KENICHI YOKOYAMA, country director of Asian Development Bank, recently visited project sites in Solu and Okhaldhunga. During the visit, the country director spoke to New Spotlight on ADB’s projects. Excerpts:

Given Nepal’s prolonged political instability, how do you view the performance of the projects run with the support of Asian Development Bank?

Over the past several years, our development projects have brought very good results. Despite facing a number of issues in implementation, our projects are going in the right direction for the long term.

What about the short term?

In the short term, we are apparently facing quite big challenges because of the political stalemate. At present, all our projects are virtually stopped, except for some rural infrastructure projects in the remote areas. All the major projects, flagship projects like Melamchi, Tribhuwan International Airport, Lumbini Airport and strategic roads and middle highways are completely stalled. In this scenario, we will have to see what the short term implications for economic growth prospects are -- they are not so much good. Hopefully, the present scenario will improve in the next one or two months and Nepal’s economy will bounce back stronger.

As the country director of ADB, coming to see the projects and meeting the local people, what picture do you see?

The strategic road projects, the rural infrastructures and irrigation projects are definitely making changes. Improvement of Hallery-Okhaldhunga Road projects has drastically reduced the travel time as one can reach Kathmandu from Salleri in seven-eight hours. Similarly, Okhaldhunga-Salleri road has reduced the travel time to Kathmandu and rest of Nepal. It is a major change.

We saw some projects with reasonable quality standards met here. Local leaders and community people who came to discuss with us about them are quite satisfied and happy to see the projects coming to fruition.

As the strategic road projects of Okhaldhhuga and Salleri come to an end, how much are you worried about their maintenance?

Road maintenance in Nepal is a big challenge. The government has already established a road board and already strengthened the inventory and monitoring system and then maintenance planning system.  So far as my information is concerned, the government is not providing the sufficient budget for road maintenance. One of the issue in the dialogue between the government and Asian Development Bank is now to build the system for road maintenance so that these kinds of roads can be well maintained.

It is reported that due to the procurement act, Nepal’s development projects are suffering. How do you look at this?

Maintaining good governance in contract management is one of the challenges in Nepal’s development. In Holeri-Okhaldhunga and Okhaldhunga-Salleri projects, we have international design supervision consultants, who made a good scrutiny in the contractor’s performance. This system was very effective but we also faced a lot of challenges. We need to work together with the government by strengthening the contract management system.

Having spent almost four years as the country director of ADB, visiting various development sites and meeting people, what do you suggest for Nepal to make more progress?

Development in this kind of topography and environment is always challenging as you see the country struggling for finalizing the political transition and the recent issue of Terai-Madhesh. Despite all these things, the country has made a tremendous progress and the country cannot wait for the development to happen after the long term political solution. This kind of development like road construction and irrigation also need to go hand in hand. Situation is challenging but we want to make progress in this challenge.

How do you see the implication of two road projects built with the loan assistance of ADB?

You can see a lot of transformation. The blacktopped roads have reduced the time for journey and reduced the prices of essential commodities. The roads also help sell the local products to broader markets and farmers will benefit a lot if they produce the commodities looking at the market demand.

How is potential going to be utilized then?

Local people are still living in a challenging environment and how to utilize this potential to make a real changes is a big challenge. Investment in agriculture value change and small and medium scale enterprises can start to make changes.

As a major development partner, what constraints do you see in the implementation of the development projects in Nepal?

Given the present situation, the capital investment or investment in infrastructure is too low. There is the need to accelerate the investment in infrastructure so that Nepal’s GDP can grow. Last year the growth rate was 4 percent and this year it will likely be 3 or less than 3 percent given the present condition. It is a matter of implementation capacity constraints -- the country does not have sectors ready for investment. The procurement process is too complicated and time consuming and the recent issue with Nepal Electricity Authority (NEA). Once the contract is signed there is a lot of space for irregularities in the contract management as advance payment is paid and contractor does not get mobilized. Implementation part has also a lot of problems in terms of quality and timeliness. Those are critical challenges and we are trying to help them to accelerate the work. We are promoting the site management contracts and the contractors can perform well.

In that sense, infrastructure development is a big constraint for growth. There are also constraints in human capital as well. Government and politicians need to be able to sustain the success achieved in MDGs particularly school enrolment. It is only in half way and there is the need to start to increase the present rate. The present state is only 14 percent of the aged group students getting secondary education, SLC certificate is a big concern. Nepal still needs to do a lot for human capital development.

As you have been saying all the time that the government shouldhelp improve the project time and performance, what impacts do you see from your advice?

It is not correct to say that the government is doing nothing. There is at least a lot of willingness on the part of high level politicians and bureaucrats to improve the situation. We are looking for their good willingness in real action. Minister of Energy has already made it clear that the government is ready to implement the project. However, NEA is not advancing the procurement process for a long time. In procurement cases, individual staffs are not much concerned on high level commitment looking at possibility of CIAA’s inquiry in such procurement and trouble in future.

After a long gap, Nepal finallyhas constituted the Reconstruction Authority, how do you look at this?

Although Nepal has lost too much time, it is a right step taken by the government. We hope that the government is waiting for action. It remains to be seen how effectively the authority works to implement the projects.