Half of the Asian Development Bank (ADB) funded projects – worth $3.4 billion – have either become problematic or put on watch list due to implementation delays, reveals a latest portfolio review that has again highlighted governance issues in Pakistan.
Most of the troubled projects are in the areas of energy generation, transmission and distribution, which are the so-called priority sectors of the PML-N government during the past four years.
As of end June 2017, the ADB-funded active public sector portfolio in Pakistan is made up of 37 projects with a total cost of $6.7 billion. Of the 37 investment projects, 32 valued at $5.83 billion are ongoing. About 18 of them worth $3.6 billion are facing problems.
The ADB has declared six projects worth $560 million ‘actual problems’ and eight schemes costing $1.2 billion ‘potential problems’. There are four projects, which are on the watch list, having total cost of $1.7 billion and there are a total of seven projects on the watch list but three are already declared problematic.
Excluding the watch list projects, the ADB rated 60% or 21 projects on track. This ratio was 80% in December last year and the latest review indicates that the project implementation is getting from bad to worse.
The ADB underlined that the downward trend in the performance rating of the projects is due to the lag time in meeting contract award and disbursement targets for the first half [January-June] of 2017. From six months to one year is wasted in between project approval by the ADB and its effectiveness, largely because of bureaucratic inefficiencies.
The ADB monitors implementation performance of projects using projections of contract awards and disbursements and the status of implementation on them.