Home 
Publications Online Publications Document
|
Seminannual Report on Project Administration and Technical Assistance Implementation for the Period Ending 30 June 1999 : Country Implementation Highlights
Lao People's Democratic RepublicThe number of ongoing loans remained at 16 as a result of the approval of one loan and closing of one during the first half of 1999. All the loans, except three, were rated either as satisfactory or highly satisfactory in both implementation progress and achievement of development objectives. Three loans were rated as partly satisfactory in terms of implementation progress. The portfolio performance deteriorated compared with that in the second half of 1998 when all the projects were rated as satisfactory. One loan approved in June 1998 was declared effective during the period, and the loan approved during the period is yet to be signed. One loan experienced a cost overrun. No loans underwent any change in project scope or implementation arrangements. The portfolio was relatively new and sufficient time had not elapsed to reveal any potential problems. However, with the Bank moving more toward agriculture and the social sectors, which are traditionally more difficult to implement than physical infrastructure projects, some difficulties in performance may be encountered in the future. The Bank's RM, which will begin operation in early 2000, will be critical in helping to resolve project implementation difficulties. The Government has demonstrated its willingness, albeit slowly, to adopt economic and financial policy reforms, increase the emphasis on rural development and social sector investment, and improve implementation performance. The Government continues to streamline its internal procedures to improve the project implementation environment. Also, the Bank is providing TAs for building capacity in the government institutions. However, it is still recognized that the limited capacity of EAs is a major constraint. There is a need to closely examine and evaluate the capacity of line ministries and agencies that are responsible for implementing projects in the program. It will also be necessary to provide appropriate assistance for capacity building in those ministries and agencies prior to loan processing. In addition, project design will take into account the level of the agencies' implementing capacity. The current economic turmoil in the region has significant implications for domestic resource mobilization, counterpart fund availability, and the political willingness to continue the reform process. Issues, including measures to stabilize the economy and counterpart fund availability, were discussed at length with Government. To date there has been no shortfall of counterpart funds for Bank-assisted projects. The Government has stated that all externally financed projects are a priority for local counterpart financing. Financing of shortfalls for one project that experienced cost overrun is being resolved. The Bank and the World Bank are discussing ways of developing a common approach to improve the Government's procurement activities. Although project implementation in the Lao PDR has generally been satisfactory, a number of issues continued to impede project implementation performance. One such issue pertains to the delay in submission of audited project accounts and financial statements, resulting from the limited number of private auditing firms given government accreditation. Project-specific issues were discussed with the agencies, and the Government agreed to undertake a number of important steps to address them. Also, the Government advised the Bank that new procedures would be established to give project coordination units direct access to their imprest accounts; however, these procedures have yet to be implemented. Contract awards reached $7.2 million, or 38 percent of the semiannual projection of $19.1 million and 22 percent of the annual projection of $32.6 million, while disbursements of $33.8 million represented 85 percent of the corresponding projection of $39.9 million and 52 percent of the annual target of $65.4 million. Contract awards and disbursements did not reach the projections because of slow implementation in all sectors. The disbursement ratio increased from 11.6 percent as of 30 June 1998 to 15.7 percent as of 30 June 1999, which was significantly higher than the Bankwide average of 11.9 percent. This performance is mainly due to the relatively low undisbursed loan balance at the beginning of the year. There were no disbursements from program loans. The net resource transfer slightly increased from $28.2 million as of 30 June 1998 to $29.7 million as of 30 June 1999 due to an increase in disbursements. Audited project accounts and financial statements were due for 10 loans; compliance was met for five, but was delayed for the other five. Compliance for four of the latter loans was within six months of the due dates, and one loan met compliance within 6-12 months of the due date. Of the 16 ongoing loans, 3 complied with the environmental covenants and compliance was ongoing for the seven others. The environmental covenants did not apply to the remaining six. Two loans complied with the social covenants and compliance was in progress for nine. The covenants did not apply to the remaining five loans. Tables 37 and 38 summarize the data on the Lao PDR.  
|
RSS Feeds
Back
Top of page