Manual for Development Projects - Planning Commission
Manual for Development Projects - Planning Commission
Manual for Development Projects - Planning Commission
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Chapter-7<br />
ministries/ organizations/departments responsible <strong>for</strong> implementation of projects should, in the initial<br />
stage, take a decision about the goods/equipment/machinery which are locally available or can locally be<br />
manufactured/fabricated.<br />
vi) Foreign Procurement / Utilization of Foreign Aid<br />
(a) In certain cases, the Loans/Assistance from the Donor Agencies are tied, which means that the<br />
machinery/ equipment have to be procured from the firms of the individual country or from the firms of<br />
the member countries of the donors club. The selection of appropriate materials/ machinery/equipment<br />
and framing of specifications, however, has to be carried out as per requirement of the project.<br />
(b) The <strong>for</strong>eign assistance is not timely utilized in certain cases due to various reasons and accordingly<br />
the development of the country suffers. The following are considered as the main causes of slow<br />
utilization of <strong>for</strong>eign assistance:<br />
i) There is a growing tendency on the part of aid-utilizing agencies and depart-ments to come up with<br />
highly inflated figures of project aid requirement especially against fresh aid. The past trend indicates that<br />
hardly 3-5 per cent of project aid gets disbursed in the year of commitment as there is always a time-lag<br />
between pledges and commitments. Even this magnitude of disbursement takes the <strong>for</strong>m of downpayment,<br />
consultancy fees and payments <strong>for</strong> other services rendered. Generally no imports of equipment<br />
and machinery are involved.<br />
ii) Delay by the sponsoring Ministries/ Organizations to obtain approval in respect of the project by the<br />
Competent Authority i.e. CDWP/ECNEC etc.<br />
iii) Procedural delays by the aid-utilizing agencies which result in delays in the procurement of materials<br />
required <strong>for</strong> the projects.<br />
iv) Delay sometimes takes place because the conditions <strong>for</strong> effectiveness of the loan are not fulfilled in<br />
time to enable disbursement of the loan.<br />
v) Delays in appointment of the consultants.<br />
Page 10 of 26<br />
vi) Tendency of the executing agencies to go by the terminal dates of opening L/Cs and disbursements<br />
resulting in frequent requests <strong>for</strong> extension of these dates.<br />
http://hd2/pc/popup/ch7_p.html<br />
9/23/2010