PESHAWAR, Nov 3: The Asian Development Bank (ADB) has cancelled a multi-million dollar loan facility extended to the NWFP government for restructuring its technical education system, terming the initiative as a ‘liability’, officials say.

A decision to this effect was recently conveyed to provincial government, paving way for the demise of Restructuring of Technical Education and Vocational Training (TEVT) System Project, launched some three years ago, an official told Dawn.

The ADB decision came as a follow up to the findings of its project review mission, which in April found out that the initiative was a ‘liability’ and immediately suspended all its fresh activities till a final decision about the fate of the project.

A tripartite meeting of the representatives of Economic Affairs Division (EAD), provincial governments and ADB, was convened a few days ago in Islamabad, wherein officials of the bank termed the project as an unrealistic intervention based on a complex design and refused to extend further financing, the official said.

The ADB said that start up delays, complex project design, unrealistic intervention, unfamiliarity with the bank guidelines, weak capacity and lack of knowledge about project management were major reasons behind the closure of the project besides other discrepancies.

The main objectives of the project, launched in Sept 2005, were to restructure and strengthen institutional capacity, efficiency and autonomy of TEVT institutions, improve quality and relevance of those programmes and enhance access to quality of education.

The project carries a total cost of US $15.687 million. As per the loan agreement, ADB was supposed to lend $11 million to finance the project, whereas the NWFP government’s contribution was determined 30 per cent of the total cost or $ 4.687 million.

Till date, according to ADB findings 20 per cent progress have been made within elapsed period of 52 per cent, meaning the project was far away from its targets.

“The ADB review mission had pointed out a number of issues, which led to termination of the loan facility to the cash-strapped NWFP government. The main issue is a difference of $5 million in actual allocation and expenditures, as the project management has spent beyond the available resources,” the official said.

A project steering committee, a supervising body, was supposed to meet once in three months to review the project activities but it never happened, said the ADB findings.

Similarly, it pointed out that the project management spent Rs18 million in May 2008 on different consultancies but the deliverable didn’t have relevancy with the project objectives.

One of the major objections of ADB was study visits to United Kingdom and Philippine, which it said was not part of the loan agreement.

The Project Management Unit (PMU), the main coordinating body for the project, hired the services of a UK-based firm in Feb 2008 for conducting a study visit at a cost of Rs7 million under staff development component of the project.

A seven-member delegation, mostly officers of the Department of Industries (DoI), went to UK to study its ‘technical education system’.

Likewise, another four-member delegation comprising two each teachers and officer from the DoI went to Manila.

The ADB observed that it had agreed to these trips only under the presumption that only teaching and polytechnic staff would be its beneficiaries but the facility was availed by non-technical staff mainly the bigwigs of the DoI.

Also, it said that ADB had agreed to allocate $90,000 on those two trips, whereas actual spending was exceeded by $26,000 for which the PMU should made request to change the budget allocation.

When contacted an official at PMU, wishing anonymity, said that the project had been designed by ADB consultant not the provincial government. “If its design is complex it is ADB’s fault not ours,” he added.

About the $5 million differences in expenditures, the official said it was only because of 70 per cent raise in the official rates of the civil work announced by the NWFP government.

“In the project cost escalation ratio was 15 per cent, whereas the government announced it 70 per cent, causing the difference,” he said.

The official also clarified that all the issues relating to the consultancies and foreign visits had been discussed with ADB prior to implementation, as the PMU could not do anything without the approval of ADB mission in Islamabad.

He, however, admitted that there were discrepancies in loan agreement and PC-I of the project, which could be removed accordingly, adding a committee formed with the consent of ADB mission had termed the project as viable.