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         Seventh Transport

The Haiti Seventh Transport Project, supported by Credit 1756-HA for SDR $20.0 million equivalent, was approved in FY87. The credit was closed in FY96, five years behind the original schedule and was fully disbursed. The Implementation Completion Report (ICR) was prepared by the Latin America and the Caribbean Region, and includes an Aide-Mémoire incorporating the Borrower's contribution.

The project, part of a series of transport projects financed by the Bank, had as objectives: (i) to rehabilitate roads in poor condition; (ii) to improve coastal shipping operations and (iii) to strengthen sectoral institutions through training and technical assistance. The physical components included: (a) rehabilitation of a key road (35 km between Gonaives-Cap Haitien); (b) rehabilitation of 38 drainage structures for roads in rural areas, construction of two major bridges and the provision of road maintenance equipment; (c) improvement of shipyard facilities for inspection and minor repairs to vessels, and (d) construction of a training center for seamen. The technical assistance component was intented to (i) help improve the planning road investments as well as the management of road maintenance, and to help develop labor-based techniques for secondary road construction and maintenance; (ii) improve the management of maritime services and carry out technical studies addressing problems caused by siltation in the port of Jérémie.

The project was appraised and implemented during a period of constant civil disturbances, a coup d'état and an international trade embargo. These conditions, coupled with systematic lack of counterpart funds, led to substantial delays and hampered implementation. More fundamentally, these conditions raise questions about the relevance of the project at the time of appraisal and whether the project should have been restructured during implementation in light of the country's governance situation.

The physical objectives were achieved in the road subsector and resulted in improved roads. The construction of new bridges and drainage removed important bottlenecks to road transport particularly for rural areas. However, due to complete lack of maintenance and to traffic by heavy, overloaded vehicles, five years after completion the rehabilitation works the Gonaives-Cap Haitien road has deteriorated. Labor intensive works executed by small and medium contractors were successfully implemented. The ship repair facilities and training center were not built, mainly due to lack of coordination among government agencies. The institutional strengthening objectives were not met. Although studies were carried out by consultants to strengthen key road and maritime agencies, their recommendations could not be put into practice during this period of political instability. Progress in achieving institutional objectives was significantly hindered by the country’s governance conditions throughout the project period.

The ICR reestimated economic rate of return at 31 percent (versus 39 percent at appraisal). The reestimated return appears to be overly optimistic since, the economic analysis does not take into account the deteriorated conditions of the Gonaives - Cap Haitien road.

OED rates project outcome as marginaly unsatisfactory, institutional development impact as negligible, sustainability as unlikely, and Bank performance as unsatisfactory. These ratings are in line with those of the ICR.

The main lessons of this project are: (a) in countries faced with extremely difficult governance conditions, the relevance of a project needs to be examined carefully, at appraisal as well as continuously during implementation; (b) experience from previous troubled projects in the transport sector, notably on the institutional risks, was ignored at the identification-appraisal stage and resulted in a poor assessment of the country’s institutional capacity to implement the project; (c) where weak macroeconomic management cannot guarantee adequate budgetary allocations for road maintenance, establishment of a road fund financed from earmarked user charges should to be considered in order to preserve project-financed assets.

The ICR is candid in its assessment of project achievements and Bank performance and is, overall satisfactory. However, the plan for the future operation of the project, prepared by the Borrower, fails to provide assurances that the financial resources required to maintain the project assets will be in place when needed.

No audit is planned.

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