The project had only limited, uneven success in raising tariffs, resulting in underfunding of operation and maintenance (O&M). This raises the need for wider institutional and policy reform. The support of ADB and other development partners has focused on helping the government to rebuild assets but has placed less emphasis on building the institutions and systems required to ensure these assets are maintained and used efficiently. Given the acute needs for infrastructure rehabilitation and expansion in urban areas in the 1990s, this emphasis on infrastructure provision was understandable. Today Mongolia lags behind other former socialist countries in institutional reform and strengthening and risks wasting resources on infrastructure that it cannot maintain and manage properly. While the project addressed this issue, it placed insufficient emphasis on delineating the functions of the aimag governments and the public urban service organizations (PUSOs) and on strengthening lines of accountability for delegated service provision.
Integrated Development of Basic Urban Services in Provincial Towns Project