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Lesson
Problematic shifting of priorities. Continuing problems with government approvals, and constant changes in focus, scope, and direction caused major delays. ADB noted a range of concerns over the continuing delays on the processing of the Project in its previous incarnation, the Karachi Mega City Development Program, after developing the loan proposal to the point of loan negotiations in May 2008.

Project Number: 38405-013
Project Name: Mega City Development Project
Report Date:
Lesson
Avoidance of challenging issues. At both government levels (the government of Sindh and City District Government of Karachi or CDGK), there was a systematic avoidance of exposure to and tackling of various governance and institutional issues, as well as reforms required to examine and correct these challenges. Analysis of the few project subcomponents completed illustrates that the government of Sindh and CDGK only implemented easy studies that did not and could not tackle major disputes or issues that might require serious reforms in Karachi.

Project Number: 38405-013
Project Name: Mega City Development Project
Report Date:
Lesson
Lessons from previous projects. Lessons from two older ADB urban sector loan projects to Karachi in 1986 and 1991, respectively, which were rated unsuccessful and partly successful, include the need for (i) greater attention to sustainability, (ii) enhanced project design based on sound assessments, (iii) careful consideration for institutional shortcomings of executing and implementing agencies, and (iv) greater efforts to address the financial insolvency problems of the Karachi local government bodies.

Project Number: 38405-013
Project Name: Mega City Development Project
Report Date:
Lesson
Weak government commitment. Given the political environment and the likelihood that a significant lack of consensus might be a daily reality on this project, the design should never have been so complex, with four different subcomponents, leading to a much larger MFF expectation. Perhaps a lesson here is that to achieve early and committed buy-in to required reforms and institutional shake-up, smaller and simpler components could be tested through a small scale or project preparatory TAs, which may lead to visible and larger MFF commitments.

Project Number: 38405-013
Project Name: Mega City Development Project
Report Date:
Lesson
Counterpart funding and incentive issues in TA loans. Despite the challenges in project implementation, the project support unit (PSU) and local support unit (LSU) had utilized close to $4 million in counterpart funding, while ADB disbursed only 15% of the TA loan. As a result, the actual split between ADB and the government was 15:85, when the agreement was 70:30. Thus, a key lesson is that there should have been far greater oversight on the utilization of counterpart funds, as the ADB-financed expenditures and activities and overall progress of the TA loan lagged far behind.

Project Number: 38405-013
Project Name: Mega City Development Project
Report Date: