STRATEGY 2020 MIDTERM REVIEW REFORMS INFORMATION FOR EXECUTING AGENCIES

Transcription

1 STRATEGY 2020 MIDTERM REVIEW REFORMS INFORMATION FOR EXECUTING AGENCIES

2 The Asian Development Bank (ADB) completed a midterm review (MTR) of its Strategy 2020 in April An MTR Action Plan is being implemented to improve ADB operations on the ground, build skills, and provide better service to client countries by rebalancing and sharpening ADB operations, and increasing ADB s capacity, efficiency, and effectiveness. The reforms will make ADB a bigger, better, and stronger development partner. Some core reforms have critical implications for the way ADB works with developing member countries. They will make ADB more responsive to client needs, reduce internal bottlenecks and turnaround times, and help leverage more resources and knowledge.

3 WHAT ARE THE CORE REFORMS THAT HAVE IMPLICATIONS FOR EXECUTING AGENCIES? IMPROVING IMPLEMENTATION Key reforms under way focus on improving project readiness, procurement processes, and project management. These reforms are already having positive effects.

4 PROJECT READINESS. Better project readiness will improve implementation schedules. This requires early preparation of technical or engineering designs and the launch of the procurement process before approving the finance. ADB is exploring the use of project design advances, multitranche financing facilities, technical assistance, and other means to enhance readiness. ADB has introduced targets mostly related to procurement in this area, and will monitor them carefully. Procurement Reform Action Plan The 10-point plan comprises the following reforms: More robust procurement risk assessments of country, sector, and agency systems are being undertaken to determine risk-based procurement supervision or prior review thresholds, as well as capacity to take on greater delegation of procurement responsibility. International competitive bidding thresholds have been increased based on market review. Below these thresholds, national competitive bidding will be applied where essentially country systems are used leading to shorter procurement times. ADB will engage with authorities on the optimal setting of procurement methods using the new thresholds. New risk-based prior review limits have been introduced for contracts. ADB will focus its application of prior review on higher risk procurement. Postreview and postreview (sampling) will apply to lower risk procurement, and reduce time and administrative burden. The Procurement Committee threshold has been increased from $10 million to $40 million, and differentiated approaches have been introduced for procurement decisions below the threshold to decentralize procurement decisions. Regional departments, with the endorsement of ADB s specialized Operations Services and Financial Management Department, will decide for contracts between $20 million and $40 million. Regional departments, with the endorsement of a qualified staff (who is accredited under the Procurement Accreditation Skills Scheme), will decide for contracts up to $20 million. The executing agency can decide for contracts up to $5 million, where ADB postreview (sampling) is applied.

5 PROCUREMENT PROCESSES. A 10-point procurement reform action plan is being implemented to improve ADB s procurement performance by reducing procurement time, increasing administrative efficiency, and improving project delivery while maintaining sound fiduciary oversight (see box). The reforms introduce a new risk-based approach to procurement governance under the existing ADB guidelines. PROJECT MANAGEMENT. Postprocurement work, including contract variations, can be significant and is integral to improved project implementation. ADB is delegating greater responsibility to the resident missions (RMs) and equipping them with capacity and technology to deal with project-related issues on the spot Projects are classified by procurement risks and complexity at concept clearance, and specialized procurement support is provided for high risk and complex projects during processing. This will lead to better prepared procurement plans and enhanced readiness of executing agencies. An end-to-end Procurement Review System is being developed to facilitate better planning and tracking of procurement processes. Procurement standard times have been reduced, and the Procurement Review System will allow monitoring of procurement times and introduce accountability. ADB will encourage master bid documents to be agreed during project preparation, rather than implementation. Project readiness will be enhanced if these documents are agreed by loan negotiation stage at the latest. In addition, regional departments (rather than the Operations Services and Financial Management Department) will review bid documents that follow the standard templates, which will save time. New streamlined Procurement Committee processes have been implemented, including strict timelines and concurrent review. A standard timeline of 10 days has been set. This already cut the turnaround time from receipt of a borrower s recommendation to its approval by more than half. A new simpler procurement approval form has been introduced, with an electronic template. This will standardize procurement review across ADB and reduce paperwork. Consulting services quality enhancements and delegation are under way. Quality enhancements include increased use of 90:10 quality to cost based evaluation, and enhanced delegation of authority (where possible) to regional departments for loan consulting services up to $5 million. Source: ADB Annual Portfolio Performance Review. Manila.

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7 EMPOWERING RESIDENT MISSIONS The delegation of authority to ADB s RMs is one of the most important reforms for executing agencies. The goal is to ensure that more procurement and project management work is done on the ground and done more efficiently. The process will vary by RM size. Large RMs. In ADB s six largest RMs in Bangladesh, People s Republic of China, India, Indonesia, Pakistan, and Viet Nam a strong country-based project administration unit structure is already in place. Procurement decisions have been largely transferred to country directors who are supported by staff qualified to handle procurement issues. Some ADB departments are delegating by sectors and in phases; in others the entire portfolio or a large portion of the portfolio has already been delegated to the RMs. Medium RMs. Several medium-sized offices are now managing a significant part of the country portfolio. In RMs with capacity limitations, the delegation is starting more slowly. A major consideration is the experience and number of RM staff. Where capacity is an issue, departments are exploring the use of hubs and subhubs. Small RMs. The majority of small RMs do not have enough staff to deal with portfolio management. As a first measure, procurement specialists are being assigned to relevant departments. This will facilitate procurement decision making, with this specialist working alongside Project Administration Units. Some departments with small offices are also considering the use of subhubs. HUMAN RESOURCES. Reforms related to human resources will also support the delegation process. ADB is now conducting a workforce deployment analysis that will provide information to correct staffing imbalances and strengthen overburdened teams. Ongoing human resource efforts to enhance RM capacity include assigning additional staff to RMs; converting international staff positions into multiple national staff, or locally hired, positions; rotation of national staff between RMs to gain experience and share knowledge; and giving national staff greater decision-making responsibilities to improve project management.

8 ENHANCING INFORMATION TECHNOLOGY The MTR includes several information technology priority programs to improve ADB s efficiency in dealing with executing agencies.

9 Client Portals for Disbursement. These will help executing agencies submit withdrawal applications quickly, and cut ADB s turnaround time. The first generation of portals will be introduced toward the end of Increased Bandwidth. Internet and intranet bandwidth is being expanded at RMs. This will support their increased project management responsibilities.

10 WHAT ARE THE OTHER REFORMS THAT WILL CHANGE THE WAY ADB WORKS WITH DEVELOPING MEMBER COUNTRIES? MOBILIZING RESOURCES ADB is combining its Asian Development Fund and ordinary capital resources to expand lending capacity significantly from Expanded lending will focus on poorer members. Departments are now working to develop stronger project pipelines. ADDITIONAL REFORMS Various other reforms are under way and will improve the way we interact with clients. Private Sector. The MTR includes actions to enhance private sector operations. Two reforms stand out: the introduction of economic capital planning which will enhance flexibility under a risk-based approach, and the establishment of a small-scale transaction facility which will improve operational efficiency. Knowledge Changes. Thematic and sectoral practice groups will spearhead ADB s knowledge work. Among their key mandates is to focus on increasing partnerships with expert agencies, private sector, and civil society groups. Public Private Partnerships. A centralized Office of Public Private Partnerships has been established. Its mandate includes coordinating public private partnership efforts across ADB and undertaking transaction advisory services. Business Processes. Streamlining of internal processes to improve operational efficiency is under way. This will shorten timelines and simplify documentation for country programming and project documents.

11 Resources: Read more about the Midterm Review of Strategy 2020: For more details contact the office of ADB s managing director general: Tel: bbuensuceso@adb.org

12 About the Asian Development Bank ADB s vision is an Asia and Pacific region free of poverty. Its mission is to help its developing member countries reduce poverty and improve the quality of life of their people. Despite the region s many successes, it remains home to the majority of the world s poor. ADB is committed to reducing poverty through inclusive economic growth, environmentally sustainable growth, and regional integration. Based in Manila, ADB is owned by 67 members, including 48 from the region. Its main instruments for helping its developing member countries are policy dialogue, loans, equity investments, guarantees, grants, and technical assistance. Creative Commons Attribution 3.0 IGO license (CC BY 3.0 IGO) 2015 ADB. The CC license does not apply to non-adb copyright materials in this publication. Publication Stock No. ARM Printed on recycled paper