Regions and Countries

	Table of Contents
p. 3 of 4 BACK | NEXT I. Development Situation II. Implementation of the Country Strategy and Program III. Portfolio Management Issues IV. Country Performance and Lending Level

Country Strategy and Program Update 2002-2004: Papua New Guinea

---

III. Portofolio Management Issues

A. Portfolio Performance Implementation

25. The current loan portfolio consists of 14 loans. The Health Sector Development Program is still being implemented although the corresponding loans have been disbursed and therefore closed. Loan portfolio performance, which has been relatively poor in the past, has recently improved as a result of Government and ADB efforts. Portfolio performance indicators are in Appendix 5. In terms of development objectives, 11 of the ongoing loans are rated as satisfactory and 3 as partly satisfactory. In terms of implementation progress, 10 are rated as satisfactory, 3 as partly satisfactory, and 1 as unsatisfactory. All the loan projects suffer from delays in implementation. A clear lesson is that coordination between Government agencies is essential. Project design must focus sharply on identifiable and quantifiable benefits. Frequent changes in personnel (both project and supervisory) are also detrimental. Recent improvements in the operations of the public procurement oversight agency have reduced a previously significant impediment to project implementation.

B. Counterpart Funding

26. Inadequate budget appropriations and subsequent releases have been a perennial problem in project implementation. The situation has improved considerably, beginning with the Government’s 1999 Supplementary Budget. In 2001, all ADB projects have received full appropriations. Although the overall fiscal constraints require less Government spending, the Government has prioritized projects assisted by funding agencies.

C. Monitoring and Evaluation

27. Past Government monitoring and evaluation focused largely on individual investment initiatives, evaluating the rate of implementation and impact at the close of the project. ADB has been instrumental in supporting these efforts in its loan projects. To refocus the public sector on performance, the Government intends to intensify activity-level monitoring and evaluation, and ADB will support public sector reform and strengthen management. The Government intends to broaden its policy and program monitoring and evaluation, and ADB will help develop the conceptual frameworks and mechanisms.

Back II. Implementation of the Country Strategy and Program	Next IV. Country Performance and Lending Level