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Lesson
The need for the cancelation of loan savings would be avoided by using realistic cost estimates during project preparation, as pointed out in the project completion report, is an appropriate lesson. However, this validation notes that the actual project cost was 28% lower than appraisal estimates, but the reduction in total ADB loan was 45%, i.e., from an estimate of $463 million to $253 million at program closing. The lower program cost reflected high-cost estimates, but higher counterpart funding was the bigger factor in the cancelation of the loan savings.

Project Number: 42039-033, 42039-036
Project Name: Power Transmission Investment Program (Multitranche Financing Facility and Tranche 3)
Report Date:
Lesson
Processing teams need to ensure that the scope and cost estimate of projects are realistic and reflect the actual contexts. Changes in the procurement plan and safeguards document necessitated by the revisions in project scope and costs caused startup delays. The Viet Nam component had a large amount of undisbursed budget because of overestimations in the cost of civil works and land acquisition and resettlement. Advance actions to engage critical consultants early enough should have helped mitigate the delays.

Project Number: 41444-013
Project Name: Second Northern Greater Mekong Subregion Transport Network Improvement Project
Report Date:
Lesson
Overestimated project costs lead to unutilized loan amounts and wastage of commitment fees. At appraisal, the investment program was estimated to cost $920.0 million, comprising ADB loans of $730.0 million (79.4%) and government contributions of $190.0 million (20.6%). At completion, the program cost totaled $669.3 million, of which ADB provided $253.8 million (37.9%).

Project Number: 42039-033, 42039-036
Project Name: Power Transmission Investment Program
Report Date: