RISK ASSESSMENT AND RISK MANAGEMENT PLAN ?· RISK ASSESSMENT AND RISK MANAGEMENT PLAN ... rates. Mitigation…

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  • Second Chittagong Hill Tracts Rural Development Project (RRP BAN 42248)

    RISK ASSESSMENT AND RISK MANAGEMENT PLAN

    Risks

    Assessment without

    Mitigation Management Plan or Measures Assessment

    with Mitigation

    Project start-up delay

    Medium

    Advance actions for recruitment of the PIC, PMO, and DPMO establishment. Resettlement plans for three rural roads prepared ready for implementation. PMO space and equipment retained from previous project and TA to provide quick start-up. PMO basic staffing retained from TA to ensure early start-up. MOCHTA initiating establishment of regional recruitment committee to commence recruitment of project director.

    Low

    Limited capacity of lead implementing agency

    Medium PMO will employ national staff, many of whom worked on the CHTRDP

    a and are

    familiar with ADB requirements. The PMO will retain the national finance officer and project coordinator of the CHTRDP, who also provided input to the project preparatory TA. A liaison officer will be based in Dhaka to provide direct coordination between MOCHTA and the PMO. Project implementation consultants will provide direct support to the PMO and at DPMO. Three additional assistant engineers will be placed in each DPMO to provide technical support for infrastructure development.

    Low

    Limited capacity of implementing agency

    Low LGED is responsible for implementation of the rural roads component. LGED has implemented many externally financed projects, including the CHTRDP. It is very well experienced with ADB requirements. Institutional capacity is inherently strong and it is a well-resourced agency.

    Low

    Delay in funds flow Low ADB loan funds for all components will flow directly from ADB to a designated PMO imprest account at a local bank acceptable to ADB (Bangladesh Bank). The statement of expenditures will be audited by FAPAD. Three accounting staff will be provided in the PMO and one accounts assistant in each DPMO to facilitate.

    Low

    Limited number of experienced project staff

    Low Appropriate training in ADB disbursement and project accounting procedures will be undertaken prior to implementation for accounts staff.

    Low

    http://www.adb.org/Documents/RRPs/?id=42248-01-3

  • 2

    Risks

    Assessment without

    Mitigation Management Plan or Measures Assessment

    with Mitigation

    The PIC will provide additional financial management support staff to support the PMO and DPMO.

    PMO and DPMO staff for financial management will be recruited on a competitive basis for good quality and capacity.

    Ineffective accounting policies and procedures

    Low In accordance with government accounting regulations and ADB requirements

    Low

    Infrequent internal audit

    Low Monthly reporting by PMO and annual visits from comptroller and auditor general (FAPAD). Internal audit cell conducts planned and spot audits. Comptroller and auditor general (FAPAD) also conducts audit of donor externally financed projects.

    Low

    Infrequent external audit

    Low Project accounts, including imprest account, will be audited by an independent external auditor acceptable to ADB (FAPAD) and audit terms of reference will be acceptable to ADB.

    Low

    Poor reporting and monitoring

    Low In accordance with government regulations and ADB requirements. Experienced staff retained from the CHTRDP and project preparatory TA for the project will contribute to reporting. Comprehensive monitoring systems, including an SQMC established independently to work with the PMO.

    Low

    Insufficient information systems

    Low Project accounts will be maintained manually in accordance with government and ADB project requirements. MS excel spreadsheets will be developed for periodic financial information and reporting requirements. A management information system database will be established for project and a geographic information system database for natural resources monitoring.

    Low

    Tender collusion High Tender collusion is a major problem in Bangladesh across all sectors. Nongovernment organizations will be contracted for many project activities and SQMC staff will oversee tender processes and unit rates. Mitigation measures are that the LGED engineers estimate must be based on the prevailing schedule of rates. During the life of the project, introduce e-procurement to reduce the risk of tender collusion.

    Medium

  • 3

    Risks

    Assessment without

    Mitigation Management Plan or Measures Assessment

    with Mitigation

    Lack of quality control

    Medium Quality control is another major problem across all projects having civil works components. For the project, the mitigation measure for the LGED roads component will be the responsibility of the independently reporting SQMC within the PMO. SQMC staff will carry out quality control tests on site and compare these tests with LGED records. Once the SQMC is operational, the quality control risk could be reduced to moderate.

    Low

    Lack of attention to environmental and social aspects

    Low All contracts will contain environmental and social conditions consistent with government and ADB requirements. SQMC staff will verify compliance pertaining to all safeguards matters. A risk category of moderate is possible once the SQMC is operational.

    Low

    Oversight of resettlement impacts

    High The PMO will handle resettlement activities for LGEDs roadworks. LAR plans will be developed for each subproject and applied. All LAR procedures are clearly set out in LAR frameworks. Safeguard monitoring will be the responsibility of the independently reporting SQMCfunds disbursement will be affected by noncompliance with safeguard issues.

    Low

    Overall Medium Moderate overall when the quality control checks are in place

    Low

    ADB = Asian Development Bank, CHTRDP = Chittagong Hill Tracts Rural Development Project, DPMO = district project management office, FAPAD = Foreign Aided Project Audit Directorate, LAR = land acquisition and resettlement, LGED = Local Government Engineering Department, MOCHTA = Ministry of Chittagong Hill Tracts Affairs, PIC = project implementation consultant, PMO = project management office, SQMC = safeguards and quality monitoring cell, TA = technical assistance. a ADB. 2000. Report and Recommendation of the President to the Board of Directors: Proposed Loan to the

    Peoples Republic of Bangladesh for the Chittagong Hill Tracts Rural Development Project. Manila (Loan 1771-BAN, a $30 million loan approved in 2000 and effective in 2002; loan closure was on 30 September 2009).

    Source: Asian Development Bank.

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