Bangladesh News

The government has implemented only 21 percent of the Annual Development Programme (ADP) in the first half of the current fiscal year and power division, a top priority in the development budget, spent only 18 percent of its allocation.

According to a planning ministry review, the ADP implementation rate in the last six months has dived to a four-year low.

Twenty-five percent of the ADP was spent in the first half of FY07, while it was 27 in FY06 and 29 percent in FY05.

The planning ministry report identifies a number of reasons for slow implementation that included inadequate knowledge of the government officials concerned and poor application of the public procurement regulations, and jumps in prices of construction materials.

The report will be placed at a meeting of the Executive Committee of the National Economic Council (Ecnec) today.

The original size of ADP for FY08 was Tk 26,500 crore while spending in July-December period was Tk 5,493 crore.

During the same period Tk 3,340 crore or 20 percent of the ADP’s local component was spent, while it was Tk 2,156 crore or 22 percent in case of the foreign component that comes in the form of project aid.

In the budget for FY08, power division got the second largest allocation after local government division. “In the first half, it has spent only Tk 674 crore meaning 18 percent of Tk 3,778 crore it was allocated in total,” said ministry sources.

“It’s frustrating that the power division couldn’t spend the money when the country has been suffering an acute crisis of electricity and things will worsen even further in summer,” said a planning ministry official requesting not to be named.

The report says delay in tender process and refusal by the contractors to start work for price hike of materials were the major reasons for sluggish implementation of power projects.

Of 45 ministries and divisions, 10 take up 81 percent of the total ADP allocation in FY08. They are local government, and power divisions, communications, health and family planning, primary and mass education, education, water resources, agriculture, energy and mineral resources, and post and telecommunications ministries.

Of them, primary and mass education, and agriculture ministries have used 33 percent of their allocation in the first six months.

Rest of the eight ministries and divisions could spend between 7 percent and 28 percent of their annual development budget.

Most of the ministries do not have expertise in spending the money in line with the Public Procurement Regulations-2003, the report said adding that in some cases ministry officials were fearful of spending the money.

To speed-up ADP implementation, the planning ministry suggested special training for at least four to seven officials from each ministry and division so they could gain expertise in the procurement rules.

The report said some projects need approval from development partners contributing to slower spending of donor component in the ADP.

It suggested that the government set up a committee headed by secretary of the Economic Relations Division to draw up a list of problems that the ministries face in spending donor aid.

The committee will also put forward the list to the Economic Affairs Committee for guidelines.

“In some projects, contractors are reluctant to begin the work as the prices of construction materials have shot up in the last few months leading to a wide discrepancy between the current prices and those quoted,” the report reads.

The ADP review report recommends increasing the project expenditure in the event of a big difference between the quoted price and present market price.