FUTURE DIRECTION OF JAPAN’S OFFICIALDEVELOPMENT ASSISTANCE (ODA) IN
INFRASTRUCTURE DEVELOPMENT
Kochi University of Technology
Kochi University of Technology

ΟRajendra NIRAULA1
Shunji KUSAYANAGI2

ABSTRACT: Japan’s official development assistance (ODA) has been providing the major resources forsocio-economic development in many developing countries. Japan’s contribution in hard infrastructuredevelopment has been dominating other soft development like human resources and technology
development in recipient countries. Recipient countries especially low-income developing countries are
ever dependent on developed countries for human resources and technology for their domestic
infrastructure development. In addition, the insulated project execution system of the Japanese grant aid
projects has influenced the international competitiveness of Japanese contractors and consultants to
expand overseas business. The new scheme developed in this study, based on the Nepalese andCambodian contexts, integrates the perspectives of recipients as well as donors. Strengthening
universities and technology development system in developing countries, and using alternative projectdelivery system in ODA project execution have been recommended to address recipients’ as well as
donors’ industries issues and to improve the efficiency and efficacy of ODA. The new ODA scheme has
been started to implement in Cambodia and it has enabled to produce a new product for Cambodian
rehabilitation.
Key Words: ODA/Official development assistance, donors, recipient countries, human resources
development, technology development

1. INTRODUCTION
developed countries for human resources andtechnology.
Japan’s contribution in hard infrastructuredevelopment has been dominating other soft
development like human resources and technology
development in recipient countries. In addition,
Japanese consultants’ overseas business was mainly
from the Japanese finances in the overseas. Despite
the large ODA amount from Japan and long time
involvement in ODA projects Japanese firms’
overseas business in international organizations andother governments is significantly lower than theircounterparts from some of the developed countries
like the USA, UK. The authors argue for reforming
Japan’s ODA system in order to enable low-income
developing countries able to develop humanresources and technology themselves for

Official development assistance (ODA) since its
adoption has become the major resources for socioeconomic development of the developing countries.
The ODA amounts since 1990 contributed by themain members of Development AssistanceCommittee (DAC) are shown in Figure 1. Japan’s
ODA was the largest among the donors in the
19990s, and still occupies second position since
2000. The developed countries have already spent
about USD$ 1 trillion for the development ofdeveloping countries. However, the development ofsome of the low-income developing countries isinsignificant as seen in the Figure 2. In addition, theconstruction industry of low-income developing
countries is still not able to develop their domestic
socio-economic infrastructure and is dependent on
1

Ph.D., Center of Excellence for Social Management Systems, Kochi University of Technology
Tel: 0887-57-2771; Email: rajendra.niraula@kochi-tech.ac.jp
2
Dr. Eng., Professor, Infrastructure System Engineering, Kochi University of Technology
Tel: 0887-57-2415; Email: kusayanagi.shunji@kochi-tech.ac.jp
1Further, the organization for European Economic
Co-operation (OEEC) established in 1948 wasreconstituted as Organization for Economic Cooperation and Development (OECD) in December
1960. Many countries started to establish their aid
cooperation agencies in 1961 like Kuwait fund for
Arab Economic development, United States Agency
for International Development (USAID), Japan
Overseas Economic Cooperation fund, Swedish
International Development Authority (SIDA) and soon. However Official Development Assistance(ODA) concept was adopted by DAC established in1961 in OECD separating ODA from “Other
Official Flows” (OOF) and identifying as ODA
those official transactions which were made withthe main objective of promoting the economic andsocial development of developing countries and thefinancial terms of which were “intended to beconcessional in character”1).
The DAC is the principal body through which theOECD deals with issues related to co-operation
with developing countries. There are 23 members in
the DAC. These are Australia, Austria, Belgium,
Canada, Denmark, Finland, France, Germany,
Greece, Ireland, Italy, Japan, Luxembourg,
Netherlands, New Zealand, Norway, Portugal,
Spain, Sweden, Switzerland, United Kingdom,
United States and Commission of the European

infrastructures development and to enhance thecompetitiveness of Japanese consultants andcontractors for expanding their overseas business.
This paper discusses some of the issues in Japan’s
ODA and their influence on local constructionindustry of recipient countries as well as on
overseas business of Japanese contractors andconsultants, and explains a new ODA scheme basedon the Nepalese and Cambodian contexts.

2. OFFICIAL DEVELOPMENTASSISTANCE (ODA)
The historical beginnings of official development
assistance were the development activities of thecolonial powers in their overseas territories, theinstitutions and programs for economic cooperation created under United Nations auspices
after the Second World War. In 1950, the Colombo
Plan (“Council for Technical Co-operation in Southand South-East Asia”) was initiated by the
Commonwealth with 7 founding member:
Australia, Canada, New Zealand and the UK as
donors. The US and Japan joined the plan in 1951
and 1954 respectively. In 1955, Japan started
reparation payments to Burma (now it is known as
Myanmar), the Philippines and Viet Nam.
Development assistance group (DAG) was formed
in 1960 as a forum for consultations among aid
donors on assistances to less-developed countries.

800

30000

700

25000

600

500
US$

million US$

20000

400

15000
300

10000

USA
FranceCanadaJapan
Germany

Bangladesh
Nepal
Uganda

U. K.
Italy

2004

2001

1998

1995

1992

1989

1986

1980

2004

2002

2000

1998

1996

0

1994

0
1992

100

1990

5000

1983

200

Cambodia
Burkina faso
ZambiaFigure 2: GDP per capita in some low-income
developing countries,
Source: Asian Development Bank, ECONSTATSTM

Figure 1: Amount of ODA from main members of DAC
Source: OECD, figures for 2005 are preliminary2Communities. Among the 23 members the USA,
Japan, the UK, France, Germany, Italy and Canada
are the major contributors in the DAC.

It includes grant aid that provides funds with no
obligation for repayment, and technical cooperationthat transfers technology to developing countries.
i) Grant Aid:
Japan provides grant aid to countries that have arelatively low income among the developing
countries. Grant aid is primarily channeled tosupport basic human needs (BHN) (such as
medical services, public health, water supply,
and rural and agricultural development) andhuman resources development. In addition,
Japan provided grants aid to carry out
infrastructure projects, such as roads, bridges,
and telecommunications. The Ministry ofForeign Affairs implements Grant aid, with theassistance of the Japan International
Cooperation Agency (JICA).
ii) Technical Cooperation:
Technical cooperation is targeted toward
development of the human resources necessary
for the economic progress of developing

3. JAPAN’S ODA
The history of Japan’s financial assistance dates
back to 1954 when treaty of peace, reparations andeconomic cooperation was concluded between
Japan and Burma. Since then the Japanese
government concluded reparations treaties with
Philippines, Indonesia and Vietnam. The quasireparations and non-reimbursable financial aid havebeen provided to Cambodia, Laos, Thailand,
Malaysia, Singapore, Korea and Micronesia2).
(1) Features of Japan’s ODA
Japan’s official development assistance (ODA) isclassified into three types: i) bilateral grants, ii)
bilateral loans, and iii) financial subscriptions andcontributions to international organizations.
a) Bilateral grant

1996

9.94

1997

18.49

1998

10.52

1999

16.71

2000

11.73

2001

26.10

8.76 19.73
23.71

0.77

0.46

2.06 19.59

Technical Cooperation

Loan

Grant Aid

Miscellaneous

Debt Relief

48.77 11.52 15.00 11.16

0.20

86.65

33.36

30.44

0.46

57.43

23.50

6.43

9.00 11.10

5.95

37.54

5.87

8.50 11.05

0.48

63.44 204.00

27.92

12.69

31.18

6.19 14.37 10.92

0.16

62.82

23.43

7.00 28.91

0.22

52.02

23.18

9.90 19.59

0.36

67.92

19.34

5.37
8.27

Materials & Equipment

4.18

INFRA Total

Buildings

8.44

4.75

River Training

Water supply

1995

Communication

Bridges
7.66

0.75

1994

Power

Roads

Year

Airports

Infrastructure Development

Food aid & Aid for foodproduction

Table 1: Japan’s ODA to Nepal (1994-2001), Unit: 100 million Yen

15.89

12.72

37.70

0.37

13.47

25.20

0.47

10.44 17.10

53.64

8.50 19.37

0.80

54.34

7.00 19.13

1.44

81.21

54.94

Source: White paper on Japan’s ODA

Cost

No.

Cost

No.

Cost

No.

Cost

No.

Cost

Cost

% of Nepal's
National Budget

2000

163

3.07

82

5.02

184

7.26

69

2.66

15

0.75

1.11

19.87

1.7

2001

138

2.56

67

5.42

135

5.56

50

2.55

12

1.00

1.29

18.37

1.4

2002

162

3.37

54

5.70

106

3.70

63

2.73

20

1.15

1.07

17.71

1.3

Trainees

Experts

Study Team

JOCV

Source: White paper on Japan’s ODA

3

Other
Volunteers

Provision of
Equipment

No.

Total TechnicalCooperation

Table 2: Breakdown of Technical Cooperation under Japan’s ODA to Nepal (2000-2002),
Cost in 100 million Yen

Year

19.87
18.37

materials and equipment for the construction ofprimary schools3) (refer: Japan’s ODA Annual
reports). Similarly, less than 1 percent of the grantaids to Cambodia in the same period was used forhuman resources development scholarship3).
Technical cooperation which is responsible forhuman resources and other soft development also
has not addressed the issues in the human resources
and technology development in developing
countries. It provides mere training for a few people
usually from clients’ organization in Japan or inthird country. The major portion of the technicalcooperation has been utilized for the experts andvolunteers as seen in Table 2. Further, technologies
development in aid recipient countries like Nepal
and Cambodia was never addressed. Despite thelarge ODA investment, developing countries like
Nepal and Cambodia could not improve the qualityof higher education and are not able to develop
appropriate human resources and technology fordomestic infrastructure development. Donors havebeen filling the gap of human resources andtechnology from outside through the ODA rather
than helping developing countries to develop
themselves.
(3) Overview of ODA implementation system in
relation to opportunities for local industry, andoverseas business of Japanese contractors andconsultants
Donor assisted projects in developing countries do
not provide enough opportunities for the local firms
to be the main executor for the execution of
medium to large infrastructure development
projects. Bilateral grant aid projects in principle andpractice are tied to the donors’ industry4). Donors
deploy consultants and contractors from theircountries of origin to execute the bilateral grant aid
projects. Although some bilateral loan andmultilaterally financed projects in principle allowed
local industry to participate through international
competitive bidding (ICB) but most of the local
firms in developing countries do not have enoughcapacity to compete with foreign firms due to low
technical (human resources and technology) andfinancial capability and insufficient experience. In
effect, the local industry does not have enoughaccess to the foreign assisted project. In addition,
donors have been using their own countries’
standards for design and construction of the
facilities in donor assisted projects. A recipient
country therefore has to follow different standards
even in building similar infrastructure under
different donors. For instance, the USA, French,
Australian, etc standards have been following ininfrastructure design and construction in Cambodia.
Such execution system has not motivated local

countries. It includes: (1) Dispatch of experts,(2) Acceptance of trainees, (3) Provision ofequipment and materials to facilitate technology
transfer, (4) Project-type technical cooperation
incorporating dispatch of experts, acceptance of
trainees and provision of equipment andmaterials, and (5) Dispatch of the Japan
Overseas Cooperation Volunteers (JOCV).
The fields covered by Japan's technicalcooperation range widely from basic humanneeds (BHN), such as public health and medical
services, to computer science and other areas ofadvanced technology. JICA is responsible formost of Japan's technical cooperation activities.
b) Bilateral Loan
Bilateral loans are the loans that provide the funds
needed for development under long-term and low
interest conditions. These loans provide funds todevelop and improve the economic and social
infrastructure necessary to support self-help efforts
and sustainable economic development fordeveloping countries. JBIC: Japan Bank forInternational Cooperation handles the major part ofJapan’s ODA loans.
c) Financial subscriptions and contributions tointernational organizations
Subscriptions and contributions for multilateral
aid are indirect methods of extending aid bychannelingfunds
throughinternationalorganizations. Japan provides considerable amountto some multilateral agencies in order to support thedeveloping countries through the agencies.
(2) Activities under Japan’s ODA
Japan’s ODA has been utilizing for hard as well assoft development in developing countries. It
consists of economic and social infrastructure likeroads, bridges, airports, building, water supply,
sanitation, health care, schools, etc. In addition, it
also contains supply of equipment, food aid anddebt relief fund. Other social development included
under Japan’s ODA are human resource
development, development study, etc. which are
performed under the technical cooperation. A
typical Japan’s ODA to a least developed country
Nepal is shown in Table 1.
Although Japan’s ODA incorporates soft
development function, the main activities of the
ODA is seemed to be hard infrastructuredevelopment. Construction of facilities had theprime importance rather than human resources andtechnology development in developing countries.
For instance, all grant aids excluding technicalcooperation under Japan’s ODA in 1994-2001 to
Nepal was used in hard infrastructure developmentwith as much as 3 percent was utilized for
educational infrastructure related activities—4

Table 3. The overseas businesses of Japanesecontractors were taken from overseas construction
association of Japan Inc. (OCAJI) 5). Similarly, theoverseas consulting business data of Japanese firms
were taken from the Infrastructure Development
Institute-Japan. A report prepared by theInfrastructure Development Institute-Japan6) withthe survey of the overseas consulting business of 60
Japanese firms showed that nearly 85 percent ofoverseas business of Japanese consultants’ had been
under the Japanese finances. Similarly, Japanesecontractors’ business in the overseas under themultilateral agencies’ finances were very
insignificant. Japanese enterprises were providing
considerable amount of business for the Japanese
20.9

industries in developing countries to develop theirown standards. In effect, the existing system of
ODA execution has made recipient countries
without their own standards, and compelled to
deploy expensive foreign expatriate to implement
infrastructure development projects. As a result, thecapacity of local firms has remained unimproved
and there were no significant technologicaldevelopment in the local industry in low-income
developing countries.
Like in other bilateral ODA, Japanese consultants
and contractors are deployed for the implementationof the projects under the Japanese bilateral grant
aid. However, their businesses in international
finances were very low as seen in Figure 3 and

2004

72.3

8.1

150.7

77.3
43.7

168.9

187.8

2002

203.1

2001

211.5

51.5

12.9

195.1

81.5
16.4

2003

273.6

11.5
45.9
11.9

48.9

318.0

333.0

18.2
59.0
44.3

87.8

235.8

57.9

1999

235.7

51.7

1998

243.7

1997

235.9

1996

253.2

1995

241.5

15.0

2000

17.5

12.8
78.7

16.1

238.5
3.5

254.4

72.5
25.4

59.9

55.0

58.1

100

200

4.5

263.3

64.4
29.3

0

14.2
32.7

301.8

69.6

3.0

197.6

300

10.5
41.0

83.0

400

500

600

700

800

100 milion Yen

JICA

Grant A id

JBIC

Intrnational A uthority (A DB, W B, etc)

OthersOther than ODA

Figure 3: Overseas business of Japanese consultants in 1995-2004 by finance; Source: http://www.idi.or.jp

Table 3: Overseas construction contract awarded toJapanese contactors in 1999-2003 by the type offinance. Unit 100 million Yen
Internat
ional
Others Total
Finance577
47
0 7,297562
43
0 10,000626
15
0 8,083416
20
253 7,584375
18
226 8,982

Year

ODA
ODA
Own Loans (Yen (Grant
Credit)
aid)

1999
2000
2001
2002
2003

6,374
8,856
5,942
6,639
7,090

299
539
1,500
256
1,273

Table 4: Overseas construction contract awarded
to Japanese contactors in 1999-2003 by the typeof employer. Unit 100 million Yen

Source: Tomise, M., OCAJI

Year

Local
Publicprivateenterprise

1999
2000
2001
2002
2003

3,037
5,411
3,902
3,712
4,045

2,596
2,553
2,191
2,098
2,559

Local
Domestic
JapaneseJapanese Total
privateenterpriseenterprise
1,559
105 7,297
1,819
217 10,000
1,818
172 8,083
1,356
418 7,584
2,254
124 8,982

Source: Tomise, M., OCAJI

5

countries. Overseas consulting businesses of firms
from Australia, Canada, France, Germany, the UK
and USA were higher than the Japanese firms did.
For instance, the consulting contract awarded in
2002-2005 for technical assistance under the AsianDevelopment Bank (ADB) to the main consultantsfrom Japanese origin was lower than consultantsfrom the USA, Australia, UK, Canada and New
Zealand, as shown in Figure 57). In addition,
Japanese firms showed a mere presence in the
consulting works under the World Bank finance.
The Figure 6 has shown that firms from Japan had
the lowest consulting business among the UK,
USA, France, Germany, Canada, Australia,
Netherlands, Italy and New Zealand counterparts
under the World Bank (WB) funded projects in
2001-20038). Overseas consulting business ofJapanese firms in the WB finance was mainly
limited in technological consulting for hard
infrastructure development, and not in policy,
management and administration related works.
Japanese firms’ consulting business under the WB
in 2001-2003 was less than 5% of the USA and UK
counterparts’ businesses. In addition, althoughbusiness practices of Japanese and USA contractors

contractors in the overseas, Table 4. However,Japanese contractors are not able to expand theiroverseas business beyond the 1983’s value except
sharp rise in 1995-96 as seen in Figure 4.
In addition, the ability of Japanese firms in
obtaining overseas consulting business is lower thanthat of counterparts from some of the developed
17,000Total
overseasbusiness

16,00015,00014,00013,000Business
underJapan'sODA

12,000100 million Yen

11,00010,000Business
underinternation
al finance

9,000
8,000
7,000
6,000

businessunder
Owners'
fund

5,000
4,000
3,000
2,000

Others

1,000

160

2001

1997

1993

1989

1985

1981

1977

1973

0

140

Figure 4: Overseas business of Japanese contractors

120
35

100
million US$

30

80

60

20

15

40

10

20
5

2002

2004

2001

2005

2002

Australia

New Zealand

Netherlands

CanadaItaly

Germany

FranceUK

OthersAustralia

New Zealand

CanadaGermany

France

Japan

UK

2003

Japan

USA

0
USA

million US$

25

2003

Figure 6: Value of contract for all types ofconsulting services under World Bank finance withthe main consultants’ countries of origin.

Figure 5: Value of contract awarded for technicalassistance under ADB finance with leading
consultants’ countries of origin.

6

domestic construction industry also does not require
contract administration. This is one of the reasonsdue to which Japanese consultants have lower
chances compared to the western counterparts to getmanagement and administration contracts in theinternational construction market.
Thus international competitiveness of Japaneseengineers has been influenced by the uniqueness of
the Japanese construction industry and the insulated
execution of the Japanese ODA projects. Galloway,
P.D. (2005) has commented as “the current
Japanese consulting engineer simply does notpossess many of the needed skills such ascommunication, project management, dispute
resolution and so forth in order to competeinternationally or to move domestic construction
market ahead in Japan. Moreover, Japanese
consulting engineers are being treated as “support
staff” and not as professionals such as in the
medical and accounting profession”11).

are different, the overall industrial ability ofJapanese contractors in obtaining overseas business
was found lower than USA counterparts. For
instance, top 9 Japanese contractors in 2003 hadabout 15 % of their annual turnover from theoverseas business whereas the top 8 counterparts
from USA could receive 60 % of their annual
turnover in the same period. The total international
turnover of the top 8 USA contractors in 2003 wasmore than double of the total international businessof top 9 Japanese counterparts9).

4. ISSUES IN JAPAN’S ODA(1) Insulated Execution System
As such the bilateral aids are tied aid and are
executed by the deployment of consultants andcontractors from donors’ countries of origin; theexecution of the Japanese bilateral grant aid projects
are the responsibility of Japanese consultants andcontractors with the cooperation of clients fromrecipient countries. Like in the Japanese domestic
construction industry, the grant aid projects
irrespective of the system of execution in recipient
countries do use lump sum contracts and do notincorporate the international practice of theconstruction market like progress payment, claims,
and contract administration. The installment
payment system is done. The target date ofcompletion and the final product are the only
concerned matters for the executor. The insulated
execution system has put attention in donors’
industry and on technical matters only in project
implementation provided limited opportunity forrecipients’ industry neglecting the importance ofinternational practices including management andadministration of contract.

(ii) Effects of the system on Japanese contractors:
Japanese firms deploy most of the skilledworkforce from Japan and unskilled labors from therecipient countries. They do all the major works
themselves, and simple work through subcontracting to local firms. As such main contracts
do not incorporate progress payment and claims, themain contractors do not need to put attention inprocess control and variation. In addition, since thesimple works are subcontracted, sub-contracts do
not also demand for contract administration
including claim and dispute resolution. Thus
construction contracts under the Japanese grant aid
do not provide Japanese contractors enoughopportunities to exercise rigorous contract
administration including claim management anddispute resolution. Thus Japanese contractors could
not gain enough experience from the grant aid
projects to enhance their competitiveness in the area
like management, administration which are required
to expand overseas business such as in project
management. Further, Nielsen, K.R. (2005) has also
pointed out that “Japanese engineers need contract
administration, dispute resolution and risk
management skills in order to be competitive in the
global construction market”12).

(i) Effects of the system on Japanese consultants:
The Japanese consultants perform the basic &detail design and construction supervision of theJapanese grant aid projects. The supervision works
usually limited to the mere certification of thecontractors’ work but not the real administration ofcontracts and supervision of works. Many of theresident engineers sent by consultants only approve
what the contractors have done and do not supervise
in a real sense. Such situation comes from the lackof tension between the parties because no claim is
submitted10).
As such the contracts do not incorporate progress
payment and claim, the consultants do not have to
put attention in contract administration including
work-process, claim and variation. Such situation
has made Japanese consultants deprived fromexercising international practices in the Japanese
grant aid projects. In addition, the Japanese(iii) Effects of the system in local constructionindustry from recipient countries:
Since simple works are only subcontracted to
local contractors, local construction industry does
not have enough opportunities to acquire modern
technology and execution management skills fromthe Japanese firms in order to enhance the capacity.
Moreover, donors’ assisted project usually requires
7experts and acceptance of trainees from developing
countries. The experts are dispatched upon therequest of the recipient governments to assist
clients. Dispatch of experts in developing countries
dominates the human resources development
activity of Japan’s ODA. Table 2 showed that lessthan 20 percent of the technical cooperation
provided to Nepal in 2000-2002 was utilized fortraining the trainees from Nepal. The training inJapan is at least 10 times expensive than the similar
trainings in developing countries do. As a result,
there
was
insignificant
human
resource
development compared to the technical cooperation
amount extended to a recipient country. In addition,
the JICA offers training for human resources
development mainly for the clients’ people.
However, JICA trainings are provided in an
equitable manner and are generic in nature. It does
not provide an organization of a country for regularparticipation and rarely addresses the country
specific needs.
Training in a particular area for a few people froman organization in a long-year gap does not improve
the performance of the organization. Thus, training
for a few people in a discrete manner does not affectthe skill level of an industry where hundreds ofuntrained people enter to the industry. This can befurther illustrated with the help of Table 5: about 8
people from Cambodia and 13 from Nepal had gonefor infrastructure sector training under Japan’s ODA
but the universities in Cambodia and Nepal are
producing about 300 and 800 civil engineersrespectively every year. Thus, even JICA’scontribution in training is significant, a few trained
people such as 8 from Cambodia and 13 from Nepal
in a year are not sufficient to improve thefollowing donors’ standard for design and executionof a project. Such system has made lack ofmotivation for technological development andinnovation in recipient’s industry, and the capacityof
local
constructionindustry
remained
unimproved. As a result, local construction industry
from low-income countries is not yet able todevelop the domestic infrastructure themselves. The
dependency of low-income developing countries on
the foreign firms for human resources andtechnology has not been decreased.
In order to improve the situation in the lowincome developing countries and to provide theJapanese firms opportunities to enhance theirinternational competitiveness, the project execution
system in grant aid projects, as discussed later insubsequent chapters, should be changed.
(2) Inefficient Technology Transfer
Since the locals do not have enough opportunities
to be involved in execution of the foreign assisted
projects, the final product delivered to thebeneficiaries enabling them to use the products but
lacking the technology and process forreconstruction or rehabilitation. Japan’s ODA had
been more oriented to the clients than industries in
the recipients’ countries. However, there are many
executing agencies for infrastructure development
in low-income countries like Nepal and Cambodia
without proper coordination. Further, there is no
horizontal movement of human resources across theexecuting agencies. A technology transferred to an
executing agency therefore will flow only invertical direction if not died out, and there is no
medium for horizontal diffusion. For instance,
ministry of physical planning and works, ministryof water resources ministry of local development
and some other organizations have been involved ininfrastructure development in Nepal. However,there is no flow of manpower across the ministries.
Thus, a technology or trained manpower within aministry remains within its boundary without
significant spill over. A technology for a specificpurpose, say bridge design/building, transferred to
one ministry is equally applicable to otherministries, but there is no medium for dispersion toother agencies.
There is a need to introduce additional stakeholder
in order to facilitate the transfer and diffusion of atechnology in developing countries. Universities asproposed in the new scheme as discussed below
would provide better transfer, absorption andinternalization in a recipient country.
(3) Inefficient Human Resources Development
System
The major activities of the human resource
development under Japan’s ODA are dispatch of

Table 5: Numbers of trainees in infra sector in
JICA training from Cambodia and Nepal

CambodiaYear

No. ofTraining
No. ofTraining
trainees Cost (1000 trainees Cost (1000(infra)yen)(infra)
yen)

1994
5
1995
4
1996
4
1997
13
1998
10
1999
12
2000
8
2001
5
2002
9
Total
70
Source: JICA

8

Nepal

6,347
10,4694,768
32,702
19,043
12,911
16,117
5,877
13,566
121,800

12
17
24
11
15
12
11
7
10
119

29,816
46,671
230,884
30,31432,04331,368
17,958
11,933
18,391
449,378

domestic industry.
(1) Universities Collaboration for Enhancing
Capacity of University
Tertiary education is the source of the skilledworkforce. However, universities in many
developing countries including Nepal andCambodia did not have enough number of faculties
with advanced degree/knowledge and lackappropriate facilities to deliver practical andresearch oriented education. Industry professionals
had been complaining the quality of graduates for
not acquiring enough practical knowledge and skills
from the university education2). As such training fora few clients’ people cannot improve theperformance of the industry unless the local
universities in developing countries were able todeliver quality education.
In order to enhance the capacity of university the
new scheme has universities collaboration function
to provide faculties from least developed countries
opportunities for higher studies in developed
countries in the industrial needy areas. Unlike thegeneral cooperation, the collaboration under the
new scheme will enable universities able to deliver
quality education/training, conduct researches anddevelop appropriate technology/product for thedomestic infrastructure development. The faculties
during the capacity enhancement will acquire theknowledge and skills for technology which areappropriate for their domestic infrastructuredevelopment. The seed technology for thedevelopment of new technology/product in the least
developed countries is also transferred throughuniversities collaboration. It is required to referauthors’ paper2) for the model of universities
collaboration proposed for the new scheme which
has also been adopting for the collaboration
between KUT (Kochi University of Technology),
Japan and ITC (Institute of Technology ofCambodia), Cambodia for enhancing the capacity of
ITC, Cambodia, and developing human resources
and technology for Cambodian rehabilitation.
(2) Development of Human Resources andTechnology/Products in Recipient Countries
Unlike in the existing system, trainings for humanresources will be conducted through the local
universities in the recipient countries. The faculties
trained under the universities collaboration
supported by the universities/industries fromdeveloped country will provide training for the local
graduates and practitioners through the center of
excellence for education and research (COE&R).
Center of Excellence for education and research isan entity established at university with non profit
making operation in order to promote education,
research and development. The universities

performance of the Cambodian and Nepaleseconstruction industry respectively unless the qualityof higher education and in-house technology
development system were improved. The existingclients’ oriented JICA training has merely facilitatedthe individual benefits rather than improving
organizational performance.
The technical cooperation should be directed to
improve the human resource development system
like strengthening higher education so that the local
universities in the recipient countries could conduct
research and training themselves at lower cost andimprove the quality of education.

5. NEW SCHEME FOR FUTURE ODA
A new scheme has been developed in this study inorder to improve the efficiency and efficacy of
ODA system and to enable developing countries
able to develop appropriate human resources andtechnology domestically for their infrastructuredevelopment. Unlike in the existing ODA system,
the new scheme primarily utilizes university
functions for human resources and technology
development. Universities collaboration followedby establishment of center of excellence where
research and technology/ product development isperformed and deployment of human resources,
technology and product in development projects are
the main features of the new system. A schematic
diagram of the new system is shown in Figure 7.
The existing fragmented human resource andinfrastructure development system will be
integrated together with technology development in
the new system. A part of ODA will be forwarded
through universities for human resources andtechnology development, and other part will beutilized through executing agencies of the recipient
countries to construct the facilities. Universities
from donor country first provide higher
training/research opportunity for faculties fromrecipientcountry,
andenablelocal
university/institution able to establish center of
excellence for education and research (COE&R)
with adequate research and development facilities.
The COE&R will establish linkage with local aswell as international industry. The center with thesupport of universities from donor’s country will
providetraining
opportunities
for
local
practitioners. The local industry will be madefamiliar with international practice and technology
through the cooperation from the donor’s industry.
In this way human resources and technologicalsupport will be availed at the COE&R in order toenable local university to develop appropriate
human resources and technology required for the9

opportunities to acquire practical knowledge/skills
through internship and training. Similarly, the centerwith the help of universities and industries form
donor’s country will provide local professionals
advanced training and research opportunities.
b) Technology development
The existing ODA system has not addressed
technology development in recipient countries
instead feeding from outside. However, the new
system has envisaged technology development
functions of the COE&R. Since many developing
countries like Cambodia do not have their own
standards, the center in cooperation with executing
agencies and local industry will develop standards
for design, construction and management of
infrastructure and introduce the new technology forthe deployment. The system/equipment technology
development function of the COE&R incorporates
technology development for planning, design,
construction, management and material production.
Thus there will be parallel development oftechnologies and standards in recipient countries

collaboration will enable local university able toestablish the COE&R with adequate research anddevelopment facilities where faculties could deliveradvanced training, conduct research and develop
newtechnology/productsfordomestic
infrastructure development. The center will havehuman resource, technology and productdevelopment functions.
a) Human resource development
The human resources development includes the
production of skilled workforce ranging fromtechnicians to advanced professionals, and theactivities extend from providing basic training totechnicians/skilled labors to the advanced training
for industry professionals and researchers. The
center establishes strong linkage with domestic aswell as international construction industry in orderto feed industry practice in education andinternational practices and technology to thedomestic industry. It will continuously feed
university the industrial needs and activities in order
to update curriculum and to provide the graduates
Recipient Country
Government

Project Executing Agency

Technical Manpower(HR)

Education &Training

Local
University

System/Equipment(Technology)

Adv. Materials(Products)

COE for Education &Research

Education &Training

University
Collaboration

Japanese
University

KUT Human Development SchemeODA Human Development
Financial Support
Lending Agencies(JICA / JBIC)

Figure 7: Model for New ODA Scheme

10

Japanese Construction Industry

Local Construction Industry

ODA- Hard Infrastructure Development Projectwhich would enable the stakeholders to implement
infrastructure development project efficiently. The
development of standards and technology at the
COE&R would consequently help decrease thedeployment of expensive foreign expatriate ininfrastructure development in developing countries.
c) Product development
In addition to the human resources and technology
development, the COE&R has product development
functions in order to introduce advanced
construction
materials
forinfrastructuredevelopment. The seed technologies transferredthrough the universities collaboration arematerialized at the center and new technology andproducts are then introduced to the industry. The
standardization of the new technology and productis done through the cooperation from the industry
and implementing agencies. The center throughuniversity collaboration, researches and cooperationfrom local and donor’s industry will first absorb theseed technology and develop the appropriate
product suitable for the local environment. For
example, researchers from Institute of Technology
of Cambodia and Kochi University of Technology,
Japan through the universities collaboration with
were able to produce high strength concrete withself compacting concrete using local materials in
Cambodia. The same technology was used to
produce high strength pre-stressed pre-cast concrete
girder/beam using self-compacting concrete forfacilitating short span bridge rehabilitation in
Cambodia.
(3) Deployment of Human Resources,
Technology and Products in Development Works
The proposed new scheme has envisaged
deploying human resources, technology andproducts developed in the COE&R in development
works. Deploying human resources, technology andproducts of COE&R in development works would
provide faculties to experience industry practice,encourage university to develop more newtechnology and products and enable university toprovide graduates industry and research oriented
education. The cost reimbursement system for the
deployment of the services and products from the
COE&R would help lower the cost of infrastructuredevelopment and consequently lowers the loanburden of poor developing countries. The returns
from the services of COE&R could be utilized forfurther research and development and to deliver
quality education at reasonable cost. Such systemfurther enables local universities to be self-financed
and able to develop appropriate human resources
and technology domestically.

NEW ODA SCHEME
Unlike in the existing system, the new scheme
requires the involvement of universities fromdonors as well as recipient countries to actively takepart in ODA implementation. The functions ofdifferent stakeholders in the different stages of
implementation of the grant aid projects will be as
follows.
(1) Project Preparation Phase
The new scheme requires identifying appropriatequality of human resources and type of technology
required for the execution of the projects underconsideration. Unlike in the existing system, theexecuting agencies should include, in addition to
the project features and feasibility, the quality ofhuman resources and technology for construction,material production and management required forthe execution of the projects under consideration.
The universities, industry and concerned
engineering institutions can supply the information
regarding the human resources and technology
available in the country. The complete project
proposal should then be submitted through the local
agencies of the donors following their prescribed
process.
(2) Request-Approval Phase
The consultants designated for the basic design
study of the apprised projects should recommend
the appropriate university/institution from therecipient’s as well as donor’s country of origin in
making availability of required human resources
and technology at the time of execution of the
projects under consideration. The basic design study
report for the new ODA project should include not
only the scope of work, cost estimate, schedule ofexecution but also the human resources andtechnology development plan. The consultants
shouldrecommendthepossible
universities/institutions from the recipient anddonor country of origin to be deployed for thedevelopment of human resources and technology inthe recipient country. The donor agency while
extending approval to carry out the project also
recommends the university/institution which will go
for the collaboration and engage in development of
human resources and technology as explained inpreceding chapters.
The single fiscal year contracting system under
the Japanese grant aid should be changed to multiyear approach with rolling programs and budget.
The basic and detailed design period should be
extended in order to make the project execution
plan compatible with the human resources andtechnology development plan. A researcher has also
recommended for the extension of the design period

6. IMPLEMENTATION SYSTEM FOR
11

Local competitive bidding will be used for theselection of the constructors and the contracts shallallow incorporating international as well as local
practices of the construction industry like progress
payment, contract administration including claims
and dispute resolution.

citing the prevailing design period was not enoughto investigate and to collect sufficient data for thedetailed design and estimate, and contractors had
been suffering from losses due to the encounter ofunidentified site condition during the execution of
the projects10). Thus extension of the design period
making multi-year contract will enable not only
consultants to investigate all necessary data but also
the universities/institutions able to develop andsupply required human resources and technology atthe execution stage of the projects. The new scheme
requires allocating a part of the existing technicalcooperation fund in order to support universities
collaboration and to enable recipient able toestablish and run the center of excellence foreducation and research.
(3) Execution Phase
The new scheme has envisaged an alternative
project delivery system as shown in Figure 8. An
alternative management contracting system has
been proposed for the execution of the projects.
Unlike in the existing execution practice, theconsultants/contractors from donor country in the
proposed scheme will perform the contract
management/administration/supervision rather thanreal construction of the hard infrastructure.
The consultants/contractors selected for the
execution of the project will be paid for theirservices including overhead and contingencies. It
will be still required to get the supervisions carriedout by consultants and/or contractors from thedonor’s side, however, the construction of the hard
infrastructure will be done through the local
consultants, contractors and suppliers.
The important activity in the execution of a project
under the new scheme is deployment of the special
resources such as competent human resource,
technology, and products from the COE&R in orderto ensure the acceptable quality and productivity forthe projects.

7. IMPLEMENTATION OF THE NEWSCHEME IN CAMBODIAKUT (Kochi University of Technology), Japan
with its own resources has been implementing thehuman resources and technology development
components of the new scheme of ODA in
Cambodia. KUT has established collaboration with
Institute of Technology of Cambodia, Cambodia in
2003, and the extended collaboration has been madeon April 2006 in order to implement the newscheme of ODA in real project. The extended KUTITC collaboration is intended to develop humanresources and technology for bridge rehabilitationin Cambodia.
KUT under human resource development
activities has provided 2 faculties from ITC
opportunities to study in doctoral program on
concrete technology and management in order toenhance the capacity of ITC in infrastructure designand development. Further, KUT-ITC collaboration
under technology development function intended to
introduce high strength pre-stressed pre-cast
concrete girder/beam using self-compacting
concrete in the Cambodian construction industry inorder to facilitate Cambodian rehabilitation. The
basic research using the local materials in
Cambodia for the same has been already completed,and a pre-stressed T-girder with heavy flange, span
20m, using high strength self-compacting concrete
was successfully casted on April 2006, and is shownin Figure 9. This was the first high-strength prestressed pre-cast concrete girder using self-

Infrastructure Development Project under ODA FinanceManagement
Contract

Donors’ Consultants/
Contractors

Supply of
Local Matls/ Tech / HR

Construction

Supply of
Advanced
Matls / Tech
/ HR

Figure 8: Execution system of Infrastructure development works under new ODA scheme

12

Universities
Collaboration

Contract Management / Administration / Supervision

COE&R

Local Consultants /Contractors /Suppliers

Executing Agencies(Recipient Country)

compacting concrete produced in Cambodia. Now
the process of standardization with the cooperationof implementing agencies in Cambodia has been
initiated. Thus, KUT-ITC collaboration until now
able to transfer the high-strength self-compacting
concrete technology to ITC and the extended
collaboration will enable ITC able to commercialize
the new product in the Cambodian constructionindustry. It has been envisaged that the girder
developed through KUT-ITC collaboration to
supply for the short span bridge rehabilitation in
Cambodia. Similarly, ITC through collaboration
with KUT will provide advance training
opportunities for the industry practitioners in
Cambodiaonconcretetechnology
andmanagement. However, additional collaboration
would be essential to enable ITC able to deliveradvanced training and to develop appropriatetechnology required for integrated infrastructuredevelopment and rehabilitation.
Thus, the proposed universities collaboration
system under the new scheme will enable local
university like ITC able to deliver advance training
and to develop technology themselves in recipient
countries.

Figure 9: Pre-stressed T-girder with heavy flange, span
20 m, casted with high strength self-compacting
concrete in Phnom Penh, Cambodia; Source: Vong, S.
and Prof. Shima, H., KUT, Japan

industry to acquire modern Japanese execution
technology and working culture of Japaneseindustry. Such execution system would help local
industry absorb and internalize modern technology
and materials including the Japanese execution
management. In addition, involvement of theuniversities in technology development would help
radial diffusion of technology. The increase in skill
level and availability of more technologies would
consequently help increase the productivity andoutput from the recipients’ local industry. This
scheme would consequently make developing
countries self-sufficient in human resources andtechnology
requiredfor
theirdomestic
development, and helps reduce the loan burden.
Since only 19 out of 209 Japanese universities
involved in civil engineering education do provide
some part of the construction and project
management education and many of the faculties
did not have international project execution
experience, the involvement of Japanese university
in the development works in developing countries
through the new scheme would provide Japanesefaculties and graduates opportunities to experienceinternational construction practices which would
help improve the quality of graduates as well ascompetency of faculties. This would also help
Japanese universities to enhance construction andproject management education in order to maketheir graduates prepare for the international project
execution. Similarly, the management contracting
system for the ODA project execution would
provide Japanese consultant and contractor
opportunities to execute with the international
practices in multicultural environment and toenhancetheirprojectmanagement
andadministration skills including communication,negotiation, and dispute resolution. The increase inproject management and administration skills would
help Japanese firms to be more competitive in theinternational market and able to expand their

8. EXPECTED EFFECTS OF THE NEWSCHEMEThe recipient country as well as donor’s industry
would be benefited from the proposed scheme. The
universities collaboration would enable local
universities capable enough to develop appropriate
human resources and technology for their domestic
infrastructure development. The functions of thecenter of excellence for education and researchwould help increase the skill level of the skilledworkforce by improving the quality and number oftechnical manpower and make availability of more
technologies in the local industry.
The training cost in Japan is very high due to thehigh living, accommodation and transportation cost.
A typical JICA group training cost per person permonth excluding living, accommodation andtransportation cost was about 226,000 Yen13).
Allowing for living, accommodation, andtransportation cost the cost would reach to 616,000
Yen per person per month. However, the cost of
training estimated on the basis of Cambodian
environment would become about 65,000 Yen perperson per month14). Thus, around 10 times people
could be trained in developing countries with thesame resources used for training in Japan if local
faculties were trained and universities were
strengthened. The construction opportunities under
the Japanese management would provide local
13

advanced training in concrete technology andmanagement in Cambodia. The impact of thehuman resources and technology development
through KUT-ITC collaboration in the Cambodian
construction industry will be evaluated.

overseas business in policy, management andadministration fields in which there is currently
insignificant business in the overseas compared to
the USA, EU and Australian counterparts.

9. CONCLUSIONS AND FUTURE
RESEARCH

REFERENCES
1.

Helmut Führer, “A history of the development
assistance committee and the development cooperation directorate in dates, names andfigures”, OECD, 1996.
2. Niraula, R. et al, “Infrastructure Development
and Educational Opportunities in the Least
Developed
Countries:
IssuesandRecommendations”,
JSCE
JournalofConstruction Management, Vol 12, pp 193-206,
2005
3. Japan’s ODA, Annual Reports 1994-2001
4. Guidelines of the Japanese Grant Aid forGeneral Projects and for Fisheries, 2004, JICA
5. Tomise, M., “Overseas Activities of JapaneseContractors” Overseas Construction Associationof Japan Inc. (OCAJI), 2005.
6. 平成 16 年度海外コンサル ティング業務等
受注実績調査報告書, http://www.idi.or.jp
7. Contracts Awarded For Technical Assistance,
http:
//
Asian
Development
Bank,www.adb.org/Documents/ADBBO/awarded.asp
8. Contract award search, The World Bank,
http://web.worldbank.org/WBSITE/EXTERNA
L/PROJECTS/0,,menuPK:51565~pagePK:9586
4~piPK:95915~theSitePK:40941,00.html
9. Engineering News Record (ENR), 2004.
10. Hirota, Y., “The role of Project managers andrisk management system for the overseas
construction project”, Doctoral dissertation
submitted to Kochi University of Technology,
Japan, 2005.
11. Galloway, P.D., “Engineering Education
Reform for the Japanese Consulting Engineer”,
Doctoral dissertation submitted to Kochi
University of Technology, Japan, 2005.
12. Nielsen, K.R., “Avoiding a crisis in theconstructionindustry:
Guidelinesforinternationalizing the Japanese standard
Conditions of Contract for Civil Works”,
Doctoral dissertation submitted to Kochi
University of Technology, Japan, 2005
13. Murakami. M., “Cost of JICA group training
course at Kochi University of Technology,
Japan”, 2004.
14. Niraula, R., “Integrated system for humanresources and infrastructure development indeveloping countries”: Doctoral dissertation
submitted to Kochi University of Technology,
Japan, 2005.

Japan’s ODA has been providing the major
sources for developing countries in their socioeconomic development. However, despite large
ODA volume, poor developing countries have notbeen able to develop appropriate human resources
and basic technologies for their domestic
infrastructure development. Human resources
development has been inefficient and technology
development in recipient countries was notevidently addressed under Japan’s ODA. The
existing ODA implementation system could notprovide recipient’s industry enough opportunities toabsorb and internalize modern technology andJapanese execution management in local industry.
Similarly, the Japanese firms were deprived fromexperiencing the international practices while
implementing the ODA projects.
KUT-ITC collaboration was able to train ITC
faculties on concrete technology and management
and to introduce a new high-strength selfcompacting concrete technology/product for
infrastructure rehabilitation in Cambodia. The
progress of the KUT-ITC collaboration until now
has shown that the proposed new scheme would beappropriate and successful in enhancing thecapacity of local university like ITC and indeveloping/introducing advanced technology for
infrastructure rehabilitation in developing countries.
These evidences have shown that the new scheme isappropriate and implementable in other developing
countries. However, the complete scheme needs tobe implemented to provide the integrated benefits torecipients’ as well as donor’s industry. Japanese
civil engineering universities as well as constructionindustry should move for the proposed new system
in order to enhance their international
competitiveness. The ODA should be taken as
opportunities inorder
toimprove
thecompetitiveness of both the recipients and donors.
The proposed scheme can be applied in otherengineering field also with necessary modificationin the role of stakeholders.
Future research includes implementing the KUTITC collaboration to enable ITC able to standardize
and commercialize the new technology to produce
high strength pre-stressed pre-cast concrete
girder/beam using self-compacting concrete in the
Cambodian construction industry and to deliver14

15