Regions and Countries

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p. 3 of 4 BACK | NEXT I. Current Development Trends and Issues II. Implementation of the Country Strategy and Program III. Portfolio Management Issues IV. Country Performance and Assistance Levels

Country Strategy and Program 2003-2005: Lao People’s Democratic Republic

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III. Portfolio Management Issues

A. Portfolio Performance

23. In 2001, the ADB Resident Mission took the lead in portfolio monitoring, including the fielding of the Country Portfolio Review Mission and quarterly portfolio review meetings with the Government. The overall portfolio performance of ADB projects in the Lao PDR improved during 2001: 18 (94.7%) of 19 ongoing projects were classified as satisfactory compared to the ADB average of 78.4% in 2001. Submission of audited financial statements significantly improved, with 63.6% of projects submitting on time, compared to only 25.0% in 2000. Contract awards reached $52 million or 87.9% of projection in 2001, with a contract award ratio of 25.5%, higher than the ADB-wide average of 14.9%. Disbursement reached $44.7 million or 119.3% of projection in 2001, and the disbursement ratio was 18.9%, similar to the average for Asian Development Fund countries. Start-up performance continued to improve. Monitoring systems for awarding contracts and preparing audited financial statements are in use. However, there remains scope to improve compliance with loan covenants. At the initiative of the Government, a monitoring system on loan covenant compliance is being prepared. During the Country Portfolio Review Mission in 2001, ADB and the Government agreed on a time-bound action plan to improve portfolio performance, including (i) establishment of project implementation units before loan approval, (ii) early recruitment of consultants, (iii) strengthening of the procurement office in the Ministry of Finance and executing agencies, (iv) streamlining of project financial flow, (v) provision of adequate counterpart funds, and (vi) closer monitoring of portfolio performance.

B. Performance Monitoring and Evaluation

24. In the last year, three projects have been post-evaluated. Two projects including the Forth and Fifth Road Improvement Projects were classified as highly successful, and the Financial Sector Program Loan as partly successful. No project was classified as unsuccessful over the last five years. Lessons learned from the postevaluation will be appropriately reflected in the formulation and implementation of future projects and programs.

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