Asian Development Bank (ADB) has observed that the technical assistance (TA) for "Institutional Capacity Building of the National Transmission and Despatch Company Limited (NTDC)" was "highly relevant" as it fully supported ADB's energy policy objectives and the congruent GOP policy to establish an efficient electricity market and with increased private sector participation.
According to project completion report, released by Principal Energy Specialist, CWID of ADB, the TA was rated "effective" because it achieved all its intended outcomes and provided the capacity for NTDC to develop the next stages for the eventual transition to a full market. Departments within NTDC have been provided skills that were not present in the past. NTDC hired external directors for the finance department, the legal department, and the Information Technology department.
The new directors worked well with the consultants, and supplemented each other in delivering the outcomes as well as ensuring that the outcomes would be sustainable over time. The quality of the outputs ranged from satisfactory to highly satisfactory, but may have been too sophisticated in some areas due to the limited exposure of NTDC staff to corporate business processes and procedures. NTDC was pleased with the output, but sought further input from consultants, as they are keen on additional capacity building in most areas of their operations.
The efficiency in the production of outputs was rated "satisfactory", as the training matched the skill requirements and progressed to match the EA's capacity as it was developed. The timeliness of delivery of most outputs was satisfactory. The level and the timing of the training was part of the expected seven year long process to establish the market.
However, the intention of supporting the establishment of a single buyer model, as outlined in the approved TA, by July 2004, was not met, likely due to the overoptimistic aspirations which have been common to all ADB funded electricity reform initiatives.
Delays were caused by the need to consult with, and obtain concurrence of, multiple government agencies, the need to replace a legal expert in the consulting firm, and in the delivery of the final consultants' report.
Specific credit should be given to the consultants for their focus on the sustainability of the capacity building as a number of documents were developed and delivered that can and should be utilised when new staff are assigned into any of the five areas.
The development of the roadmap for the single buyer model (CPPA) is currently being implemented under another TA, and the GOP continues to support measures, which move the electricity industry towards full competition. The outputs are therefore rated "highly sustainable".
Commenting over the "Overall Assessment and Rating of the Project", Rune Stroem, Principal Energy Specialist, CWID stated that based on the criteria of relevance, effectiveness, efficiency and sustainability, the overall assessment of this TA is rated "satisfactory". In terms of institutional capacity building TAs to reach their full potential, the field time of the consultants should be maximised and only a limited home office time could be provided, if any at all.
Future similar TA should take into account the complexities of gaining approval of several government agencies for the design of appropriate market structures and the resistance to the accompanying organisational changes and make appropriate allowances for the time needed.
The TA was executed by Economic Consulting Associates (ECA), United Kingdom and the work was divided into five principal areas, namely (i) power trading, (ii) financial and accounting, (iii) power transmission and dispatch, (iv) Information Technology, and (v) legal issues. The segmentation of the areas provided in-depth focus and detailed attention within each area previously not seen within NTDC.
The capacity building support was delivered through numerous discussions, face-to-face meetings with key people at various levels of the organisation, 23 workshops, and production/delivery of 46 papers such as working papers, briefing papers, notes, and draft legal documents/agreements. A simulation model of the proposed balancing of the power market was developed and provided to NTDC with user documentation. Overall the performance of the consultants was rated "satisfactory".
The relative costs of input items are found to be satisfactory. There was a high productivity of the inputs, especially when the consultants were in the field. The challenge is to ensure continued focus on the capacity building during time periods when the consultants are not present in the field. The quality of the inputs was satisfactory.
The client, NTDC, has expressed satisfaction with the capacity building inputs, but all parties realised that this is just a beginning and not the end of the process. Capacity building is a continuous process and more is required. But a good beginning provides the basis to a further efficient capacity building. From ADB's side it was noticeable that NTDC became more demanding of the consultants as the TA progressed. This is a good sign as it shows commitment and ownership of the process, he added.
In terms of the executing agency, Rune Stroem mentioned that the performance was satisfactory. However, the required decisions related to the power market operations did not materialise in order for the TA to reach its potential. Some market operations could have been implemented during the TA if important policy decisions have been taken by the government, but it required additional time to review and study the options available and decide on an organisational structure that would be implemented. The EA and the government have both been very enthusiastic about the power market operations, which was communicated through meetings and requirements for further information. Although the majority of the deliverables of the TA were completed late 2004/early 2005, the legal related TA work was not completed until June 2006, after a specialist was replaced, he disclosed.
Principal energy specialist, CWID mentioned that review missions identified some of the causes of delays in the implementation and assisted resolving some of the issues relating to the decisions for the development of a roadmap for the single buyer model.
The main objective of the TA was to undertake institutional capacity building of NTDC with the intent of preparing NTDC to professionally manage the power transmission, dispatch, and trading activities stipulated in its license.
This institutional capacity building would develop and implement more efficient and effective information gathering, planning, and operating procedures for the transmission system operations, and the market operations of NTDC, resulting in a more efficient and transparent power sector. The output of the TA will be the (i) establishment of NTDC's business functions as per its license, as well as financial and technical segregation of said functions, (ii) ensure that institutional frameworks for the design and planning business segments are introduced, and (iii) development of an integrated training programme for each business function.
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