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Implementation Completion Report (ICR) Review - Secondary and Regional Roads Rehabilitation

1. Project Data:   
ES Date Posted:
Project Name:
Secondary and Regional Roads Rehabilitation
Project Costs(US $M)
 49.1  38.9
Loan/Credit (US $M)
 31.5  25.6
Sector, Major Sect.:
Rural Roads,
Cofinancing (US $M)
 0  0
L/C Number:
Board Approval (FY)
Partners involved
Closing Date
06/30/1998 12/30/1999
Prepared by: Reviewed by: Group Manager: Group:  
Kavita Mathur
Binyam Reja Alain A. Barbu OEDST

2. Project Objectives and Components:

a. Objectives
The main objectives of the project were:

  • to preserve and strengthen the administrative and operational capabilities of General Directorate of Roads (DGC) initiated under the previous bank project (Loan 1846-GU);
  • to rehabilitate and maintain damaged secondary and regional roads of key economic importance;
  • to promote the role of private sector in the execution of public works; and
  • to assist in enhancing capabilities of Ministry of Communications, Transport and Public Works (MCTOPs) for transport planning and policy-making.

b. Components
The project had six components: (i) secondary road rehabilitation and improvement; (ii) Altiplano road rehabilitation and strengthening; (iii) construction of bridges for secondary and tertiary roads; (iv) road maintenance and miscellaneous equipment; (v) training; and (vi) technical assistance and studies. Revised Components.
The project was reformulated in May 1993 and substantial changes were made to the project scope. The objectives of the project remained unchanged. The length of the road to be rehabilitated was reduced to take into account the additional road deterioration that had occurred during the five years lag between project approval and implementation. The design standards for secondary roads were substantially revised, thereby, increasing the unit costs of works. This changed the scope of the project and resulted in the reallocation of resources from unpaved roads to paved roads.
The nature of other components was left unchanged.

c. Comments on Project Cost, Financing and Dates
The final cost of the project is US $ 38.9 million against appraisal estimate of US $ 49.1 million. The Bank disbursed US $ 25.6 million and US$ 5.9 million was cancelled. The loan was appraised in September 1987, approved by Board in December 1988, signed on May 21 1993 and implemented on November 17 1993. The five year lag between approval and implementation was due to the overall suspension of disbursements to Guatemala. The project closed on December 30 1999, eighteen months after the original closing date.

3. Achievement of Relevant Objectives:

The project achieved all of its major objectives. The project assisted in strengthening the institutional capacity of DGC and Ministry of Communications, Infrastructure and Housing (MICIVI). DGC introduced a system of financial administration and cost accounting to streamline cost control procedures. Under the project National Transport Plan was prepared to assist in transport planning and policy-making. A road fund was started to finance maintenance of roads and Road Maintenance Unit (COVIAL) was created to manage the road fund. HDM model was introduced for formulation of investment program.
The physical targets were largely met. Rehabilitation of roads was fully implemented except for the following segments: (a) Los Encuentros - Cuatro Caminos was canceled due to procurement problems, and (b) Escuintla - Antigua section of RN14 was canceled because of resettlement problems.
The project promoted private sector participation in the execution of public works. Most of the road maintenance works were outsourced to the private sector. Government supported private sector participation by creating Unidad de Concesiones y Desincorporation (UCD) to deal with matters relating to concessioning of highways to private sector. The contract for Palin - Escuintla - Puerto Quetzal section of the highway was awarded to the private sector.

4. Significant Outcomes/Impacts:

A National Transport Plan was prepared to improve transport sector planning.
  • A road fund was created, with money received from the fuel taxes, to finance maintenance activities.

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

The main shortcomings of the project are the cancellation of some civil works component because of problems in procurement and resettlement.
6. Ratings:ICROED ReviewReason for Disagreement/Comments
Institutional Dev.:
    ID impact warrants a substantial rating versus high in the ICR because the strengthening of DGC is limited to Coordinating Unit for external funding (former Project Coordination Unit).
Highly LikelyLikely
    The Road Funds ability to provide adequate and stable funding has yet to be tested.
Bank Performance:
Borrower Perf.:
Quality of ICR:

7. Lessons of Broad Applicablity:

The ICR identifies the following lessons: (i) implementation of institutional reforms requires full commitment from senior management of the government; and (ii) government can successfully outsource maintenance activities to the private sector.

8. Audit Recommended?  No


9. Comments on Quality of ICR:

The ICR quality is Satisfactory. A more detailed discussion on institutional and financial reforms would have been useful.

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