| Project Detail |
Project Name Capacity Development for Strengthening Project Implementation and Portfolio Performance Monitoring in Cambodia
Project Number 57220-001
Country / Economy Cambodia
Project Status Approved
Project Type / Modality of Assistance Technical Assistance
The technical assistance (TA) aims to enhance the institutional arrangement within the Government of Cambodia, enabling more effective and sustainable portfolio monitoring. This will be achieved by strengthening the capacity of the Department of Project Portfolio Management (DPPM) of the Ministry of Economy and Finance (MEF) through (i) designing and operationalizing the portfolio management system; (ii) strengthening the project portfolio data management system; and (iii) operationalizing online training modules on portfolio management.
The TA is aligned with Strategy 2030 of the Asian Development Bank (ADB) and its operational priority 6: Strengthening Governance and Institutional Capacity
Project Rationale and Linkage to Country/Regional Strategy
Cambodia is a small, open, lower-middle-income economy. Leveraging its low labor cost and tourism advantage, it has achieved economic growth at more than 7% per year for the two decades prior to the coronavirus disease (COVID-19), while maintaining a public debt level of less than 32% of the gross domestic product. Cambodia has made progress in strengthening public financial management with notable improvements in budget credibility, budget transparency and comprehensiveness, and fiscal and budget management. The legal and regulatory framework for public procurement is in place, but gaps exist in e-procurement, operations and market practices, and government capacity. A significant factor contributing to the governments success in supporting Cambodias sustainable and inclusive growth lies with its effective management of the development partners, ensuring they are coordinated and focused on their respective areas of expertise and value addition.
The government receives assistance from many development partners, including ADB, because of its strategic geographic location in Southeast Asia, its status as a less-developed country, and as an outcome of its history under the Khmer Rouge. The governments average annual borrowing for development projects is about $2 billion. ADB is the largest multilateral development partner in Cambodia. As of January 2023, Cambodias active portfolio from all lending development partner sources was about $11 billion for more than 430 projects. The government has a robust sectoral structure for coordination between the development partners and line ministries through technical working groups co-chaired by the government and a development partner. Notwithstanding the excellent coordination, project implementation performance needs significant improvement. Further strengthening of project readiness, project management, procurement, financial management, and safeguard capacities in line ministries is needed.
Delays in project implementation led to cost increases and losses in the economic and financial benefits of the projects. The government and the development partners have been working together to strengthen the systems and processes to improve project delivery and performance monitoring. This has included the (i) Standard Operating Procedures (SOPs) on Project Management, Procurement and Financial Management for All Externally Financed Projects/Programs; (ii) ongoing training of project management unit staff on the SOPs; (iii) implementing a joint country portfolio performance review (JCPPR) action plan for the government and development partners to improve systemic constraints to effective project implementation; and (iv) establishing a project development facility for project preparation and detailed engineering prior to project approval for development partner-financed projects. The General Department of International Cooperation and Debt Management of MEF is the focal point for the monitoring of portfolio performance and has been managing the externally-funded portfolio through its Department of Multilateral Cooperation and the Department of Bilateral Cooperation, which included planning, preparation, negotiations and approval of the projects and the monitoring and oversight of project implementation, completion, and evaluation. As the external portfolio has expanded over the last decade, it has become more difficult for these two departments to effectively manage the portfolio. The 2022 JCPPR, which was concluded in April 2023, reinforced the need for a more effective coordination mechanism and real-time monitoring of the portfolio performance and actions to resolve bottlenecks and to ensure timely project implementation.
MEF recognizes the need for a more permanent and stronger institutional arrangement for monitoring the portfolio and improving its performance and in February 2022 established DPPM, a dedicated department to perform this key role. The newly created DPPM needs to strengthen its capacity and develop its monitoring systems and the tools to transfer its knowledge and experience to line ministries. This TA is aimed at helping the DPPM fulfill its duties in project and portfolio monitoring.
Impact
Promotion of a sustainable and effective development program aligned to Cambodias Pentagon Strategy (Phase 1), the Cambodia Public Financial Management Reform Program, and ADBs forthcoming Country Partnership Strategy 2024-2028. |
