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Implementation Completion Report (ICR) Review - Highway Management P

1. Project Data:   
ES Date Posted:
Project Name:
Highway Management P
Project Costs(US $M)
 198.7  212.87
Loan/Credit (US $M)
 150  150
Sector, Major Sect.:
Cofinancing (US $M)
L/C Number:
Board Approval (FY)
Partners involved
Closing Date
06/30/1999 06/30/2000
Prepared by: Reviewed by: Group Manager: Group:  
Kavita Mathur
Soniya Carvalho Alain A. Barbu OEDST

2. Project Objectives and Components:

a. Objectives
The main objective of the project was to improve the quality of the vitally important arterial highway network and thereby to reduce transport costs and increase the country's economic competitiveness. The project would: (a) support selected subprojects included in the arterial highway investment plan for 1990-96; (b) institute a nationwide road management system to improve the planning, budgeting and implementation of works; (c) encourage private sector participation in road maintenance; (d) strengthen capabilities of sub-sector staff; (e) improve the effectiveness of the Philippines construction industry.

b. Components
To achieve the objectives described above, the project included the following components:

  • Technical assistance for the development and implementation of a management system for annual and multi-year programming and budgeting of road and bridge works;
  • Civil works to upgrade, rehabilitate, strengthen or resurface about 1,400 km of arterial highways;
  • Consulting services to assist the Department of Public Works and Highways (DPWH);
  • Consulting services to assist the Construction Industry Authority of the Philippines (CIAP) to carry out studies and implement measures to strengthen the construction industry.
Revised Components
    1. The scope of the civil works component was substantially decreased. The total length of the road to be rehabilitated/upgraded was reduced from 1,400 km to 717 km.
    2. The scope of the TA to DPWH for development of road management systems to improve planning, programming and budgeting was expanded to review and revise all of DPWH business processes along with the development of computerized tools.
    3. After the mid-term review, the terms of reference for the consulting service to assist CIAP were revised. However, this component was later dropped.

c. Comments on Project Cost, Financing and Dates
The actual cost of the project is US$212.8 million compared to appraisal estimate of US$198.7 million. The loan was fully disbursed. The Government counterpart funds increased from US$48.5 million to US$62.7 million. The project closed on June 30, 2000, one year after the original closing date.

3. Achievement of Relevant Objectives:

1. The objective to improve the quality of the arterial highway network was partially achieved. The project supported rehabilitation of 600 km or 84% of the revised physical targets. The IRRs for most sub-projects are in the range of 20 to 40%. 2. Most of the institutional objectives were met.
  • First phase of the 'Road Information and Management Support System' (RIMSS) was carried out. The recommendations of RIMSS were grouped into 60 'Business Improvement Implementation Projects' (BIIPs). Of these, 37 BIIPs have been identified as of "high priority".
  • An Executive Management Information System and a Contract Preparation System are being implemented.
  • Better Roads Philippines Study was undertaken to evaluate and recommend options for the institutional reform of road management and financing. The study contributed to the creation of Road Fund in June 2000 for road maintenance, safety and pollution control.
  • Training was provided to improve: (a) the quality control performance of the Quality Assurance Unit, and (b) the skills of resident and field engineers with regards to road construction, maintenance and management techniques.
  • DPWH capacity to conduct environmental impact assessment was substantially improved.
3. Private sector participation in road maintenance has considerably increased.

4. Significant Outcomes/Impacts:

The project initiated institutional and policy reforms to improve the planning, design, implementation and maintenance practices in the road sector. Better Roads Philippines Study was undertaken to evaluate and recommend options for institutional reform of road management and financing. A road fund, based on road user charges for road maintenance was established.

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

Quality at entry was weak. The original program for rehabilitation of 1,400 km of arterial roads was too ambitious. Technical designs for the physical road investment components were inadequate and underestimated the costs. Engineering designs for all sub-components had to be updated. It took almost two years after the loan approval to complete the designs and prepare the bidding documents for the first package of sub-projects.
  • Implementation of civil works contracts faced delays in provision of counterpart funding, slow procurement approval process, difficult and slow land acquisition process, poor performance of contractors, and weak performance of supervision consultants. Three contracts for 89 km of roads were terminated due to deficient performance of the contractors.
  • The total cost of design and supervision services was high, amounting to US$23.6 million compared to the original staff appraisal report estimate of US$16.4 million.
6. Ratings:ICROED ReviewReason for Disagreement/Comments
SatisfactoryModerately Satisfactory
  • Only 84% of the revised physical targets and 43% of the original targets were met.
  • Consulting services to assist CIAP, as revised in the mid-term-review, were not carried out.
Institutional Dev.:
Bank Performance:
SatisfactorySatisfactoryQuality at entry was unsatisfactory, resulting in major changes in project components and causing major start-up delays. Bank performance during supervision substantially improved.
Borrower Perf.:
Quality of ICR:

7. Lessons of Broad Applicablity:

The project confirms the following OED lessons:
      • Successful implementation of institutional and policy reforms requires: (i) ability and flexibility to adapt to changing circumstances; (ii) sustained commitment by senior management for reform; and (iii) use of consultants with local knowledge to assist with the implementation of complex reforms.
      • Quality at entry for physical objectives depends upon: (i) full appraisal of scope and size of civil works program; and (ii) better estimation of construction costs.

8. Audit Recommended?  Yes

          Why?  To confirm ICR findings.

9. Comments on Quality of ICR:

The quality of ICR is satisfactory. It covers all the relevant issues relating to the implementation experience and the outcome of the project.

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