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         Export Corridors

The Bolivia Export Corridors Project, supported by Credit 2012-BO for SDR $37.0 million equivalent, was approved in FY89. The credit was closed in FY96, one year behind schedule and was fully disbursed. The Implementation Completion Report (ICR) was prepared by the Latin America and the Caribbean Region. A summary of the Borrower's contribution is in Appendix B.

The project, the first in the transport sector after a hiatus of about ten years without Bank operations in the sector, had two main objectives: (i) to upgrade key links in the transport network, particularly on the export corridors towards the Pacific and the Atlantic oceans and (ii) to strengthen transport sector institutions with a view to making the National Railway Company (ENFE) more market-oriented and improving the maintenance capability of the National Road Agency (SNC). The project included the following physical components: on the Andean (Pacific) routes, (a) maintenance of the La Paz - Oruro highway, the project's main physical component representing about half of the project costs and (b) improvements to the track and freight terminal on the La Paz - Arica (Chile) railway line; on the Eastern (Atlantic) routes, (c) rehabilitation of the rail line Santa Cruz - Quijarro, (d) construction of a freight terminal in Santa Cruz, and (e) conversion of rail boxcars to multiple use on ENFE's Eastern network; systemwide, (f) maintenance works on the main road and rail export routes, (g) purchase of telecommunications equipment for both rail networks. The technical assistance component was intended to: (h) improve transport planning capabilities, (i) improve road maintenance management (j) improve ENFE's marketing and management capabilities, (k) facilitate the use of containers and airfreight and (l) carry out road investment studies.

Project objectives were largely achieved. The major road investments were carried out and expanded beyond their original scope. These investments reduced transport costs from the Bolivian highlands to the port of Arica. The systemwide road and rail maintenance works were achieved as 28 out 29 planned works were done. The railway investments on the two corridors were only partially completed, and were limited to the upgrading of the Santa Cruz- Puerto Guijarro line. Institutionally, the project was successful in putting in place road maintenance and equipment management systems. These systems were widely used by the district offices of the SNC by the time the project was completed although, subsequently, speedy application of the Administrative Decentralization Law passed in 1995 created some difficulties in the management of the road subsector. The objective to improve the railway's market orientation was largely exceeded: with the arrival of a new administration in 1993, the railway's technical assistance component was restructured to assist the government in privatizing the railway company. This process proceeded swiftly and privatization of the railway was completed in March 1996. The fact that some of the railway investments included in the project were not carried out did not appear to hinder the privatization process.

The ICR reestimated the economic rate of the main road components (representing 85 percent of the cost of the physical works) at 19 percent, which is satisfactory although lower than the appraisal estimate of 62 percent due to higher investments costs and lower-than-forecast traffic.

OED rates the project outcome as satisfactory, its institutional development impact as substantial, its sustainability as likely, and Bank performance as satisfactory. These ratings are substantially in line with those of the ICR, athough OED does rate institutional development impact more highly than the ICR.

The main lesson of this project is that radical institutional changes can be accomplished swiftly and be successful when goals and strategies are clear, as was the case of the railway privatization. However these changes may be disruptive, at least initially, when such clarity is not present, as appears to be the case in the application of a national decentralization law to the road subsector.

The ICR is exemplary. It contains an excellent description and analysis of the project, shows in detail the project links to country and sector strategies, and leaves a good yet synthetic record of the process for the privatization of the railway, as well as of difficulties encountered in the application of decentralization policies to the road system. The ICR also contains a well thought out plan for the project's future operations, comprising appropriate targets, and includes contributions by all five project executing agencies.

No audit is planned.

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