ADB to review projects funded during former regime

by Lalin Fernandopulle

The Asian Development Bank (ADB) will review all ADB funded projects launched during the former regime, ADB President Takehiko Nakao said. The former regime came under severe criticism for misuse of funds obtained for road and highway development projects. The Rajapaksa regime was accused of allegedly spending colossal amounts on each kilometre of the 126-kilometre Southern Expressway running from Colombo to Matara.

The ADB funded a section of the expressway while the rest was funded by the Japan Bank for International Cooperation (JBIC) and the government.

ADB Country Director Sri Widowati said the ADB prepared a Project Completion Report for the project finance of the Southern Expressway and added that contractors are selected through competitive bidding in accordance with ADB procurement guidelines to ensure the proper use of loans. She said the ADB reviews the process and once contractors are decided, the payment is done in accordance with the contract which is also reviewed by the ADB.

The project finance accounts of each project is subject to annual audit by the Auditor General who provides reports to the authority and the ADB. Moreover, the ADB regularly conducts review missions which may include site visits, and the ADB has the right to access project accounts.

The ADB chief said the Bank hopes to scale up operations in Sri Lanka with over US$2 billion in loans and equity in 2016 to 2018 compared with $1.5 billion in the preceding three years.

“I look forward to working with the government in elaborating and implementing its development vision and strategy through increased ADB support. The ADB is re-orienting its operations to meet the evolving needs of Sri Lanka as it moves to become an upper-middle-income country in the next few years,” he said.

Nakao praised the government’s emphasis on good governance, inclusive growth, and private sector development. With a wealth of cultural heritage and rich natural and human resources, Sri Lanka has a lot of potential, he said.

He stressed the importance of prudent macroeconomic management, especially fiscal consolidation measures, for the economy to grow at 6% or above per annum during 2016-2017. Both tax revenue enhancement and effective management of public expenditure are urgent tasks for the government. Nakao expressed his support for the government’s public finance management reform initiative, which will boost the credibility of the Budget framework and improve controls and transparency in Budget execution.

Until recently, the ADB had focused on improving basic infrastructure, such as national and provincial roads, electricity transmission lines, and urban and rural water supplies. In the next three years, ADB assistance will be further expanded to support higher-quality transformative infrastructure, including expressways, railway upgrades, wind power generation and building economic corridors to accelerate industrialisation.

Nakao said apart from infrastructure, human resource development would remain a key focus of ADB operations in Sri Lanka.