WB's $1.6b held up in eight slow moving projects

More than a half of the World Bank's nearly $3 billion fund committed for eight projects, approved between 2013 and 2021, remained undisbursed for delays in approval, hiring of consultants, procurement and inception of work, according to project briefs prepared by the lender.

Disagreement among government agencies on issues such as gas pipeline work, opposition from the private sector bodies like the one the BGMEA had regarding central effluent treatment plant are cited among reasons for the delays, requiring extension of closing dates for funds and risking partial cancellation of the work in some cases.

The project briefs were reviewed at a meeting on Sunday attended by the World Bank, the Economic Relations Division (ERD) and implementing agencies. 

Gayle Martin, operational manager of the World Bank, and Mostafizur Rahman, additional secretary of the ERD, led their respective sides at the tripartite portfolio review meeting, which found that projects in the general infrastructure sector are lagging behind socio-economic projects in terms of utilising the fund.

For instance, the largest of the eight projects is for the safety net for the poor, involving $845 million. It saw the highest disbursement with only $53m left after nine years.

In contrast, the $295 million project for digital governance has $264 million undisbursed even after nearly four years since the project began.

A senior official of the ERD said all projects were discussed thoroughly at the meeting. Implementing agencies explained delays, and the World Bank presented their review.

"Both parties agreed to address implementation issues and will develop new disbursement plans collaboratively within one to two months," said the official.

Economic transformation project

Among the eight slow moving projects, the WB approved a loan of $300 million for "Accelerating and Strengthening Skills for Economic Transformation Project" on 20 May 2021 with the aim to create employment opportunities for 1 million youth. 

However, $272 million, 90.66% of the total loan, has not yet been disbursed.

The WB report cites staffing and technical capacity constraints as the main reasons behind the funding freeze. Besides, macroeconomic pressure on domestic reserves is delaying the project.

The lender said the project requires committed leadership, strong oversight and coordination of project activities at all levels.

Project Director Abu Momtaz Saaduddin Ahmed said the work has been delayed due to a software issue. A new alternative method has been adopted to resolve the matter.

"Besides, the government was supposed to provide 35% of funding, with the World Bank covering the remaining 65%, including trainer costs. However, due to the World Bank's policy constraints, this arrangement needs reorganisation,"he explained.  

He said significant fund disbursement is expected in the project within the next three to six months.

Digital entrepreneurship project

Another one, "Private Investment and Digital Entrepreneurship Project", received approval on 19 June 2020 with $500 million committed from the WB.

However, only $429 million (85.8%) of the project has not yet been released due the slow implementation. 

The project's objective is to promote and attract about $2 billion direct private investments and strengthen social and environmental standards in selected public and private economic zones and software technology parks.

According to the World Bank, the project took 13 months after approval to start implemented work. Later, there was a delay in the appointment of consultants, preparation of designs, preparation of tender documents.

Project Director Abdullah Al Mahmud Faruk said it took a lot of time to do the paperwork before starting the implementation and there were challenges in hiring staff for procurement. 

"The World Bank thoroughly examines various documents, including resilience measures. This resulted in a delay of 1.5 years. Besides, there were issues with delegation work, leading to objections from the World Bank and a further delay of one year," he added.

"Another session will convene with the World Bank in April to formulate an action plan for expediting the project," he added.

Higher education acceleration 

The disbursement situation is the most dire for the "Higher Education Acceleration and Transformation Project". The entire $191 million committed for the project remains undisbursed.

The WB approved the project on 24 June 2021, aimed at regional cooperation involving Bangladesh and Afghanistan. It involves collaboration in higher education, including student mobility through equivalence programmes, credit transfer schemes, and university twinning. 

The project took Bangladesh two years to approve after the lender's approval for funds. Besides, there was a delay in appointment of a full time project director and other project staff. 

Modern food storage 

Another slow moving project, "Modern Food Storage Facilities Project," has  a loan commitment of $412 million. Its objective is to increase the grain reserve available to households to meet their post-disaster needs and improve the efficiency of grain storage management. 

The project approved in 2013 has $138.76 million undisbursed.

The WB said implementation has been delayed due to prolonged procurement processes for large-scale infrastructure development contracts. Also, poor performance and contractor financial constraints have delayed construction of silos.

Md Rezaul Karim Sheikh, project director, said they are planning to complete the whole work by December. 

"Supervision will be enforced to implement the decision. Besides, the World Bank will also supervise the implementation with its technical team," he added.

Supporting rural bridges

The WB in 2018 sanctioned $340 million for the project, "Operation for Supporting Rural Bridges".  It aims at improving and preserving rural bridges to support connectivity and climate resiliency, and strengthen institutional management. 

However, $202 million (59%) fund remains undisbursed. 

According to the development partner, the first two years of the Covid pandemic delayed the preparation of the project. Besides, there were deficiencies in performance of the appointed bridge design consultant.

The project has also been affected by the increase in the cost of construction materials due to the shortage of materials. Again there was the problem of land acquisition for bridge replacement.