Administration Report of the Director General - Erd - 1997

ADMINISTRATION REPORT

- 2000 -

DIRECTOR GENERAL

DEPARTMENT OF EXPERNAL RESOURCES

OUR MISSION

To coordinate, negotiate, mobilize and oversee effective and efficient utilization of all forms of foreign official development assistance to the government of Sri Lanka for socio – economic development and to compile and manage government’s external debt.

External Resources Department (ERD) is responsible for coordination, negotiation, and mobilization of official development assistance to Sri Lanka.

The major functions performed by the Department are as follows:

1. Identification of projects and programmes for funding with external resources in line with government priorities and donor criteria and maintaining a project pipeline in consultation with National Planning Department and Line Ministries.
2. Consultation with Donor countries and agencies to review ongoing projects and to recommend new proposals for donor consideration.
3. Coordinating foreign aid matters with donor agencies, Sri Lanka missions abroad, line ministries and local agencies, which implement projects.
4. Negotiating with donors to obtain best possible terms and conditions when borrowing externally while safeguarding the interests of the Government of Sri Lanka (GOSL).
5. Entering into financial agreements on behalf of GOSL with donor agencies.
6. Provide for human resources development, capacity building and institutional development through technical cooperation.
7. Take follow up actions to ensure efficient and expeditious utilization of foreign aid committed by donors.
8. Compilation and maintaining a management information system on foreign aid to

Sri Lanka.

9. Maintain the data-base on external debt contracted by the government of Sri Lanka

These functions are performed by the Department under 8 technical divisions supported by Administration and Accounts Division.

1. Japan Division
2. ADB Division
3. World Bank Division
4. Bilateral West Division
5. Bilateral East Division
6. Technical Assistance Division
7. Policy Division
8. Debt Management Division

9.Administration & Accounts Division

The cadre position of the Department is given in Annex I.

In keeping with Sri Lanka’s priorities, the bulk of the foreign assistance committed during 2000 was in support of economic infrastructure (power and energy, transport, telecommunication and water supply), environment protection, agriculture and private sector development.

Loan and Grant Agreements to the value of Rs. 32,251 million have been signed during the 12-month period ending December 31, 2000. Of this amount Rs. 7,174 million has been extended in the form of out right grants. A summary of grant and loan commitments by donors is given in Annex II.

Aid disbursements during 2000 amounted to Rs. 40,580 million of which Rs. 35,352 million consisted of loans. The balance amount Rs. 5,228 million received in the form of out right grants. The Govt. of Japan provided for the highest value of disbursements totaling to Rs. 16,499 million in loans and grants. The ADB and the World Bank have been the 2nd and 3rd largest donors to Sri Lanka in terms of aid disbursements, and have provided Rs. 6,208 million & Rs. 3,673 million respectively.

Out of the total aid disbursements in 2000, 13 percent was in the form of out right grants, 87 percent in the form of concessionary loans. A summary of grant and loan disbursements by donor is given in Annex III.

The activities undertaken by the technical divisions of the Department during the year 2000 are explained below.

1. Japan Division

Japan Division is responsible for all matters relating to:

1. Mobilization of resources from Japan for government’s priority projects & programs. This includes, developing the project and TA pipeline, coordination of project formulation process, negotiating and signing agreements complying with all government and JICA, JBIC and Government of Japan procedures.
2. Strategic management of loan and TA portfolio of JICA, JBIC and Government of Japan financed projects.
3. Coordination with the line ministries and the JICA, JBIC and government of Japan regarding the Japanese assistance to Sri Lanka excluding the work referred to under TA Division.

There were 45 projects handled by the Japan division. The outstanding balance as at the beginning of the year was US$ 2,158 million. The government of Japan committed another US$ 87.3 mn through 8 grant and loan agreements signed during 2000.

The Grant Agreements signed during 2000 include the following.

Project.Amount (US$ mn)

1. Improvement of General Hospital – Ratnapura 5.3

2. Improvement of Housing for Low Income People 7.3

3. Improvement of Tangalle Fishery Harbour & Training Centre 3.7

4. Improvement of General Hospital – Ratanpura Phase II13.5

5. Improvement of Fishery Harbour & Training Centre - Phase II 4.3

Only one loan agreement signed in 2000 was for Port of Colombo North Pier Development Project - Phase II for US$ 54.1 mn.

2. Asian Development Bank Division (ADB)

Responsibilities of the Division are all matters relating to;

1.Mobilization of resources from ADB for government’s priority projects & programs. This includes, developing the projects and technical assistance pipeline, coordination of project formulation process, negotiating and signing agreements complying with all government and ADB procedures.

1. Strategic management of loan and TA portfolio of ADB financed projects.
2. Co-ordination with line Ministries and the ADB regarding the ADB resources to Sri Lanka excluding the work referred to under TA Division.

The total number of projects handled by this division was ….. and the outstanding balance as at the beginning of the year was US$ 1,449 million. ADB committed another US$ 119.1 mn through 8 agreements in 2000 and the main loan agreements signed were as follows:

ProjectAmount (US$ mn)

1. Forest Resources Management Sector Project27.5

2. Secondary Education Modernization Project49.4

3. Water Resources Management Project19.4

4. Coastal Resources Management Project (TA)12.8

3. World Bank Division

World Bank Division is responsible for all matters relating to;

1. Mobilization of resources from the World Bank for government’s priority projects and programs. This includes, developing the project and TA pipeline, coordination of project formulation process, negotiating and signing agreements complying with all government and World Bank procedures.
2. Strategic management of loan and TA portfolio of World Bank financed projects.
3. Co-ordination with line Ministries and the World Bank regarding the World Bank resources to Sri Lanka excluding the work referred to under TA Division.

The number of projects handled by this division during 2000 was 13 and the total outstanding balance as at the beginning of the year was US$ 1,664 million. IDA committed another US$ 20.8 mn through 6 agreements signed in 2000 and the main agreements signed were as follows:

Loan agreements:

ProjectAmount (US$ mn)

1. Advance for PPF of Distance Learning Project .1

2. Legal & Judicial Reform Project18.0

3. Advance for preparation of CBSL Strengthening Project .6

Grant agreements:

ProjectAmount (US$ mn)

1. Institutional & Policy Frame Work for

urban Air and Fuel Quality Improvement Project .3

2. Power Sector Restructuring Project.8

1. Bilateral West Division

This division is responsible for all the matters relating to:

1. Mobilization of resources from Bilateral West Donors[1] for government’s priority projects and programs. This includes, developing the project and technical assistance pipeline, coordination of project formulation process, negotiating and signing agreements complying with all government and donor's procedures.
2. Strategic managementof projects funded with loans and grants provided by the Bilateral West Donors.
3. Co-ordination with line ministries, our embassies and the BW Donors regarding the resources of donors indicated below to Sri Lanka excluding the work referred to under TA Division.

The number of projects handled by this division was 73 and the total outstanding balance as at the beginning of the year was US$ 1,508 million. Another US$ 62 million was committed by bilateral west donors through agreements signed during 2000 as follows:

Federal Republic of Germany.

Grant agreements signed during 2000 include :

Project Amount (US$ mn)

1. Enterprise Information Project..3

2. Integ. Livestock Husbandry on Small Farms in SL .08

3. Rehabilitation of Displaced People in Jaffna .7

1. Development of Fishing Community for sustainable

Management of their Natural Resources .2

1. Drinking Water Supplies/Sewerage Disposal Vavuniya .2
2. Upgrading of the Timber Industry. .2

One loan agreement was signed for US$ 30. 4 mn for DFCC III project.

The Netherlands

The total (US$ 3.96 mn) came as a grant for Renewing and Upgrading of the Signaling and Communication System of the Coastline Railway (Kalutara - Matara) Project.

Norway

Grant agreements signed:

ProjectAmount (US $ mn)

1. Technical Assistance Fund1.5

1. Strengthening of the Marine Pollution

Prevention Authority1.1

3. Development of Higher Education Utilizing

information technology1.1

4. Industrial Networking Programme0.5

Sweden.

Main grant agreements signed during the year were:

ProjectAmount (US$ mn)

1. Development of Bond Market in Sri Lanka0.1

2. Alternative Highway Colombo - Kandy (Feasibility) 1.1

3. Research Cooperation 2000 –20027.3

4. Improvement of Quality Infrastructure for Fisheries Industry0.5

1. Rehabilitation of old Laxapana and

Polpitiya Hydro Power Project1.0

United States of America (USA)

Grant agreements signed during 2000 were :

ProjectAmount (US$ mn)

Citizens Participation Project0.5

Sustainable Economic Growth Programme 1.2

Humanitarian Assistance Program (HAP)1.1

Increased competitiveness in the global mkt.2.0

Donation of 45000 MT Wheat – 416(b)5.4

The only loan agreement signed in 2000 was for US$ 5.0 mn for the Import of Wheat under PL 480 Title 1 programme.

Nordic Development Fund (NDF)

NDF committed US$ 6.8 mn through a loan agreement for Secondary Education Modernization Project in 2000.

5.Bilateral East Division

Bilateral East Division is responsible for all matters relating to:

1. Mobilization of resources from Bilateral East donors[2] referred to below for government’s priority projects and programs. This includes, developing the project and TA pipeline, coordination of project formulation process, negotiating and signing agreements complying to all government and procedures of Bilateral East countries.
2. Strategic management of loan and TA portfolio of Bilateral East Donor financed projects.
3. Preparatory work and follow-up actions of the following Joint Economic Committee Sessions with India, Pakistan China and Iran.
4. Co-ordination with line Ministries and the Bilateral East donors regarding the resources of Bilateral East donors to Sri Lanka excluding the work referred to under TA The following grant/loan agreements were negotiated and were able to finalize during 2000 with the Bilateral Donors:

During the year under review the Bilateral East division handled 23 projects and at the beginning of the year outstanding balance was US$ 189 million. Another US$ 31 million was committed by the Bilateral-East donors during the year 2000 as follows:

China

Two loan agreements signed in 2000 were.

ProjectAmount (US$ mn)

1. Economic and Technical Cooperation2.4

2. Economic and Technical Cooperation6.0

Two grant agreements signed in 2000 were

ProjectAmount (US$ mn)

1. Supply of General Goods1.2

2. Economic & Technical Cooperation4.8

Kuwait.

Government of Kuwait committed a loan of US$ 9.9 mn for the Rural Electrification Project.

6. Technical Assistance Division

Technical Assistance Division is responsible for managing foreign training programes provided by the donors, co-ordinating activities relating to consultancy/volunteer services and mobilization and negotiation of assistance from UN system. It is also the responsibility of the Division to coordinate and monitor the implementation of projects financed by UN agencies to ensure timely and efficient utilization of assistance.

The number of applications received by TA Division for training programmes from the line ministries was about 5000 and there were only 867 placements under 556 programmes offered to Sri Lanka through ERD. Israel, Italy, Pakistan and Philippines became new donors of the technical assistance to Sri Lanka in 2000.

The major grant agreements signed with UNDP in 2000 were as follows:

ProjectAmount (US$ mn)

1. Judicial Legal Reform Programme0.1

2. Strengthening the Capacity of the SLIDA0.4

3. Sustainable Development of Land Resources0.1

7. Policy Division

Policy Division is responsible for:

1. Enhancing of ERD role in aid coordination
2. Assisting on foreign aid management functions
3. Reporting and dissemination of information on foreign assistance
4. Enhance ERD role in managing foreign aid with better understanding of donor policy, priorities and strategies

During 2000 the following main functions have been performed.

• There were 97 project proposals received from various ministries and agencies. Department of National Planning cleared 60 proposals and 52 of them have been referred to the donor desks for submissions to the donors.
• Two high level meetings comprising of all ambassadors and heads of donor missions were arranged to present the economic and political situation of the country.
• Two circulars were issued on

(a)Loan operations and

(b)Issuance of resident visas for experts and volunteers.

• ERD started to present an annual report on foreign aid received by Sri Lanka and the report titled Foreign Aid Review 1998 was published. Foreign Aid Review for 1999 was finalized in 2000.

8. Information Systems and Debt Division

This Division is responsible for the following tasks:

1. External debt recording and managing.
2. Conducting loan portfolio reviews periodically and keep staff informed.
3. Monitoring utilization of loan and grant database built up using the CS-DRMS debt management software and updating the system with new software and hardware.
4. Maintaining ERD databases and ERD’s corporate IT policy.
5. Co-ordinating with Central Bank of Sri Lanka (CBSL) and other donors matters relating to dissemination of debt related information and aid utilization.
6. Managing information communication policies/procedures to ensure information flow among agencies concerned.

The following functions have been performed during 2000.

1. Comprehensive management information system (MIS) on foreign aid commitments, disbursements and debt service payments was maintained in an accurate and timely manner. Various reports generated from the system were produced to cater the requirements of users such as donors, ministries, the Central Bank of Sri Lanka, Treasury and other agencies. The statistical annexes for the review on foreign aid for the year 1999 were prepared.

1. Re-categorization and clearing of foreign debt were performed as the process of implementation of the recommendations made by international consultant recruited for the preparation of Debt Sustainability Analysis.

1. Database on foreign training opportunities for the year 2000 has been maintained.

1. The UNDP technical assistance project to strengthen the capacity for aid management of the ERD was handled. Under the project, long term and short term training for the ERD staff have been provided. In addition, services of consultants were obtained to

4.1.Consolidate databases developed under the previous UNDP project on strengthening the External Resources Department.

4.2.Improve the knowledge management system

4.3.Prepare debt policy and strategy

Annex I

The Cadre position of the Department

* Driver (Act- UNDP)

Organisation Chart of the department is given in Annex IV.

Annex II

ORGANIZATIONAL CHART OF ERD

DG

ADG ADG

ADB POLI

DM WB JAPBI/W BI/E TA

D D D D D

DD DD DD DD DD DD DD DD DD DD DD DD DD DD DD AC DD

SA SA STN AD AD AD AD AD AD AD AD AD AD AD AD AD

AO

CC PRO L1 TR

HD SH HD

ACC ADM

SI SC TY RA CS ST TY RA CS ST TY CS ST TY RA CS ST TY CS ST TY RA CS ST TY RA CS ST RA CS CS ST TY

OES Drivers

NOTE

DG-Director GeneralADG-Addl Director GeneralD-DirectorDD-Deputy DirectorAD-Assistant Director

STN-StatisticianSA-System AnalystAC-AccountantAO-Admin OfficerTR-Translator

CC-Chief ClerkPRO-Public Relative officerHD/ACC-Head AccHD/AdminSH-Shroff

LI-LibrarianCS-ClerkST-StenoTy-TypistSI-Stat Investigator

SC-Systems ControllerRA-Research AssistantJap-JapanBI/W-Bilateral WestDM-Debt Management

BI/E-Bilateral EastTA-Technical AssistantADB-Asian Dev.BankPOLI-Policy DivisionWB-World Bank

[1] BW Donors :-

Germany, U.S.A., France, Norway, Sweden, Netherlands, U.K, Finland, Denmark, Switzerland, Belgium, Canada, Italy, Austria and EU.

[2]BE Donors:-

Australia, Korea, China, all countries in the Middle Eastern region, New Zealand, IFAD, UNFPA, UNICEF, WHO, UNESCO, WFP, IAEA, Colombo Plan, ILO, FAO and India, Pakistan other Asian countries and the Former East European countries.