outcomes relative to other sectors for both ADF- and OCR-funded projects. By the 1990s, project success rates were only 52% across funding sources. For ADF-funded projects, the success rate slightly exceeded the average for irrigation and rural development projects and for a small number of fertilizer plant projects. The difficulties faced in the sector were examined in 2005 in an evaluation of partly satisfactory operations in the Lao People’s Democratic Republic. Problems experienced included (i) inadequate project design, including insufficient understanding of the problems and opportunities viewed from the perspective of beneficiaries; (ii) no clear distinction between addressing the needs of subsistence farmers and options for commercialization of agriculture; (iii) project complexity; (iv) weak institutions; (v) shortfalls in operation and maintenance; (vi) marketing impediments confronting farmers and agribusinesses; and (vii) adverse impact of external factors (e.g., declining farmgate prices through much of the 1980s and 1990s). These problems are pervasive throughout the agriculture sector in both OCR- and ADF-funded projects. Nevertheless, since the livelihoods of about 80% of the population in the region depend directly or indirectly on agriculture, the sector remains important for virtually all countries. Some ADB irrigation and drainage projects have achieved good results. When successful, such projects bring significant gains to the beneficiaries. For irrigation projects, the key success factors were (i) an enabling policy environment; (ii) involvement of stakeholders and beneficiaries during all project phases, particularly operation and maintenance; (iii) participatory techniques to develop a sound understanding of the roles and responsibilities of farmers and water user associations and to create a climate in which participants are willing to pay irrigation fees; and (iv) adequate water supply reaching tail-end users, who are usually small farmers. The characteristics of successful irrigation and drainage projects are outlined in the box.
Box 7: Characteristics of Successful Road Projects
• Adequate levels of traffic use the completed roads; traffic growth is associated with economic growth.
• Vehicle operating costs and journey times were reduced and transport services improved.
• Continuity of ADB’s engagement in a country’s road sector and of ADB staff involvement had a positive influence on ADB’s contribution to project success. Reform initiatives were often pursued through a dialogue spanning several lending and TA operations, sometimes covering a decade.
• Good quality at entry covered the quality of the project preparatory TA, the project design, and the incorporation of lessons learned from previous projects.
• Strong government ownership was evident when ADB supported parts of a major highway investment plan that featured prominently in the medium-term investment plan of the DMC.
• Executing agencies performed well, were sometimes supported by supervision consultants, and often had a track record of having previously handled similar projects.
• Executing agencies, consultants, contractors, and ADB staff worked together to solve problems and handle unforeseen circumstances that developed during implementation.
• Supervision consultants and contractors performed satisfactorily.
• Regular ADB supervision missions were a consistent feature of successful projects, particularly during the first 2–3 years after loan approval, when most problems arise and ADB missions can be of most help.
• Adequate maintenance is essential for project success and sustainability.
Box 8: Characteristics of Successful Power Projects
• Because of the large deficiencies in the supply of energy, demand was not a problem, and benefits were immediate once the projects were completed.
• Increased electricity supply facilitated economic growth and contributed to a better quality of life.
• ADB evidenced a long-term commitment to working in the power sector.
• The plant and equipment were fully utilized and correctly operated and maintained.
• Financial policy dialogue and tariff reform helped to ensure sufficient funding for investment, operation, and maintenance.
• The project management team in the executing agency showed commitment, quality, and experience; familiarity with ADB’s loan requirements; and an ability to learn from previous projects.
• There was continuity of the executing agency’s staff and the consultants employed to assist with implementation.
• There was early recognition of problems during implementation and a flexible approach by both ADB and the executing agency to solve problems.
• ADB support contributed to strengthening institutions.
• ADB’s contributions to successful outcomes included a careful assessment of the capabilities of the executing agency, a flexible approach to project design and implementation, and regular project review.
Box 9: Characteristics of Successful Irrigation and Drainage Projects
• Elements of an enabling environment that allowed farmers to supply the demand for their produce included (i) a policy and institutional framework that promotes sound water resource management; (ii) a legal framework for water user associations that promotes cost recovery at least sufficient to finance sustainable operation and maintenance; (iii) rural infrastructure (e.g., roads that allow farmers to market their products, and farm inputs to be delivered when they are needed); (iv) efficient markets that are free of price distortions and barriers to competition for both farm products and agricultural inputs; and (v) access to information on demand, prices, and technology.
• Long-term ADB involvement in the sector and building up effective partnerships with executing agencies over a decade or more contribute to project success, policy reform, and the development of institutional capacity.
• Indicators of project ownership by executing agencies include (i) establishing site-based project offices, (ii) well-qualified staff, (iii) selecting executing agency personnel involved in earlier projects, and (iv) financing a considerable share of project cost.
• Good quality at entry reflected the quality of the feasibility study and project design, incorporation of lessons from prior projects, and the level of stakeholder participation.
• Direct stakeholders and beneficiaries were involved in all project phases, particularly operation and maintenance. Participatory techniques were used to develop a sound understanding of the roles and responsibilities of farmers and water user associations and to create a climate in which participants were willing to pay irrigation fees.
• Adequate water supply reached tail-end users, who are usually small farmers.
• Making changes in project design during implementation contributed to achieving good project outcomes.
• Effective quality control systems for civil works and internal and external audit systems were in place, even in remote areas.
• During implementation, continuous attention was paid to building the systems needed for effective operation and maintenance.
• Effective ADB project administration includes regular review missions, proactively helping to solve problems and making required approvals in a timely manner.
