Govt agencies even couldn't use confirmed assistance

FHM Humayan Kabir | Published: July 29, 2017 07:38:24 | Updated: October 24, 2017 01:44:14

A year-on-year steep rise in foreign-aid commitments virtually jammed the pipeline as disbursement didn't increase proportionately mainly for failure to execute projects in time, sources said.

Failure in utilisation of all the confirmed loans and grants resulted in the ballooning of the foreign assistance in the pipeline-as much as $35.80 billion till the just-concluded financial year (FY) 2016-17, official data showed.

Officials also blamed Friday complex procedure and procrastination on the development partners' side in aid release to Bangladesh against various projects and programmes for such a situation.

They said although confirmation of the concessional loans and grants had more than tripled over the last couple of years, the disbursement growth still stood stunted.

According to government statistics, the development partners working in Bangladesh made commitment of external loans and grants worth US$17.86 billion in the last FY2017 compared to $5.26 billion two years ago.

The commitment of the external medium-and long-term loans (MLTL) and grants in the FY2017 also increased two and a half times from $7.05 billion in the previous FY2016 , Economic Relations Division (ERD) officials said.

The commitment of foreign aid swelled in the last FY2017 due mainly to a single-largest commitment of $11.38 billion worth of state credit by the Russian government for Bangladesh's 2000-megawatt Ruppoor nuclear power project, the ERD officials said.

Bangladesh's development partners, including the World Bank (WB), the Asian Development Bank (ADB), Japan, and others confirmed loans and grants for different development programmes and projects every year to cut hunger and upgrade infrastructure.

Usually, the development partners first make commitment through signing agreement and then disburse the promised aid on the basis of specific project execution.

According to the ERD, the development partners disbursed $3.08 billion worth of aid against $5.84 billion committed in the FY2014.

In FY2013, they released $2.81 billion worth of MLTL and grants against the commitment of $5.85 billion.

Farida Nasreen, an Additional Secretary at the ERD, sees lack of utilisation capacity of the government project-executing agencies and procrastination from some development partners as key reasons for available but unused foreign aid bloating in the pipeline.

"In most of the cases the executing agencies fail to utilise the available external resources they target. Sometimes some development partners take longer to approve procurement and other documents of the implementing government agencies'. So, the project execution gets delayed and aid remains unused," she said.

Ms Nasreen told the FE that they were trying to expedite the aid-utilisation capacity through time-to-time monitoring and review of the projects.

"We also arrange tripartite meeting with the executing agencies and the development partners concerned for streamlining implementation and remove hurdles from both the sides," she said.

The ERD in March this year issued a circular regarding the structure of development- project preparation and implementation to quicken the foreign-funded project execution, the Additional Secretary said.

She told this reporter that they are hopeful about getting results from the update on the structure which will lessen the unutilised foreign aid in the pipeline within a few years.

Former Finance and Planning Adviser of caretaker government Dr Mirza Azizul Islam said: "We used to hear that the government takes measures to expedite the project execution. But all goes in vain as we do not see any fruitful outcome."

He suggests the government should ensure accountability of the Project Directors (PDs), agencies and ministries concerned on project execution. It should introduce incentives for the PDs. If any PD works better, they should be rewarded. On the other hand, if any PD performed worse should have been punished.

"Besides, the executing agencies should complete all the necessary procurement processes before final approval for the projects. When a project will be approved, then it can give work order to the selected bidders. It will cut the start-up delays of the project, which is one of the key obstacles on the way to project implementation," Dr Aziz told the FE.

He also called upon the headquarters of the development partners to delegate more power to their missions in different countries so that they could give decision without sending some documents to the headquarters.

Meanwhile, another senior ERD official said the aid disbursement could be higher if the militant attack on Holey Artisan café in July last year had not affected the development works.

"Some development partners withdrew their manpower from Bangladesh immediately after the attacks. It continued for some few months which hampered the development works. So, the foreign-aid disbursement has been affected during that period," he said.

The official said slow progress on the Annual Development Programme (ADP), especially poor spending from the available foreign assistance (project aid), affected the aid disbursement in the last fiscal.

The government agencies and ministries had spent 78 per cent of their Tk 357.97 billion worth of foreign-fund allocations in the Tk 1.19 trillion ADP outlay in the last fiscal.

However, they performed better in spending government's internal funds as they utilised 93 per cent of the Tk777 billion allocated from own coffers last fiscal.

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