing at a slower phase.
Among the poorly-performing projects are: $100 million college education development programme, $176.71 million national agriculture technology programme (NATP)-II, $210 million Bangladesh modern food storage project, $150 million Bangladesh regional connectivity projects, and $360 million Bangladesh regional water transport project.
Besides, the $60 million VAT improvement programme, $245 million Bangladesh safety-net programme for the poorest, $50 million low income community housing project, $300 million income support programme for the poorest, and $65 million Bangladesh insurance sector development project are performing below the optimal level.
The World Bank (WB) has warned that it will reconsider financing projects worth US$ 2.0 billion unless the authority expedites implementation of the projects. The global lender may even withdraw funds if the agencies fail to speed up the execution process of the WB-aided projects. The Bank issued the warning while reviewing 11 problem projects at a meeting at its Dhaka office last month; it is providing lion share of the costs for those undertakings.
In this regard, the Bank sat with the project executing agencies and the Economic Relations Division (ERD) to review its portfolio to get the updates on the projects recently.
“Since the performance of eleven development projects is not satisfactory in terms of fund utilisation and physical progress, the World Bank reviewed those seriously,” a senior ERD official said.
The purpose of the meeting was, however, to remove the obstacles that stood in the way of execution.
The Bank picked up 11 of its aided projects for stocktaking as those were struggling.
The lender had made the commitment of providing nearly US$2.02 billion worth of concessional loans for the projects on various occasions to improve Bangladesh’s different sectors, including infrastructure, education, finance, water supply and sanitation.
It also expressed its dissatisfaction over start-up delays and slow progress in the procurement process concerning some projects, another ERD official said.
The global lender suggested speeding up the implementation or it would be forced to review its assistance for the weak progress, he said.
He said the Bank also suggested removing procedural bottlenecks that hindrance implementation.
The WB helps Bangladesh develop its infrastructure and cut poverty, including increasing school enrolment, improving health status, expanding renewable energy access, providing rural roads and water supply.
During fiscal year 2017-2018, the Bank channeled nearly $800 million in loans for slower implementation of development projects.
However sources said, the implementation of at least half a dozen of foreign-aided projects involving more than Tk 6,000 crore has become uncertain.
ERD found many foreign-funded projects of several ministries especially railways and power — could not spend their allocated funds mainly because of loan agreements were not signed with the development partners.
The other reasons behind the non-utilisation of foreign aid include disputes over bidding, and delay in appointing project consultants and in removing high-voltage power lines in project areas, said an ERD report.
The ERD told the ministries and divisions concerned that if a loan agreement is not signed in any project in a specific fiscal year, no foreign aid will be allocated for the project in that year.
In November last, the ERD reviewed progress in the implementation of 63 ongoing foreign-funded projects and each having aid allocation of Tk 200 crore or more. They involve a total of Tk 45,442 crore.
It found that progress in the implementation of 28 of the projects was unsatisfactory.
Besides, utilisation of foreign funds for several other projects has become uncertain as the ministries concerned have not yet signed loan agreements with the development partners.
The government has set an ambitious target of utilising foreign aid of Tk 57,000 crore or $7.12 billion this fiscal year.
Though the government is yet to cross the $4 billion mark in terms of utilisation of foreign aid in a fiscal year, it now believes that its efficiency in utilising foreign aid has increased sufficiently over the last several years.
In the last fiscal year, the highest utilisation of foreign funds was $3.56 billion.
A finance ministry official said that in this fiscal year, the government utilised foreign funds much better than the previous year. But it would still not be possible for the government to reach the target.