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Implementation Completion Report (ICR) Review - Transport Project

1. Project Data:   
Project ID:
Project Name:
Transport Project
Highways, Transportation
L/C Number:
Partners Involved:
EBRD, EIB, EU (Phare Program)
Prepared By:
Hernan Levy, OEDST
Reviewed By:
Gregory Ingram
Group Manager:
Gregory Ingram
Date Posted:

2. Project Objectives, Financing, Costs, and Components:

Objectives To improve the economic and financial performance of the transport sector, while helping reduce the role of the state, to increase the role of the private sector, and to introduce competition in the public works market.

Components (i) rehabilitation of about 1,000 km of national roads and related bridges
(ii) improvement of border posts
(iii) material and equipment for road safety, road maintenance, vehicle inspection and training
(iv) technical assistance and training for studies and human resource development in areas such
as axle control, equipment management, maintenance by contract
(v) railway investment urgently needed, notably track maintenance, data processing and spare parts.

Costs $454 million actual, $405 million at appraisal

Financing World Bank $120 million, EBRD $80 million, EIB $80 million, Eu-Phare: $23 million. The WB, EBRD and EIB contributions were as expected at appraisal, while the EU-Phare contribution was not originally contemplated. The WB loan was approved on April 30, 1993 and closed on December 31, 1998, the original closing date. The loan was fully disbursed.

3. Achievement of Relevant Objectives:

The objectives were achieved and the loan was disbursed ahead of schedule. The rehabilitation of 924 km of roads significantly improved the condition of the national road network. Economic analysis was introduced as a standard requirement in highway investments, and the project-financed investments had economic returns ranging from 23 to 54 percent. A Road Fund fed with revenues from highway uses was established and is working satisfactorily. The highway organization became leaner and more effective as the regional maintenance divisions were corporatized. Competition in the roads markets improved significantly as road maintenance was shifted in large measure (nearly completely for periodic maintenance operations) from in-house to contract. The new vehicle inspection equipment is being used effectively to conduct annual inspection of vehicle's mechanical condition and emissions, and to recertify privately-operated control stations. The railway investments were useful to prepare the railway for its subsequent restructuring into five autonomous companies under a follow-on railway project.

4. Significant Outcomes/Impacts:

In only five years, a brief period of time in the institutional and policy scale, significant institutional reforms were accomplished. The Road Fund was created and underwent several fine-tuning during this period. Today, funded by a well-balanced mix of earmarked levies on gasoline, diesel, vehicle's first registration and capacity of freight vehicles, it provides substantial funding for road maintenance expenditures, while approximately covering costs. The corporatization of all 8 regional maintenance units of the highway agency is a major achievement, even possibly too fast given the complexities of this process as large numbers of highway personnel are taken off government payrolls and now depend on the corporations' business and revenues.

5. Significant Shortcomings (include non-compliance with safeguard features):

Engineering designs prepared by the (then) national road engineering company were not up to standards and caused problems during construction.

6. Ratings:ICROED ReviewReason for Disagreement/Comments
SatisfactoryHighly Satisfactory
    Achievements in the institutional/policy area were major. While it is impossible to attribute all achievements to project-induced activities, the project was instrumental.
Institutional Dev.:
Bank Performance:
Borrower Perf.:
SatisfactoryHighly Satisfactory
    On time execution, satisfactory quality, faster than expected disbursements and major ID achievements in a sector the Borrower had no recent experience with Bank operations warrant the highest rating.
Quality of ICR:

7. Lessons of Broad Applicablity:

Two key lessons:
-difficult institutional reforms such as creating a Road Fund, corporatizing maintenance agencies and contracting out maintenance activities can be done in a short period when led by strong political leader, find support in the central ministries, and are designed and implemented by a well qualified team
-fast implementation can be achieved when it is led by a highly professional agency empowered to implement the project reporting to, but not controlled by, the line ministry.

8. Audit Recommended?  Yes

          Why?  Learn from successful first project in the sector after a long lending hiatus.

9. Comments on Quality of ICR:

The ICR is satisfactory.

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