Sri Lanka - Local Development Support Project

Overview & Synopsis

Ratings for the Local Development Support Project for Sri Lanka were as follows: outcomes were moderately satisfactory, the Bank's performance was moderately satisfactory, and the monitoring and evaluation quality was modest. Some lessons learned included: the collaboration with the EU facilitated opportunities and valuable partnerships (with the UNDP and The Asia Foundation), which enabled cost-saving synergies, strategic reallocation of funding, and complementary activities that supported our project objectives. Future projects that are considering such partnerships should consider similar synergies. Having a shared objective also helped convene government and other stakeholders around the same agenda and conveyed the importance of local capacities and governance. The project included a complex and ambitious set of activities, such as biannual basic transfers, performance-based transfers, and participatory processes. This was particularly complex, given some of these elements, such as performance-based transfers, were being piloted for the first time in the country and in the most lagging, low-capacity provinces. This required adequate and competent staffing in both the PCU and PIU. In LDSP, staffing needs were not met, despite them featuring in the PAD and in the legal covenant, due to various external factors, which severely hampered implementation. Ensuring staffing is in place should be considered a condition for disbursement. The absence of an MIS caused several complications throughout the project, such as disbursement and accounting delays between local government, provinces, and the line ministry. Projects involving complex fund flows between different levels of government should prioritize the establishment of a strong MIS. In addition, inadequate technical designs for common infrastructure projects were a key factor affecting the efficiency of LGA projects. Establishing a community of practice between LGAs to share designs among local authorities pursuing similar infrastructure projects could help address this.