ISLAMABAD: The success rate of the Asian Devel­opment Bank’s (ADB) public sector operations declined during 2016–2022, Independent Evaluation Department (IED), ADB’s assessing body revealed on Wednesday.

According to the ‘2023 Annual Evaluation Review’ prepared by IED, and released on Wednesday, the success rate of ADB’s public sector projects shrank primarily among infrastructure projects in the relatively new areas of the transport and energy sectors, however, private sector projects remained stable.

The assessment found, while using a combination of quantitative and qualitative methods, that success relied predominantly on project factors such as complexity, risk, supervision, delegation, financing utilization, and procurement and design readiness. It accounted for nearly three-fourths of the explainable variations in the public sector performance.

The evaluation attributes the remaining variables in the public sector performance to country-specific factors, including governance, political stability, fiscal management, economic performance, and unexpected events.

The sovereign success rate in 2020-2022, averaged 68 per cent, continued the steady decline from 77pc in 2016-2018. Meanwhile, in wake of the annual variation in the number of completed and validated sovereign projects in 2016-2022, overall sovereign project performance declined by 3.2pc annually.

Deteriorating infrastructure performance drove the decline of overall sovereign performance, leading to a drop of 3.9pc annually during 2016–2022.

Similarly, declines in transport and energy projects further abetted slumping infrastructure performance.

Weak management and financial capacities of executing and implementing agencies and broad project scopes were the main constraints to energy projects, according to the IED validations of project completion reports. Inadequate due diligence backed the design deficiencies in poor performance of transport projects.

ADB operations in relatively new areas of activity in transport and energy — such as rail, urban public transport, energy efficiency and conservation, and energy sector development and institutional reforms — also contributed to poor sovereign performance due to inadequate consideration of developing member countries’ limited experience with new technologies, the report said.

Among non-infrastructure operations, public sector management (PSM) saw a considerable decline in South Asia and the Pacific, which were affected by changes in government and development priorities.

In contrast, education and health projects performed better during the period. It was found that government ownership and commitment to education and health reforms enhanced performance in these sectors.

The recent uptick in infrastructure performance from 66pc in 2019–2021 to 68pc in 2020–2022 helped maintain non sovereign operations’ (NSO) stable performance during 2016-2022.

The technical assistance projects that failed to deliver their planned outcomes were generally in public expenditure and financial management, integration of planning and budgeting, and railway development.

Success rates of financial institution projects and the legacy of private equity funds designed years ago continued to lag behind infrastructure projects due to internal challenges and external.

Likewise, financial institution project success dipped from 70pc in 2019–2021 to 50pc in 2020–2022, while no private equity fund was rated successful.

Technical assistance (TA) projects that failed to deliver planned outcomes were generally in public expenditure and financial management, integration of planning and budgeting, and railway development.

The report revealed that TA projects that performed poorly had supported reforms or knowledge products that were spread across too many areas and had vaguely defined performance targets.

Published in Dawn, April 22nd, 2023