The Asian Development Bank will provide an amount of $150,000 to cover small-scale technical assistance (TA) to promote infrastructure investment. The small-scale TA will identify constraints on investment to develop solutions to remove the same.
According to an official source, the total cost of the TA is estimated at $190,000 equivalent, comprising $5,000 in foreign exchange and $185,000 equivalent in local currency. ADB will finance $150,000 equivalent on a grant basis from ADB's TA funding programme to cover the entire foreign exchange and $145,000 equivalent of the local currency cost.
The government will finance the remaining local currency cost amounting to $40,000 for (i) office accommodation and utilities; (ii) counterpart staff support; and (iii) workshop facilitation as needed.
The project study revealed that the Pakistan government has undertaken significant activities to support and promote infrastructure investment. In March 2005, the Planning Commission (PC) released its Medium Term Development Framework (MTDF) for public review with approval expected in June 2005.
The MTDF provides development objectives and a strategic framework for Pakistan from 2005 to 2010, and it addresses infrastructure needs for those sectors to be addressed by the ADB Technical Assistance Loan for Infrastructure Development (the Project); ie power, transport; water resources and irrigation.
The MTDF will provide foundation for the project through its focus on (i) infrastructure needs for the relevant sectors; (ii) legal and regulatory issues; (iii) public private partnerships; and (iv) Macro-economic considerations.
Although the government has made substantial progress in defining needs and developing a plan for sector investments in power, transportation, and water resources, the enabling environment for infrastructure investments for the private sector, multilateral and bilateral development agencies needs strengthening.
Some of the challenges facing infrastructure investment by non public agencies include investor protection, regulatory fairness, consistency, property rights, transparency of sector policy frameworks, strategic direction and sector development, overly bureaucratic regulations and procedures, monetary stability and exchange regulations, and efficient contract enforcement.
To help address these investment constraints faced by private sector and external development assistant, the project includes a component, enabling environment for infrastructure investments, for $1 million to help eliminate infrastructure investment constraints and ameliorate the overall investment climate for energy, transport, and water resources infrastructure. However, assistance is needed to most effectively develop and implement a programme to improve the enabling environment for infrastructure investments.
According to official sources, the main objective of the small-scale technical assistance (TA) to support the project is to assist identification and implementation of interventions to strengthen the enabling environment for infrastructure investment by non-public entities.
The TA will have three components: (i) investigation and diagnostic work for constraints to infrastructure investment; (ii) development of subproject using the $1 million in funds from enabling environment component to address constraints identified; and (iii) assistance in implementation of subprojects and dissemination of their results. The identification and diagnosis of constraints to investment will involve review of literature and current government policies and procedures. This would draw upon previous work-studies by the ADB and other foreign and domestic institutions.
Diagnostic work would also include formal and informal discussions with investment stakeholders to solicit their views. The goal of this TA component is to identify gaps in addressing infrastructure investment constraints and develop a prioritised list of constraints to be addressed.
The types of interventions to be identified would include such activities as policy and legal reforms, improved access to information, sector-specific studies, and capacity development activities.
According to a project study, the specific interventions to be developed under the TA will focus on finding ways to resolve the constraints identified during the diagnostic phase. The interventions will be prioritised, but most likely several interventions will be executed on a parallel basis. The TA will develop terms of reference (TOR) and implementation arrangements for the prioritised list of interventions.
The $1 million in funds allocated to the enabling environment for infrastructure investments component will be used to support the interventions. Wherever possible, co-financing opportunities will be sought with development partners and other interested stakeholders to leverage funds.
It was mentioned that the TA would also provide management oversight to implement the developed interventions. This will include calls for expressions of interest; recruitment of consultants; project management; quality control over outputs; and monitoring and evaluation. An important aspect of this activity will be the wide dissemination of results and support to ensure that intervention outputs results in a meaningful change to the enabling environment for infrastructure investments.
This will include direct dialog with relevant federal and provincial government ministries and agencies, workshops, and distribution of position papers and publications.
Under this programme, two domestic consultants will be recruited for 16 months each over a period of two years for a total of 32 person-months. The consultants will be engaged in accordance with ADB's guidelines on the use of consultants.
Consultants will have expertise in (i) infrastructure investments; (ii) institutional reform; (iii) project management; and (iv) with ADB and government procedures for recruitment and contracting of consultants. In terms of implementation arrangements, the Infrastructure Management Unit (IMU) of the PC, which will be responsible for overall management of the project, will also be responsible for the implementation of the TA.
Staff from the IMU will be assigned to support the TA consultants, and other PC staff will be seconded on an ad hoc basis as needed to assist the TA consultants.
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