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Countries and Regions Country Partnership Strategies Document
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Country Strategy and Program 2004-2006: Pakistan
III. Portfolio Management IssuesA. Portfolio Performance19. As of 31 December 2002, ADB had approved a total of 196 public sector loans for Pakistan for a principal amount of $12.7 billion. In addition, ADB had provided support for 253 TA projects for an approved amount of $99.0 million. Presently, 53 public sector loans covering 38 projects are under implementation, of which 83% loans are rated satisfactory (Appendix 1, Table A1.9). In addition, 8 private sector loans for a total of $152.5 million are under implementation. Finally, 57 TAs for a total of $29.5 million are under implementation. 20. Contract awards for ADB projects in Pakistan have averaged $376 million annually over the past 5 years. Overall disbursements have averaged $503.9 million annually during the same period, of which disbursements for policy-based operations have averaged $238 million. In 2002, portfolio performance improved with actual contract awards amounting to $424.6 million or 100.9% of the annual projection, and disbursements to $501.4 million or 100.5% of the annual projection. However, the overall contract award ratio of 14.1% in 2002 (6.6% for project loans) was still lower than the corresponding ADB-wide average ratio of 22.6% (17.9% for project loans). The disbursement ratio of 23.2% in 2002 (Appendix 1, Tables A1.7), including program loans, was higher than the ADB-wide average of 22.2%, while the disbursement ratio of 13.7% for project loans alone was less than the corresponding ADB-wide average of 16.9%. The number of loans at risk declined from 17 in 2001 to 9 in 2002 (Appendix 1, Tables A1.6 and A1.9), and the number of problem projects fell from 13 in 2001 to 9 in 2002. B. Performance Monitoring and Evaluation21. The improved portfolio performance described above was the result of a comprehensive approach to regularly reviewing and monitoring projects. To further improve project implementation capacity through greater ownership, and to ensure continuity through project processing to implementation, ADB has agreed with the Government on a new initiative to establish core project management units (CPMUs) for all new projects at the fact-finding stage. The Government, including all provincial governments, has agreed to establish revolving funds for funding CPMUs, prior to approval of projects, from 1 July 2003. This will facilitate actions to be taken for all startup activities. To strengthen the Government’s existing capabilities for project monitoring and evaluation as well as project financial management, ADB approved a TA on Strengthening Portfolio Performance and Monitoring in November 2002, while a TA on Strengthening the Financial Management Capacity of Project Management Units is earmarked for 2003. 22. A key part of portfolio performance depends on sustaining intensive policy dialogue with counterpart agencies. The implications of this for the Pakistan Resident Mission (PRM) are quite evident, especially with the rapidly expanding portfolio of governance reform loans and TAs (the portfolio composition in the past few years has shifted to include a much higher number of TAs financed out of loans). The Access to Justice Program, for instance, has 29 implementing agencies responsible for achievement of policy actions under the program. Further, the provincialization of ADB assistance and the advent of policy reform-focused public resource management programs in Punjab and Balochistan will place further demands on PRM. 23. The Operations Evaluation Division has carried out two evaluations since the approval of the CSP (Appendix 1, Table A1.8). The evaluation of the Second Barani Area Development Project, in August 2002, found the project to be “partly successful”. The evaluation of the Selected Advisory Technical Assistance for Capital Market Development in Pakistan, in January 2003, rated the cluster of six TAs that were evaluated as being overall “successful”.
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