IMED finds causes of slow fund utilisation

Foreign resources allocation in the annual development programme (ADP) witnessed a drastic cut in recent years because of inability to spend project assistance (PA) after the coronavirus pandemic and Ukraine war have created some new realities.

In recent years, the government had to go for a big revision in PA’s share of ADP in the third quarter but the real expenditure was even lower than the revised allocation, resulting in a growing aid pipeline and a jump in commitment fees.

In the last five years, the government slashed Tk 601.48 billion of PA from the total original ADP allocation worth Tk 3,833.26 billion.

Out of the Tk 3,231.78 billion revised allocation, the final expenditure at the yearend was Tk 346.75 billion less, said Implementation, Monitoring and Evaluation Division (IMED).

The project watchdog, for the first time, has identified a number of reasons for this, including the global economic slowdown that caused problems for import-dependent projects.

In a report, the project watchdog singled out ministry-wise reasons for the gloomy picture of PA utilisation and is trying to form a research cell to resolve the problems.

Besides, delay in procurement document approval by the development partner, work suspension during Covid-19 pandemic, lack of capable consultants and value chain experts at SME level, increase of raw materials cost, delay in appointing firm for project drawing, designing, and monitoring, delay in tender evaluation are among other reasons.

IMED said that starting physical work of every World Bank funded project got delayed as approval required from the agency in every stage.

A major reason for the low PA utilisation was lack of foreign-currency matching fund against the project assistance for railway infrastructure project, complexity and procrastination in land acquisition, delay in consultant package contract variation.

Moreover, foreign contractors could not work during Covid time, while the dollar crisis due to the Russia-Ukraine war caused low spending for the Rooppur nuke power plant appointment of necessary manpower got delayed in some projects.

IMED found the highest 21 problems in the projects of the Ministry of Railways.

“We’re trying to find out the causes that hinder the foreign-funded project implementation,” said IMED Secretary Abul Kashem Md Mohiuddin.

He admitted that IMED’s activity has been confined to problem finding and making recommendations to resolve those only.

In these circumstances, he informed that the process is not to strengthen IMED and in that case, there will be a mechanism to monitor what steps have been taken according to IMED’s recommendations.

The proposed research cell can ensure accountability of the implementing agencies, IMED secretary added.