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 Update 2006–2008: Pakistan

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III. Portfolio Management Issues

A. Portfolio Performance

21. As of end 2004, 239 loans, including private sector loans, amounting to $14.26 billion and 293 TA projects amounting to $137.94 million have been extended to Pakistan. Pakistan had 61 ongoing public sector loans amounting to $5.08 billion by end December 2004 (Appendix 1, Table A1.9). 64 active TAs amounting to $53.88 million were also being implemented. ADB's private sector portfolio comprises four equity investments ($4.76 million), two loans ($26.0 million), and two complementary cofinancing loans ($36.4 million).

22. The disbursement ratio in 2004 improved to 21.9% from 16.5% in 2003, and was higher than the ADB-wide ratio of 17.4% in 2004 (Appendix 1, Table A1.7). Similarly, the contract award ratio improved to 18.6% in 2004 from13.9% in 2003, and was higher than the ADB-wide ratio of 17.3% in 2004. Disbursements in 2004 for Pakistan totaled a record $638.78 million; however, this was still less than the target of $880.75 million. Contract awards totaled $643.39 million against a target of $806.23 million. The contract awards and disbursements, although higher than in recent years, were below target mainly because of fairly high projections in 2004 and delays in project implementation. The reasons for delays in contract awards were delayed establishment of PMUs, slow processing of tender documents, and delayed recruitment of consultants. For smaller contracts, delays also occurred because of lack of proper interagency coordination. Finally, the lower-than-targeted disbursement is also attributable to delays in program loan tranche releases. By end 2004, 11.5% of the portfolio (7 loans) was "at risk," which was an improvement from 17.2% (10 loans) in 2003 (Appendix 1, Tables A1.6 and A1.9).

B. Performance Monitoring and Evaluation

23. Efforts to improve Pakistan's portfolio of ADB projects continued in 2004. The country portfolio review mission agreed with the Government on a two-pronged approach to improve portfolio performance, comprising (i) strengthening, monitoring, and evaluating project performance through results-based monitoring; and (ii) strengthening project implementation capacity. The project monitoring and evaluation system and results-based monitoring of projects are being strengthened with the help of two ADB technical assistance projects3. The scope of the monitoring system is being extended to capture design phase parameters to assess the adequacy of project designs with respect to (i) linkage with PRSP; (ii) assessment of risks, sustainability, and capacity; (iii) accuracy of data and information used; and (iv) assessment of strategy, approaches, and arrangements adopted. The monitoring system is also being expanded to include line ministries at the federal level and line departments in the provinces, as well as subsequently to include non-ADB projects. Finally, assistance is being provided to improve the quality of government planning documents (PC-1s) to enable proper control points for results-based monitoring of projects to be established. Measures to strengthen the project implementation capacity of the executing agencies includes streamlining PMUs, establishing core project management units (CPMUs) from the loan fact-finding stage, strengthening auditing and accounting capabilities of PMUs, and improving the environment for consultants to enable them to perform better.

24. OED has carried out four evaluations since the CSP approval in May 2002. (Appendix 1, Table A1.8 shows loans distribution by evaluation ratings evaluated during 1996-2004). The Second Barani Area Development Project, evaluated in August 2002, was found partly successful. In January 2003, the technical assistance performance audit report on Selected Advisory Technical Assistance for Capital Market Development in Pakistan evaluated six TAs? one highly successful, three successful, and two partly successful. Also in 2003, the Population Project was rated successful, while the Livestock Development Project was found to be unsuccessful during the evaluation conducted in 2004. A Country Assistance Program Evaluation (CAPE) for Pakistan conducted by OED is presently underway.

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