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Tuesday, March 22, 2016

ADP Implementation Foreign aid to be cut 24pc

Rejaul Karim Byron

The planning ministry has proposed slashing foreign assistance from the current Annual Development Programme by 24 per cent mostly due to non-availability of matching funds and delay in approval from the donors.
According to the proposal, foreign aid of Tk 5,110 crore would be trimmed from the ADP to Tk 16,095 crore, said ministry sources.
Besides, Tk 2,520 crore budget support would be revised to Tk 1,425 crore.
The revised ADP will be placed before a meeting of National Economic Council (NEC) on Sunday for approval.
The ministry has suggested carving the highest Tk 1,254 crore from the Padma Bridge Project.
An Economic Relations Division (ERD) report said finalisation of appointment of contractors for the project will not be possible by June next year as the donors are yet to approve the tender documents.
After reviewing 20 foreign-funded projects, the ERD has listed several reasons for lowering the foreign assistance.
For example, the bank guarantee submitted by the selected bidder of World Bank-funded Efficient Lighting Initiative for Bangladesh (ELIB) project was found fake. As a result the authorities concerned decided to go for re-tendering and a WB assistance of Tk 168 crore remained unutilised.
An ERD high official said in such cases the total tender process needs to start afresh.
The allocation for the Khulna 150 MW Power Plant Project is going to be downsized by Tk100 crore as a shipment of imported goods had been deferred due to delay in signing an agreement between the government and the concessionaire.
Three donors including the Asian Development Bank (ADB) and Norwegian Agency for Development Cooperation (Norad) have been financing the 10-Town Power Distribution System Development Project. The main financier ADB has completed all the purchases for the project.
But in the meantime, the deadline for Norad's loan activation expired and as the donor did not renew the deal, Tk 60 crore project aid would be slashed, mentioned the ERD report.
After preparing the tender schedule for the Southwest Region Gas Distribution Network Project, it was sent to the financier ADB in August last year for its opinion. The Energy Division had received ADB's opinion after four months.
Due to this delay, completing the purchase for the project would not be possible in the current fiscal year and consequently Tk 119 crore foreign aid would be carved.
About Tk 203 crore would be slashed from the Road Network Improvement and Maintenance Project, funded by ADB.
After the government had acquired the required land, the concessionaire sought another year to complete the project. But as the ADB refused to extend the loan execution period, the authorities had to downsize the scheme.

The project aid for laying a double line railway track between Tongi and Bhairab Bazar would be slashed as the matching funds were not available.

Sorce: The Daily Star, 31 March 2012