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Implementation Completion Report (ICR) Review - Strategic Urban Roads Infrastructure Project (SURIP)


  
1. Project Data:   
ICR Review Date Posted:
09/13/2005   
PROJ ID:
P004016
Appraisal
Actual
Project Name:
Strategic Urban Roads Infrastructure Project (SURIP)
Project Costs(US $M)
 167  109
Country:
Indonesia
Loan/Credit (US $M)
 87  87
Sector, Major Sect.:
Central government administration, Sub-national government administration, Roads and highways,
Law and justice and public administration; Law and justice and public administration; Transportation
Cofinancing (US $M)
   
L/C Number:
L4054      
   
Board Approval (FY)
  96
Partners involved
 
Closing Date
09/30/2001 05/31/2003
         
Evaluator: Panel Reviewer: Group Manager: Group:  
Ramachandra Jammi
Peter Nigel Freeman Alain A. Barbu OEDSG

2. Project Objectives and Components:

a. Objectives
(a) reduce traffic bottlenecks on the national road network in selected urban areas in the North Java corridor;

(b) address the environmental and social issues associated with the use of the national road network;
(c) assist the Government of Indonesia (GOI) in the process of decentralization of responsibility for urban transport;
(d) strengthen capabilities of GOI's central and local government agencies involved in urban road development and management; and
(e) assist GOI in the articulation and implementation of an urban transport policy.

These objectives were not revised.

b. Components (or Key Conditions in the case of Adjustment Loans):
Project components and their shares of project costs at appraisal and completion respectively, were as below:

A. Road construction (seven schemes; US$132m; 79 percent and US$84.5m; 79 percent);
B. Urban road management and quality of life improvements (QLI) (four activities; US$32.3m; 19 percent and US$2m; 2 percent);
C. Institutional and human resources development (two subcomponents; US$2.0m; 1 percent and US$2m; 2 percent );
D. GOI urban road program development (one subcomponent US$0.6m; <1 percent and US$1.4m; 1 percent ); and
E. Policy articulation and implementation (two subcomponents; US$0.6m; <1 percent and US$1.3m; 1percent).
F. See "revised components". (US$0m; 0 percent and US$16.4; 15 percent)
Revised Components: A new component F on Road Maintenance for US$17m was added in December 1998 to take care of emergency needs for local roads in Java, in the wake of the East Asian financial crisis, but it was an oversight not to have added another objective at this point.. The Bank contributed US$15m to this component by reallocating funds from a subcomponent of component B, which originally addressed traffic management and related issues. Component D was revised due to lack of funds for future schemes, and its scope restricted to strengthening capabilities in road management rather than road development. The second stage output of component E was revised to focus on policies to assist the local government of Bandung to restructure bus services since, under decentralization, formulation and implementation of urban transport policy became a local government responsibility. A number of amendments were made to the scope of schemes under component A.

c. Comments on Project Cost, Financing, Borrower Contribution, and Dates
Cost and Financing: Final project cost was US$109m against US$167m at appraisal. Bank's actual contribution equalled the US$87m estimated at appraisal. Government of Indonesia (GOI) contributed about US$ 23m which was 30 percent of the US$80m estimated at appraisal.
Dates: The project closed on May 31, 2003, one year and eight months after the original closing date of Sept 30, 2001, following three extensions: first, to Sept 30, 2002, to compensate for the slowdown in implementation due to the financial crisis, and lower counterpart funding; second, to March 31, 2003, to compensate for the lower than anticipated transfer of funds from the Second Highway Sector Loan (HSL 2), and to allow BINKOT (Directorate of Urban Road Development) sufficient time to construct the Cirebon bypass section 2 with a lower level of counterpart funds; third, to May 31, 2003, to allow completion of the works contract for the Cirebon bypass section 2.


3. Relevance of Objectives & Design:

Relevance: The project was identified in 1994 in response to Government of Indonesia’s (GOI) concerns that development of the urban sections of the national road network were not being given sufficient attention in Integrated Urban Development Plans (IUDP) being prepared at the time for urban areas. The corridor in the Province of Central Java was selected as the main geographical focus because it had the most acute congestion problems and because of the preparedness for, and commitment to the project by provincial level agencies. The Country Assistance Strategy (CAS) highlighted the importance of managing infrastructure so as to support private sector development and competitiveness, strengthen capacities at all levels of government, and facilitate the decentralization of responsibilities. An Indonesia Country Study stressed that reducing the rate of growth of congestion and the numbers of vehicles in key urban areas was critical for efficiency and for protecting the health and welfare of the urban population.
Design: The project design also took into account the Bank’s sectoral approach to urban transport, which was to provide assistance through an integrated package of policy, institutional and infrastructure initiatives. The project was not particularly demanding for the implementing agency or risky, but complex in introducing urban transport objectives (c) and (e) into what was otherwise an urban road development project. The pace at which local governments would take up responsibilities based on regulations was underestimated, with the result that no capacity existed at the local level for transport planning, formulating road programs and traffic management at the beginning of the project. This affected components B, C and E.
The quality of detailed engineering design at entry was not as good as assumed. Difficulties in controlling frontage access to the roads suggest that the alternative of building frontage roads in addition to enacting regulations
should have been pursued during preparation.

4. Achievement of Objectives (Efficacy) :

(a) Reduce traffic bottlenecks on the national road network in selected urban areas in the North Java corridor. Substantial. Of the seven towns for which four lane bypasses were proposed, four bypasses were completed as planned, two were revised, and one was not constructed. The six completed bypasses are estimated to attract over 80 percent of through traffic and to operate without congestion over at least 80 percent of their lengths.
(b) Address the environmental and social issues associated with the use of the national road network. Substantial. No Project Affected Person (PAP) was made worse off by activities of the project as measured by the key performance indicator which was clearly defined and measurable to a great extent. Guidelines for formulation and implementation of resettlement plans and Environmental Management Plans (EMP) are now in everyday use by the implementing agency in the design and implementation of road schemes.
(c) Assist GOI in the process of decentralization of responsibility for urban transport. Modest. Training was successfully provided to local government traffic management units (DLLAJ) that were already established in Cirebon and West Java prior to the project. In the project cities in Central Java, DLLAJ were unable to participate in SURIP in a meaningful way because organizational arrangements and staffing took longer to complete than anticipated by central government.
(d) Strengthen capabilities of GOI's central and local government agencies involved in urban road development and management. Modest . The Urban Road Management System (URMS) output from the revised component was satisfactory and ready for implementation in cities. However, the recommendation that a Core Unit be established to support the promulgation of URMS, maintain and support the software, and provide training in its application, has not been acted upon.
(e) Assist GOI in the articulation and implementation of an urban transport policy. Negligible. A Draft Urban Transport Policy Statement was prepared by Consultants in 1999. However, the Draft Statement was not endorsed by National Development Planning Agency (BAPPENAS) or the Inter-ministerial Working Group (IWG) and therefore did not become established as a component of GOI policy. Further, with the major changes in government, the five-year forward planning program (REPELITA VII) was replaced and not continued.

Overall, the institutional development impact was modest. The ability of the project to achieve the optimum institutional benefit was adversely affected by the two Ministerial restructurings that occurred in 1999, and social and political instability due to the financial crisis in 1997.

5. Efficiency:

Economic Rate of Return: Due to the financial crisis and the ensuing unstable exchange rate, estimates of costs and benefits were made using 1996 prices. At appraisal the Economic Rate of Return (ERR) for individual schemes was in a range from 17 percent (Demak) to 30 percent (Kudus). The recalculated ERRs for the first component, range between from 22 to 25 percent, comparing favorably with 17 to 30 percent at appraisal.

Factors that adversely affected the efficiency of the project included the following:
  • The financial crisis and consequently, GOI's reduced ability to provide counterpart funds led to substantial delays in implementation of work by contractors, and several major restructurings.
  • Restructuring of Ministry of Public Works (MPW) created difficulties for staff to maintain continuity in focus and activities. Also, changes in many key personnel at BINKOT led to loss of experienced personnel, and added to delays in work schedules.
  • Requirements for review of all contracts above 10 billion Rupiah by the National Procurement Team in BAPPENAS delayed work by months at a time, until procedures were changed mid way through the project.
  • Earlier land acquisition and more appropriate land use policies may have resulted in substantial savings.
  • The budgeting process was inadequate for multi-year construction projects.
6. M&E Design, Implementation, & Utilization:

The key performance indicators (KPI) were largely measurable and followed from specific investments or actions relating to the objectives. In respect of the second objective relating to environmental and social measures, the KPI -- impact on Project Affected Persons (PAP) -- was clear and measurable, but could not totally account for some QLI outcomes that were difficult to translate into indicators.
7. Other (Safeguards, Fiduciary, Unintended Impacts--Positive & Negative):

The project was placed in safeguard category A due to involuntary resettlement and environmental issues the road schemes. The EA was adequate in identifying sensitive receptors such as schools and community health clinics close to the proposed roads, but less adequate in identifying severance of footpaths and bicycle tracks. As a result, supplementary work to identify and make provision for these paths was required during implementation. On the whole, the project was in compliance with the Bank’s safeguard policies.
  • Financial management and procurement arrangements met the Bank's requirements.

  • 8. Ratings:
    ICR
    OED Review
    Reason for Disagreement/Comments
    Outcome: 
    SatisfactoryModerately SatisfactoryOED rates a project as moderately satisfactory (a rating which does not exist under the ICR's 4-point scale) when it achieves most of its major relevant objectives, but with significant shortcomings. Objectives c and d were modestly achieved; achievement of objective e was negligible.
    Institutional Dev.: 
    ModestModest
    Sustainability: 
    LikelyLikely
    Bank Perf.: 
    SatisfactorySatisfactory
    Borrower Perf.: 
    SatisfactorySatisfactory
    Quality of ICR: 
    Exemplary

    NOTES:
    - When insufficient information is provided by the Bank for OED to arrive at a clear rating, OED will downgrade the relevant ratings as warranted beginning July 1, 2006.
    - ICR rating values flagged with ' * ' don't comply with OP/BP 13.55, but are listed for completeness.

    9. Lessons:

    Small sub-projects stand a higher chance of achieving quick and tangible results if planned, designed and constructed under the responsibility of the local government, and can result in strong local ownership.
    • Decentralization is a complex process and technical assistance can help best when staffing and administrative steps in the target instutions have been completed.
    • All functions may not be amenable to decentralization, such as functions which can only be performed at a national level including formulation and updating of technical standards and guidelines, or policy frameworks.
    • For any major project involving senior, regional and local government officials, it is essential that the Project Manager have a line position at a senior level within the executing agency to deal effectively with counterpart government officials.

    10. Assessment Recommended?  No

              Why?  

    11. Comments on Quality of ICR:

    The ICR is rich in detail and provides a commendably open, objective and analytical description of the project. It is written in a clear and orgnaized manner. It focuses clearly on the impacts corresponding to the objectives and links them clearly to the outcomes of components. The project ratings are realistic and supported by convincing reasoning. The basis for economic cost-benefit analysis is particularly commendable, with important assumptions specified clearly and in appropriate detail. Factors that were subject to borrower/implementing agency are objectively analyzed and related. The ICR contains an informative summary of the borrower’s report. The lessons drawn from the project are substantive and clearly stated. The document complies with the guidelines for preparation of ICRs. The ICR is rated Exemplary.

    (ES-Rev4-Jul/05)
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