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Lesson
IT-related project components need extra attention from ADB in small, remote countries with low capacity. From the start, the IT components for the land management administrations and FSMDB were not properly scoped and resourced. They did not adequately consider the limited capacity of internal IT departments and local IT providers. They also failed to address such related problems as the need to provide implementation support throughout the first year of operation.

Project Number: 33314-013
Project Name: Federated States of Micronesia: Private Sector Development Program
Report Date:
Lesson
Public enterprise reform in the FSM requires creative approaches to involving the private sector in the management of public assets given limited private sector capacity and interest. The effort to reform and divest public enterprises has not been as successful as hoped. One reason is that in such a small and remote lower-income country with a weak private sector, there are few people with the capital or business experience to bid for or successfully manage such enterprises.

Project Number: 33314-013
Project Name: Federated States of Micronesia: Private Sector Development Program
Report Date:
Lesson
An effective project implementation entity is important when multiple financiers are involved, in order to ensure uniform standards in the construction of the project road. For the ADB-funded section of the road, the Lao PDR government could keep track of expenditures and verify if timelines and guidelines are followed. This was not the case with the PRC and Thailand financed sections. For example, the PRC used its own design standards for the road without conducting any dialogue with the Lao PDR government.

Project Number: 34231-013
Project Name: Greater Mekong Subregion: Northern Economic Corridor Project in the Lao People’s Democratic Republic
Report Date:
Lesson
An agreement for collective maintenance is an essential element for the sustainability of subregional road projects, such as this project. A mechanism needs to be devised for the costs to be shared in proportion to the benefits received by the stakeholders.

Project Number: 34231-013
Project Name: Greater Mekong Subregion: Northern Economic Corridor Project in the Lao People’s Democratic Republic
Report Date:
Lesson
Objective quantitative assessment of benefits and costs may help in the setting up a mechanism for fair distribution of costs across countries. The IEM economic analysis indicates that the net present value of the project for the Lao PDR could be made positive if higher grant elements were used in the financing by the PRC and Thailand.

Project Number: 34231-013
Project Name: Greater Mekong Subregion: Northern Economic Corridor Project in the Lao People’s Democratic Republic
Report Date:
Lesson
Implementing policy reforms entails a complex and long-term process of change. The legislation and policy measures that were enacted required fundamental changes to the roles of several concerned institutions. These types of reforms can take longer than anticipated, adding uncertainty to the realization of actual outputs and outcomes. The full extent of reforms, especially to institutional arrangements, may extend well beyond the usual administrative life of a project loan.

Project Number: 33243-013
Project Name: Road Maintenance and Improvement Project
Report Date:
Lesson
Baseline data collection is a priority. At appraisal and during implementation, greater attention should have been given to the design and monitoring framework, especially in establishing measurable indicators and their baseline values, and target values with a realistic time frame to achieve these goals. Higher priority should have been given to ensure that baseline data were collected prior to project implementation, and updated during project implementation and at completion. The absence of baseline data has made this independent evaluation of the project difficult.

Project Number: 33243-013
Project Name: Road Maintenance and Improvement Project
Report Date:
Lesson
A greater level of upfront efforts in project preparation, particularly in the areas of preparing credible traffic forecasts and identifying road alignments, could pay large dividends. Mitigation measures identified in the RRP to address project risks were largely unsuccessful, and the project was subject to long time delays, problems with land acquisition and procurement, shortfalls in demand, and insufficient funding for maintenance.

Project Number: 33243-013
Project Name: Road Maintenance and Improvement Project
Report Date:
Lesson
WAPDA was unbundled because the organization had degenerated into an unwieldy, overcentralized, and multilayered bureaucracy, dominated by political expediency and experiencing declining efficiency and quality of service. Even though the unbundling was carried out, operational and financial performance of the unbundled entities did not improve significantly.

Project Number: 32146-013
Project Name: Energy Sector Restructuring Program
Report Date:
Lesson
The privatization of KESC demonstrates that private sector ownership in the energy sector has benefits in terms of efficiency gains. System losses are declining significantly, and KESC’s financial performance has improved substantially since privatization, such that it is now self-financing since first turning a profit in 2012. This accomplishment is remarkable considering the environment in which it operates includes a constrained availability of fuel for its thermal power plants and an unfavorable security and law and order situation.

Project Number: 32146-013
Project Name: Energy Sector Restructuring Program
Report Date:
Lesson
Subsidization of electricity is a drain on budgetary resources and not sustainable in the longer term when an economy is growing and tax revenues are stagnant. Under the ESRP, electricity subsidies were expected to be eliminated with the establishment of NEPRA, and the tariff was expected to reflect and recover the full cost of production. However, the government continues to subsidize electricity, primarily to domestic and agricultural customers.

Project Number: 32146-013
Project Name: Energy Sector Restructuring Program
Report Date:
Lesson
The ESRP comprised three loans. The largest (Loan 1807) was for $300 million and was designed as a three tranche plus incentive tranche program loan. The other two loans were a $50 million Asian Development Fund loan (Loan 1808) and a $5 million TA loan (Loan 1809). The government availed of the first and incentive tranches of Loan 1807 for $150 million as well as the $50 million Asian Development Fund loan when it complied with the first tranche loan conditions.

Project Number: 32146-013
Project Name: Energy Sector Restructuring Program
Report Date:
Lesson
Cross-indebtedness has been an energy sector issue since the 1980s. Although the ESRP provided the government the means to eliminate crossindebtedness by financing the arrears out of the budget, the respite provided by the ESRP was temporary, and cross-indebtedness became a major issue again shortly thereafter, reaching unprecedented levels of about PRs503 billion by mid-2013.

Project Number: 32146-013
Project Name: Energy Sector Restructuring Program
Report Date:
Lesson
The purpose of program lending—which is to support structural reforms and achieve development results—should not be compromised by balance-of-payments or budget considerations. This would have meant allowing a longer program period for the required depth of reforms. ADB could have envisaged that sector reforms require a longer implementation period and should have focused on a smaller number of specified reform issues.

Project Number: 32058-023
Project Name: Road Sector Development Program (Policy Loan)
Report Date:
Lesson
Assess the country context, notably the political situation, as a potential risk at the project design stage.

Project Number: 32058-033
Project Name: Punjab Road Development Sector Project
Report Date: