Subject:- LOAN 2134-PAK (SF): SUSTAINABLE LIVELIHOOD IN BARANI

AREAS PROJECT – MOU OF ADB MID TERM LOAN REVIEW

MISSION (24 NOVEMBER – 6 DECEMBER 2008)

This PUC is received from ECA Section of P&D Department. It is desired

to submit comment on it as Chairman, P&D Board has to sign MOU with ADB on this
project. It is 14 page document alongwith 15 appendixes. It is desired by ADB to sign the
document and have occurrence by EAD. After that ADB will be considered formal
approval of the proposed changing incorporated in the document.
MOU has been framed in consultation with P&D Department. In this
regard, meeting was held in P&D Department on 6th December, 2008 in which certain
changing were agreed on assessment of implementation progress, proposed revised project
design and cost changes and list of action to improve project performance. Issues relating
to posting or project staff, project design complications and certain issues due to which
project is feared in the category of ‘At Risk’.
Key reasons for slow implementation of progress include:-
i. Delay in approval of projects caused by temporary freeze by GoPunjab on
approval of projects before February 2008 elections to avoid political use of
public sector funds.
ii. Delay in preparation of feasibility studies and PC-I due to lack of capacity
of district line agencies.
iii. Delay in release of funds for on-going projects because of reluctance of
staff due to changes introduced by the new regime including transfers of
staff of district government and the agencies followed by subsequent audit
of Tehsil Municipal Administration (TMA) and district governments.
iv. Delay in completion of civil works contracts due to revision of contracts
because of high inflation and increase in cost of construction materials,
ranging between 15% - 26%.
v. Inability of communities to share schemes cost and provides labour.
vi. Problems in release of funds by district line agencies to community
organizations (COs) for civil works contracts due to lack of district line
agencies’ confidence in COs’ financial management capacity.
vii. Lack of interest of line agencies in the Project due to their engagement with
other high-priority projects such as President Program for Improvement of
Water Courses.
viii. Above all frequent transfer of key management staff of PMU, mainly the
Project Director and Deputy Project Director.
 It is recommended that project design be simplified and number of sectors
in the project to be reduced. Following is the summary of the component wise estimate
progress has assessed by ADB It is pointed out that due to 44 covenants only 19 were
complied with, 12 were ongoing, 2 were not yet due and 2 were not complied. Mission has
advised EA to ensure full compliance.
It is also stated in the document that GoPunjab agreed with
i. Action plan provided in Appendix 3.
ii. Proposed key changes in Project scope and implementation arrangements
proposed in Section III E of the MOU.
iii. Revised quantities and costs proposed in Appendix 2.
iv. Reallocation of loan proceeds among the Project components proposed in
Appendix 14.

As a loan document is in accordance with the discussion held with

Chairman, P&D Board including PMU and Finance Department so Chairman, P&D may
consider to sign this document. However, detailed working on this document was carried
out by ADB and PMU staff of SLBAP so document may be forwarded to Chairman.
Chairman may .consider to sign the document after receipt of comment from Project
Director, SLBAP. Project Director, SLBAP has been requested on telephone to submit his
comments at the earliest but these are still awaited.

(MUHAMMAD ASLAM CH.)

CHIEF (RP)
17.03.2009

SECRETARY, P&D
Subject:- SUSTAINABLE LIVELIHOODS IN BARANI AREAS PROJECT –
10TH QUARTERLY PROGRESS REPORT FOR THE PERIOD
FROM OCTOBER TO DECEMBER, 2008

Kindly peruse your note in the margin of PUC dated March, 30th 2009.
Comments on this report are as under:-
This Quarterly Progress Report is submitted after a lapse of almost one
quarter. Decimal performance of the project in terms of financial and physical achievement
is main feature of this report. Summary position regarding major target and achievement is
as under:-
NRSP
Table 4 page 19 indicates that NRSP has achieved most of its targets. Its
performance for SSIs completed is only 46% and small scale infrastructure
ongoing is 16%. Activities from all activities presented from Senior No.1 to
6 were supposed to be translated in the formation of SSI schemes, but the
same is quite discouraging.
PRSP
Performance of PRSP is quite unsatisfactory. Only 31% SSIs were
completed and 14% were ongoing.
TPAC
Table 6 of the report presents this position. Even only in one case, “loan
approved and disbursed”, 53% targets were achieved. For other activities
24% target was achieved for Fund/Account Managing Training (FAMK)
26% for SSI and Community Management Skills Training (CMST) 26%
and 28% for Managers Workshops.
Financial utilization
Overall progress of the project in financial utilization was 23% and physical
progress was discouraging and the problems highlighted include that both
the Project Director and Deputy Project Director were transferred.

I have discussed this issue with Project Director. He has intimated that there
was an overall improvement as MOU with the ADB has been finalized. PC-I being revised
and ADB representative are expected to meet Secretary, P&D Department on 10th April,
 2009. Until and unless experience persons having proper skill in dealing
with this business are not posted in Project, fate of the project will remain the same. Only
wishful thinking may not resolve the issue. It is thus suggested that at least one
experienced Deputy Project Director having adequate skill in planning and financial
matters should be posted to save this project. Otherwise fate of this project will not
improve.
Matter is being submitted for perusal and consideration as desired by
Secretary, P&D Department.

(MUHAMMAD ASLAM CH.)

CHIEF (RP)
04.04.2009

SECRETARY, P&D
Subject:- MINUTES OF THE PDWP MEETING HELD ON 08.08.2009
(REGIONAL PLANNING SECTOR)

PUC at page 52/C has been received from Assistant Chief (Coord-II), P&D
Department, Lahore.
It is submitted that there were typing errors in the minutes. Therefore,
amended minutes are placed on board for approval.
Submitted please.

(CH. IFTIKHAR AHMAD)

Admin Officer (RP)

Chief (Regional Planning)

The minutes were issued vide PUC. There are some typos in issued minutes
(marked by lead pencil).
May approve the amended minutes of 3rd PDWP held under the
chairmanship of Secretary, P&D on 08.08.2009.

(Dr. Mahmood Khalid Qamar)

Chief (Regional Planning)
20.08.2009

SECRETARY, P&D
Subject:- PURCHASE OF PROJECT VEHICLES SUSTAINABLE
LIVELIHOODS IN BARANI AREAS PROJECT

Project Director, SLBAP has submitted a draft summary for Chief Minister
Punjab for approval of purchase of project vehicles for implementation of the project. The
summary is supported with the necessary documents of recommendations of ADB Review
Mission, minutes of PDWP meeting, recommendations of Project Steering Committee and
notification of ban on purchase of vehicles under austerity measures requiring relaxation.
Draft summary is submitted for further necessary action.

(Dr. Mahmood Khalid Qamar)

Chief (Regional Planning)
30.10.2009

SECRETARY, P&D
Subject:- ANTICIPATORY APPROVAL FOR SUSTAINABLE
LIVELIHOODS IN BARANI AREAS PROJECT (SLBAP)

The revised version of Sustainable Livelihoods in Barani Areas Project

(SLBAP) was approved by CDWP held on 19.11.2009 for the cost of Rs. 4002.90
million (copy of minutes at Annex-A). Pending approval of ECNEC the Project
Director, SLBAP has now requested for an Anticipatory Approval of the project from
ECNEC.
A draft letter for Joint Secretary (Cabinet Committees), Govt. of Pakistan,
Cabinet Division, Cabinet Secretariat, Islamabad has accordingly been prepared
alongwith proforma for seeking the Anticipatory Approval of ECNEC and is placed
below for signature of Chairman, P&D Board.
Submitted please.

(Dr. Mahmood Khalid Qamar)

Chief (Regional Planning)
11.12.2009

SECRETARY, P&D

CHAIRMAN, P&D BOARD

JUSTIFICATION FOR INCREASE IN COST OF REVISED SCHEMES FOR
SUSTAINABLE LIVELIHOOD BARANI AREA DEVELOPMENT PROJECT
BEING CONSIDERED AT ECNEC ON 21.01.2010

A. COST

• Original Cost 3.516

• Revised Cost 4.002
• Difference 0.486
• Percentage (%) 14%

B. SCOPE

Description Original Revised Differenc Percentage

Scope Scope e (%)
Small Scale Interventions 2266 3034 768 34%
Unit Cost of Small Scale Interventions 144668 250000 105332 72%
Unit Cost of Medium Scale 4.5 7.8 3.3 73%
Interventions