| PROJECT IMPLEMENTATION AND IMPACT
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| C&AG's Report, paras 42 and 49
| 39. Project monitoring was carried out in all seven of the cases examined by the National Audit Office, although its extent varied from project to project. In most cases routine monitoring reports did not include assessments of the impact projects were having or were likely to achieve.
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| (i) Aid and Trade Provision Projects
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C&AG's Report, para 42
Q 21
Qs 23-25
| 40. In the case of the radio studios project the Administration's completion report identified that one of the consultants had failed to concentrate on the critical tasks, and had contributed to a significant increase in consultancy costs. The Administration said that they had overrated the consultant's capacity to deliver. By the time they had discovered that fact, it was too late to make a change and they had had to pay him more to finish the task. His total remuneration was £651,382 but that was still substantially less than the bid submitted by the next cheapest consultant.
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Q 5
Q 20
Q 197
| 41. The Administration accepted that the use of the studios had not been as great as it should have been; but by March 1996 they were being fully utilised and the project had achieved a reasonably successful outcome. The Administration attributed this to increasing demand and to the provision of training.
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C&AG's Report, para 43
Q 117
| 42. A recurrent problem with the shortwave radio transmitters project was Radio Republik Indonesia's failure to secure adequate budgets for the costs that were to be met by the Indonesian government. The resultant delays with some of the local work impeded the project's general progress. However the transmitters are in service and the reception tests satisfactory, with 177 million people able to hear the broadcasts, 20 per cent of which are for educational purposes.
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C&AG's Report, paras 46 and 57
Evidence, Appendix 1, pp 27-33
Q 31
Q 233
| 43. Of the projects examined by the National Audit Office, only the Ombilin coal mine has been formally evaluated by the Administration. Contrary to expectations, this project incurred a negative economic rate of return. Two of the three sets of equipment were unsuited to the geological conditions and could not be used; and there were major technical problems with the operation of the third, which was under-used. Employment opportunities for lesser-skilled members of the community had been low; the project had done little to improve the situation of the poor; and nothing to improve the position of women. The Administration accepted that Ombilin was not a successful project; it was not clever to end up with a large piece of expensive equipment that was visibly not being used.
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| C&AG's Report, para 58
| 44. One of the objectives of the Aid and Trade Provision is to increase UK exports. From the relevant projects there were:
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| (i) an £18 million follow-on order for radio transmitters; and
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| (ii) £1.7 million in follow-on orders from the Ombilin Coal Mine project; but
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| (iii) no evidence of the vast orders expected to follow the radio studios project.
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Q 5
Q 11
| 45. The Administration agreed that, although Marconi secured substantial follow-on orders, the other Aid and Trade Provision projects did not. Their judgement was that the commercial significance of the Aid and Trade Provision in the context of the market such as Indonesia and the follow-on orders arising from it were quite limited.(ii) Police Management Training
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C&AG's Report, para 54
para 46
Q 92
| 46. Monitoring reports showed that the Indonesian police force's internal Consultancy Unit had been almost fully trained; strategic plans had been produced detailing the expected level of services to the public. Achievements in the development of better standards of public service, however, had been confined to a few regions and involved improved reception desk and driving/vehicle licence issuing procedures. There was only limited evidence to suggest that the project was effective in encouraging the Indonesian police towards community policing. This project was one of a number of police assistance projects which were to be evaluated later in 1997.
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Qs 3 and 174
Q 97
| 47. The Administration emphasised that this was a small project, involving expenditure of less than £2 million over 12 to 14 years. They did not pretend that there would be a dramatic effect across the entire Indonesian police force. They had not endeavoured to detach the police force from the armed forces. But they did secure very specific management capacity building, with about 120-130 senior Indonesian policemen trained. They believed that they had left behind some better understanding of community policing. The Administration quoted, by way of example, the way the police had dealt with youth violence in South Jakarta and referred to the UNICEF representative in Indonesia having found a high degree of police receptivity on women's and children's rights.
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| (iii) Mapping Projects
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| C&AG's Report, para 55
| 48. The Administration consider that the land resource maps produced under the Regional Physical Planning Programme for Transmigration project represent one of the most extensive and comprehensive mapping exercises in the world. Summarisation of the information under the National Overview of Land Resources project had ensured that a wider audience was aware of these valuable data and had encouraged their use in future planning decisions on the utilisation of land.
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| C&AG's Report, para 56
| 49. The Regional Physical Map Improvement and Training project has ensured that planners have access to, and knowledge of, land resource data. The greater knowledge of the limitations of land capability in the outer islands that this project and its predecessor generated may have been reflected in the lower level of government-sponsored transmigration in recent years and in improved site selection in particular.
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| Qs 198-200
| 50. The Administration agreed with our predecessors that the lesson which came out of these three projects was the need to train people to understand the maps. These showed that 95 per cent of the land area was unsuitable for transmigration. But the Indonesians needed training so that they did not send people to inappropriate sites. The Administration accepted that they had probably underestimated the training need but it had proved to be the most successful part of the project.
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| (iv) Lessons Learned
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Q 118
Q 103
| 51. The Administration said that they did not dissent at all from the lessons set out in the National Audit Office report. They were a learning organisation and saw five key improvements as having been made over the last few years:
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| (i) giving much more rigorous attention to all phases of the project cycle, ensuring that appraisal, monitoring and evaluation were done rigorously;
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| (ii) treating Aid and Trade Provision projects on all fours with other projects;
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| (iii) increasing the clarity with which they set measurable objectives so that they could be judged more openly at the end of projects;
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| (iv) paying more attention to social, institutional, environmental and good government factors; and
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| (v) ensuring that they were more competent, such as through internal training leading to a certification of competence in financial aid management.
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| (v) Conclusions
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| 52. We are concerned that there were delays in the utilisation of the radio studios provided with support from the Administration until sufficient demand had built up and until staff had been properly trained. We consider that this points to there having been inadequate management of the project. We are concerned, too, that a consultant employed on this project not only failed to concentrate on critical tasks but was paid more as a result of this deficiency. Although this consultant's bid was still cheaper than the next lowest, the Administration's experience illustrates the risk in accepting a low offer without first checking on the bidder's capacity to deliver.
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| 53. We regard the outcome of the Ombilin coal mine project as particularly disturbing: it engendered a negative economic return and therefore will have had an adverse effect on those whom it was intended to benefit. Not only was the equipment provided for the project expensive, it was also unsuitable. We consider that its visible lack of use is not a good advertisement for the UK aid programme or for British industry. We agree with the Administration that this project was a serious failure.
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| 54. We regard the achievements of the police management project in the promotion of community policing as disappointing in that the improvements appear to have been confined mainly to better procedures for receiving people and for dealing with driver and vehicle licensing. We note the encouraging report by UNICEF's representative concerning the attitude of the Indonesian police to women's and children's issues and the Administration's evidence on the better police handling of youth disturbances in South Jakarta, but it is not clear that these improvements stem from this particular aid project.
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| 55. We are pleased that the Administration regard themselves as a learning organisation. We consider that these projects illustrate the real need to put into practice the lessons they say they have learned as set out in paragraph 51 of this report.
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