Published at: The Financial Express, March 02, 2019
Japan is considering tagging a new condition to its signing of loan deals under ODA with Bangladesh because of poor utilisation of its assistance.
The Japan International Cooperation Agency (JICA) is likely to tag the DPP/TPP approval of projects concerned prior to signing loan deals on those.
Presently, some 33 projects are being funded by JICA under the Official Development Assistance (ODA).
Japan is the provider of the largest bilateral development assistance to Bangladesh,
Some of these projects didn’t get approval for development project proposal (DPP) and technical assistance project proforma (TPP) even three years after signing of the loan agreements.
Under the ODA, Japan helps develop nations with supplies, civil engineering and other assistance.
Tokyo charges 0.01 per cent interest and offer 40-year repayment period for ODA loans, having a 10-year grace period.
A recent portfolio review meeting on JICA’s ODA loan projects found that only nine projects are on track while nine other projects are “completely beyond track or moving very slowly”.
The meeting also found that MNCH and health system improvement project and disaster risk management enhancement project have zero disbursement though their loan agreements were signed in December 2015 and in June 2016 respectively.
They also found a significant number of underperforming projects including Chittagong city outer ring road project, foreign direct investment promotion project and small scale water resources development project.
Some slow-performing projects were also found which include inclusive city governance project, upazila governance and development project, urban building safety project, western Bangladesh bridge improvement project and northern Bangladesh integrated development project.
Sources said the meeting decided that Economic Relations Division (ERD) will arrange another review meeting on the slow-moving projects urgently.
In the review meeting, they said, senior programme manager of JICA Bangladesh office Suman Das Gupta cited three reasons— slow start-up, less speed and quality, and annual development programme (ADP) budget allocation— behind delay in project implementation.
He also said delay in giving approval to DPP/TPP holds up projects by 2-3 years.
Citing examples, he said the DPP of foreign direct investment promotion project has not been approved even 36 months after signing the loan agreement. The DPP of disaster risk management project has also not been approved 30 months after signing the loan agreement.
Mr Gupta also said at the procurement stage, the process of consultant selection delayed some projects by 2-3 years.
The contract signing on consulting services of disaster risk management project delayed by 30 months, small scale water resources development project saw delay in local consultant selection by one year, and MNCH and health system improvement project is delayed by 33 months for the same.
He suggested that the consultant selection process should be initiated immediately after project appraisal and request for proposal (RFP) be issued just after the loan pledge made by the government of Japan.
Mr Gupta also mentioned that project executing agencies and evaluation committees should follow JICA procurement guidelines and provisions of bid documents, and complete the bid evaluation and approval process within the bid validity period.
They also should complete the land acquisition process in a more efficient and timely manner, and the appointment of staff for project implementation unit should be done as per organogram of approved DPP soon after its approval, he said.
He also said delay in submission of auditor’s report and compliance to audit observations delay the project’s loan disbursement. “For JICA projects, no disbursement takes place until the audit observations are settled.”