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Seminannual Report on Project Administration and Technical Assistance Implementation for the Period Ending 30 June 1999 : Country Implementation Highlights
MongoliaThe number of ongoing loans decreased to 14 due to the closing of one loan and approval of none during the period. After the hiatus in lending in 1998 due to political uncertainties, loan processing was proceeding as scheduled. TA processing was also on track. In view of the weak implementation capacity of the EAs, the use of project management consultants was intensified, which helped to maintain reasonable progress. The portfolio performance, however, deteriorated during the period compared with that in 1998. Of the 14 ongoing loans, one was rated unsatisfactory in terms of implementation progress while one was rated partly satisfactory in achieving development objectives. No loans were awaiting effectiveness or signing. Two loans underwent minor changes in scope and implementation arrangements. The two major issues that need to be resolved to improve project implementation are the provision of counterpart funding, and delays in loan signing and effectiveness. Disbursements of tranches from the International Monetary Fund Enhanced Structural Adjustment Facility and the Bank's proposed Financial Sector Program loan should assist in easing the very tight budgetary situation and improve the availability of counterpart funding. Measures approved and initiated by the Bank to improve the submission of audited accounts had significant success. Also, the Bank provided TA for capacity building in project accounting to improve accounting procedures and resolve issues related to delays in the submission of audited accounts and financial statements. A project accounting manual was produced and adopted as an official document by the Government. The TA is still ongoing and is providing hands-on training to project accountants. In addition, a TA to improve accounting and auditing systems (Phase II) and a TA to develop procurement legislation, guidelines, regulations, and procedures are being implemented. Contract awards of $8.1 million, representing 23 percent of the semiannual projection of $35.2 million and 20 percent of the annual projection of $40.5 million, were achieved. Disbursements of $14.6 million, representing 43 percent of the semiannual projection of $33.8 million and 29 percent of the annual projection of $50.7 million, were made during the year. Considerable efforts are needed to sustain the disbursement ratio at the level of the past three years. There were no disbursements from program loans. The disbursement ratio increased from 10.7 percent as of 30 June 1998 to 11.1 percent, compared with Bankwide average of 11.9 percent, due to the lower undisbursed loan balance at the beginning of the year. Net resource transfer increased from $10.9 million as of 30 June 1998 to $13.4 million as of 30 June 1999 due to the lower service charge payments and higher disbursements compared with those in the same period in 1998. Audited project accounts and financial statements were due for nine loans. Compliance was met for eight, but was delayed by more than 12 months for one. This was a much improved performance. The environmental covenants were complied with for 2 of the 14 ongoing loans and were under implementation for 5. The covenants were not applicable to the remaining seven loans. The social covenants were met for one loan and were under implementation for two loans. The covenants were not applicable to the remaining 11 loans. Tables 43 and 44 summarize the data on Mongolia.  
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