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Seminannual Report on Project Administration and Technical Assistance Implementation for the Period Ending 30 June 1999 : Country Implementation Highlights : Pacific Developing Member Countries
Marshall IslandsThere were four ongoing loans, with no loans approved or closed during the period. No loans were awaiting signing or effectiveness. One loan was classified as unsatisfactory in terms of implementation progress mainly because of delay in submission of audited accounts. Implementation of the other loans was proceeding satisfactorily, and there were no problems with counterpart funding. Lack of qualified counterpart staff, however, remains a perennial problem. In general, project implementation suffers from (i) problems associated with land lease agreements, (ii) lack of project implementation capacity, (iii) lack of coordination among implementing agencies, and (iv) procurement delays. There is a need to strengthen and empower the senior civil service cadre and designate a focal point and contact group to improve project implementation, and the Government has agreed to act on these issues. Minor changes in project scope and implementation arrangements were made to the unsatisfactory loan. None of the loans were delegated to the RM during the period, all four loans were under the administration of HQ. Under the Public Sector Reform Program loan, several government offices and supporting agencies were streamlined, resulting in a significant reduction in the total number of civil servants (a reduction of about 7 percent against a target of 14 percent). The budget deficit was minimized and several laws passed to increase private sector investments. The Revenue and Taxation Division was strengthened and tax collection improved. Reforms also eliminated subsidies to Air Marshall Islands. The third tranche release scheduled in October 1998 was delayed by eight months as of 30 June 1999 and is now scheduled for release in November 1999. Of the five tranche release conditions, three were met, with the necessary legislation passed. Work to meet the two remaining conditions is in progress. Bank assistance is being prepared to clean up the financial records of the Ministry of Finance and provide relevant training so as to improve transparency and accountability in financial management. Contract awards of $0.7 million represented 73 percent of the semiannual projection of $0.9 million and 16 percent of the annual projection of $4.3 million. Disbursements of $1.2 million were equivalent to 63 percent of the semiannual projection of $1.9 million and 20 percent of the annual projection of $5.9 million. Contract awards and commitments, and disbursement projections for the year were in keeping with the scheduled tranche release for the program loan. There were no disbursements from the program loan. The disbursement ratio reached 10.2 percent, compared with the Bankwide average of 11.9 percent and 15.5 percent as of 30 June 1998, because of the higher undisbursed loan balance at the beginning of the year. Net resource transfer decreased by $1.8 million compared with that in same period last year, also because of the lower disbursement. Audited accounts and financial statements were due for three loans; compliance was nil. Submissions were delayed by about six months in all cases despite follow-up by the Bank. The timely submission of audited financial statements continues to be a major problem, and private auditors were appointed under the loans to improve the situation. Of the four ongoing loans, the environmental covenants were met for one, were under implementation for two, and were not applicable to one. The social covenants were met for one loan and were under implementation for the other three. Tables 57 and 58 summarize the data for the Marshall Islands.  
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