Project Implementation and Administration Seminar

Speech by ADB Sri Lanka Resident Mission Country Director Rita O'Sullivan on 30 January in Colombo, Sri Lanka

Good Morning!

I welcome all of you, on behalf of the Sri Lanka Resident Mission and the Operations Services and Financial Management Department (OSFMD) to this Project Implementation and Administration Seminar.

I would particularly like to welcome our colleagues from ADB Headquarters, Ms Rubina Shaheen, Procurement Specialist to Colombo.

I also would like to thank the Ministry of Finance, other Government Ministries and Executing Agencies for helping organizing this seminar and nominating you for participation.

This workshop will provide you with an opportunity to learn and understand ADB Guidelines, Procedures and Practices on two Components, namely;

• Use and Procurement of Consulting Services
• Procurement of Goods and Works

This seminar is one of the most important efforts of the ADB to improve implementation performance of both ongoing and future ADB funded projects by way of capacity building of our counterpart agencies.

The seminar brings together ADB's best expertise in respective components and the government counterparts directly involved in project implementation.

It also provides a forum for clarifications and further improvements to both our practices.

However, it is also important that we are clear as to why we are holding this seminar and making this effort to;

• Minimize the delays that take place at various stages of project implementation;
• Minimize the number of flawed projects, and;
• Take steps to eradicate corruption as corruption carries with it both social and economic costs.

ADB defines corruption as the abuse of public or private office for personal gain. This means any behavior in which people in the public or private sectors improperly and unlawfully enrich themselves or those close to them, or induce others to do so, by misusing their position.

The purpose of ADB's Anticorruption Policy, approved in July 1998, is to reduce the burden corruption exacts from the governments and economies of the region.

The policy has three objectives:

1. Support competitive markets and effective public administration,
2. Support explicit anticorruption efforts, and
3. Ensure ADB-financed projects and its staff adhere to the highest ethical standards.

We take a firm line on corruption because corruption;

• Favors of inefficient producers
• Leads to un-fare and inequitable distribution of public resources
• Leaks revenue from government to private hands
• Leads to a loss of confidence in government

The ADB will continue to support

• Competitive markets and efficient, effective, accountable and transparent public sector administration
• Promising anti-corruption efforts on a case-by-case basis and improving the quality of dialog on governance issues

We will ensure that ADB projects/staff adhere to the highest standards;

• Maintaining the integrity of ADB lending and TA operations
• Procurement reform ( and review of policy)
• Independent internal reporting mechanisms
• Improving quality of oversight
• Advancing staff awareness
• Whistle-blower protection
• Percentage of Government

Procurement can account for more that 15% of GDP in South Asian countries.

Therefore, when we are addressing procurement issues, we are addressing the island's GDP growth potential as well.

• A recent estimate claims that Sri Lanka has lost 2% of its GDP due to corruption (Prof. A.D.V. de S. Indraratna).
• This would be equal to a total sum of $1.164 billion in 2011.
• In per capita terms, this is equal to more than $50.

A recent COPE report studied 46 public sector enterprises and found corruption in 16 of these.

As of 31 December 2012, ADB has approved a total of 164 loans, with cumulative lending of $5.676 billion to Sri Lanka.

In addition, ADB has provided $358 million grant assistance (including ADB administered co financed grants) for projects and $120.6 million through 256 technical assistance grants.

The current portfolio includes 51 ongoing loans for 30 projects with a net loan amount of $2.4 billion with cumulative contract awards and disbursements of $1.4 billion and $1.1 billion, respectively.

The ongoing portfolio primarily is for Transport, Urban & Water and Energy Sector and contributes for 84% of the loan amount. ADB has been supporting to the government's efforts in post-conflict reconstruction.

ADB's portfolio performance continued to improve in 2012, disbursing over $300 million. This contributed to achieve the highest disbursement ratio (24.4%) for the country during last five years. In 2012 ADB has approved 4 new projects for a total of $352 million in urban, water and Energy sectors for the country. Four projects were physically completed during 2012.

Significant projects that contributed in high disbursements for 2012 were: Colombo Port Expansion project, Northern Road Connectivity, Clean Energy and Access Improvement Project and Conflict Affected Region Emergency Project. We appreciate and recognize the efforts of all Project Directors for their high commitment to the development of Sri Lanka. Let me highlight and recognize two project directors for their significant performance in 2012.

Amidst all these efforts to improve portfolio performance, the role of all the officers directly involved in implementing projects, that is all of YOU gather here for this seminar, is of paramount importance. Therefore, I request you to make full use of this opportunity to learn, and clarify issues related to all three components of this seminar. This is also an opportunity for you to personally get to know the ADB counterpart experts. Please make full use of it.

Given the importance of this Seminar, from the Sri Lanka Resident Mission side, we have endeavored to accommodate Government officers based on their expertise and involvement in the project. My colleagues from Manila, along with their SLRM counterparts, will make their best efforts to attend to the required logistics to the best of their ability.

ADB is on a journey to accept the country systems for ADB lending process.