Regional: Improving Procurement in South Asia

Agriculture, natural resources and rural development / Irrigation - Water-based natural resources management

Energy / Energy utility services

Transport / Transport policies and institutional development

Water and other urban infrastructure and services / Urban policy, institutional and capacity development

Experience from ADB-financed projects across DMCs shows that procurement takes a considerable amount of time and is often a source of delay in project implementation. Common causes of procurement delays are weak implementation capacity, especially in procurement and project management, unfamiliarity with ADB procurement processes and procedures, weak governance system and insufficient monitoring and progress reporting in procurement.

Although reform initiatives supporting procurement reforms have been implemented in several DMCs, a huge task remains to translate these into actual changes in procurement practices, improvements to procurement outcomes and better project implementation. Good organizational practice includes setting specific targets on the performance of the agency's procurement portfolio and continuously monitoring and reporting on the progress and results being achieved. This strategic approach to managing procurement is difficult to adopt without capacity and support and without the right capabilities of and incentives for procurement staff.

ADB carries out procurement capacity assessments of procuring entities during project processing to detect risk areas and adopt suitable risk mitigation measures during project implementation. The underlying causes of weak procurement and implementation capacity, whether they are inherent in the executing (EA) or implementing (IA) agency or in the environment where the agencies operate, are not necessarily dealt with during project processing and project implementation stages. This contributes to significant delays during implementation of the project portfolio.

Experience from ADB-financed projects across DMCs shows that procurement takes a considerable amount of time and is often a source of delay in project implementation. Common causes of procurement delays are weak implementation capacity, especially in procurement and project management, unfamiliarity with ADB procurement processes and procedures, weak governance system and insufficient monitoring and progress reporting in procurement.

Although reform initiatives supporting procurement reforms have been implemented in several DMCs, a huge task remains to translate these into actual changes in procurement practices, improvements to procurement outcomes and better project implementation. Good organizational practice includes setting specific targets on the performance of the agency's procurement portfolio and continuously monitoring and reporting on the progress and results being achieved. This strategic approach to managing procurement is difficult to adopt without capacity and support and without the right capabilities of and incentives for procurement staff.

ADB carries out procurement capacity assessments of procuring entities during project processing to detect risk areas and adopt suitable risk mitigation measures during project implementation. The underlying causes of weak procurement and implementation capacity, whether they are inherent in the executing (EA) or implementing (IA) agency or in the environment where the agencies operate, are not necessarily dealt with during project processing and project implementation stages. This contributes to significant delays during implementation of the project portfolio.

The TA will follow a new direct approach that focuses on actively supporting executing agencies (EAs) and implementing agencies (IAs) and other key participants in procurement in the key sectors of ADB assistance. The focus on individual EAs/IAs will allow innovative and focused interventions that can yield immediate results without major legal or institutional reforms. The TA will help facilitate procurement by EAs/IAs by providing hands-on support and direct assistance in key stages of the procurement process followed by EAs/IAs. This practical direct approach will complement other broader efforts and is expected to help improve quality and reduce delays in procurement, leading to project implementation delays.

The EAs/IAs will be determined in consultation with DMC governments and the national public procurement authorities. A partnership approach with the EAs/IAs will be implemented to improve their procurement operations. The lessons learned and results achieved will be shared and replicated in other EAs/IAs. The TA will be demand-driven to ensure ownership and commitment from EAs/IAs. For each country and EA/IA supported through the TA, a procurement monitoring and tracking system will be established and used for monitoring of procurement timelines and results.

Improved procurement process

Strengthened procurement and project management capacity

On 6 April 2017, ADB approved an increase in TA amount by $1.25 million to support further efforts and intensified activities to improve procurement quality and efficiency in increasing project disbursements. The TA scope was expanded to enhance TA utility and meet increased demand for services and support to further strengthen procurement and project management capacity.

The TA has been supporting Bangladesh, India, Nepal and Sri Lanka operations by adding capacity in education, energy and transport sectors, and water resource management. Project analyst support is also being provided in sector divisions to enhance project management and procurement capacity.

To date, technical support has been provided to 50 procurement cases in Bangladesh, Bhutan, India, Nepal and Sri Lanka. In strengthening procurement and project management capacity, about 20 procurement and financial management clinics were conducted in Sri Lanka with more than 500 participants trained on ADB procurement, consultant recruitment, financial management, project management and contract management and administration. The TA is currently supported by one international procurement advisor to handle critical procurement packages of priority infrastructure projects in South Asia DMCs. These are supported by 20 national procurement and financial management specialists and project analysts, to meet increased demand for services and support.