ADP spending in slow lane

The government's spending on its annual development programme dropped 5 percentage points year-on-year during July-January of the current fiscal year mainly due to political unrest.
Low utilisation of the fund earmarked for the Padma bridge project also caused a decline in such expenditure.
In this backdrop, the Finance Division has advised the planning ministry to bring down the size of the ADP by 18 percent.
Various ministries and divisions spent Tk 21,857 crore during the seven months, the amount being 33 percent of the total allocation at Tk 65,872 crore, according to the Implementation Monitoring and Evaluation Division (IMED).
However, during the same period in the previous fiscal year, 38 percent of the total allocation was spent.
Though ministries and divisions often blame their poor ADP performance on a slow disbursement of donors' funds, this time they are lagging much behind in using the government's money.
During the period, they spent only 35 percent of the government's resources though the amount was 42 percent in the same period a year ago. On the other hand, utilisation of foreign funds was 31 percent, against 32 percent in the same period last year.
The worst performer this year was the Bridges Division, which got the third highest or 9 percent of the total allocation among 10 big ministries and divisions.
But in the first seven months, the Bridges Division spent only 4 percent or Tk 260 crore against a total allocation of Tk 6,888 crore.
Almost the entire allocation, Tk 6,852 crore, was for the Padma bridge project.
A planning ministry official said the Finance Division has now proposed allocating Tk 1,500 crore for the project in the revised budget.
But the Bridges Division did not agree with the proposal, saying some payments would have to be made in advance to the contractor if the contract for the main bridge is finalised by June, according to the official.
Other poor performers are the Power Division, housing and public works ministry, Energy and Mineral Resources Division and the education ministry.
The IMED has identified seven reasons behind the low utilisation of the ADP funds. These include political unrest, delay in land acquisition, absence of procurement plans, delay in bid invitation, and a lack of training of project officials on procurement guidelines of the donors.

The IMED also said the government usually pays contractors in May and June and so the rate of project implementation gets a boost at that time.
More funds will be needed in the revenue budget this fiscal year as the government employees will get 20 percent dearness allowance, which has also slowed down the ADP utilisation.
In this context, the Finance Division has proposed to cut the ADP size by Tk 11,872 crore and set the revised outlay at around Tk 54,000 crore, the planning ministry official said.
However, all the ministries are against bringing down their allocation, instead they want more funds, the official said.