ISLAMABAD, Dec 22: The poor security environment prevailing in Khyber Pakhtunkhwa coupled with lack of capacity on the part of the government has led to the failure of Malakand Rural Development Project which was aimed to bring remote and backward areas of Malakand division at par with the rest of the province.

The Asian Development Bank, which provided financing for the project, commented in its project completion report released on Wednesday that poverty was likely to increase in the area because of the recent floods and the ongoing armed conflict between security forces and the Taliban.

The cost of the project was estimated at $62.9 million, of which $15.4 million was in foreign exchange and $47.5 million in local currency. At loan closing, the overall actual utilisation amounted to $42 million. Of this, the ADB provided $25.7 million while government contributed $13.1 million.

The overall goal of the project was to reduce poverty in Malakand division -– comprising four administrative units, Malakand Agency and the districts of Swat, Buner, and Shangla -– by raising per capita income of the beneficiaries to reach or exceed the poverty line. Human resource development for women and improvement of their income-earning potential were specific targets.

At the same time, by helping to create community organisations in the villages, and by providing assistance for their capacity building and training, the project aimed to contribute to institutional reforms for devolution of powers to the local level.

The ADB report says the project failed to achieve its two main outcomes --- to improve the income and living conditions of poor households, and to boost the human resources and income-generating potential of the women in the area.

Insignificant physical progress in the project hardly amounted to an improvement in the living conditions of the households and women. Except for minor achievements in the village development component, the effectiveness of the interventions under the other components was minimal. The project is therefore rated ineffective, points out the report.

Because of continued conflict, no financial or economic analyses could be done, and given the poor performance of the project in its major component of building roads and unsatisfactory performance in other components, and even if the economic and financial internal rates of return were computed, it is unlikely that high economic and financial returns could have been obtained.

The report identified five factors which undermined project implementation. The factors are: lack of coordination between a wide range of line departments; multiple players within and outside the line departments with varied private interests; unavailability and in some cases unwillingness of experienced staff to serve in the remote and difficult project areas; political interference in the selection of staff; undefined authority lines at various implementation agencies resulting in frequent turf battles; and weak accountability mechanism and absence of a fiduciary risk mitigation framework.

A biological laboratory known as “insects zoo” that was established at Matta (Swat district) was completely destroyed during the conflict between security forces and the Taliban. The laboratory provided about 29 million ‘trichogramma parasitoids’ and two million ‘Chrysopa parasitoids’ to interested farmers.

Similarly, a tissue culture laboratory for potato established by the project in Agriculture Research Station, Mingora, was destroyed and all equipment was taken away. Links with the Potato Research Centre, Abbottabad, and the Malakand Fruit and Vegetable Development Project and training of staff at the agricultural extension and fruit and vegetable development board were also not implemented.

According to the report, one of the principal lessons learned from the project is that a detailed and objective analysis of implementation risks should be carried out before a similar complex and ambitious project is prepared, particularly in a country with difficult socioeconomic conditions and generally weak implementation and coordination capacity.However, the report says the project has laid the foundation for further economic and social development in the project area.