Secondary Towns Integrated Flood Protection Project (Phase 2)

Sustainability of project assets and O&M arrangements. At appraisal, sustainability of project investments was raised as a risk and a number of measures to reduce this risk were proposed such as (i) raising engineering standards for more robust civil works options; (ii) strengthening local governments to improve financial management and revenue generation performance; (iii) firming up central government O&M commitments in line with a strategy prepared with project support; (iv) providing incentives for better O&M performance; and (v) preparation of a modified O&M model for using loan funds to partially finance O&M recurrent costs, on a diminishing contribution basis. Despite these measures, the PCR noted that project sustainability is constrained by a lack of initiatives and sources of funds for proper O&M of physical facilities such as river protection works, drainage systems, and waste disposal and management systems. Sustainability and O&M is a perennial issue with many governments. It is overly ambitious to attempt to address this problem on a project by project basis; it is an issue that requires the political and financial commitment of the government, a strong policy framework, and proper budgetary mechanisms to carry out. Efforts to address this issue should be the object of long-term policy dialogue with the governments.