|1. Project Data:
ICR Review Date Posted:
|Papua New Guinea|
|Road Maintenance And Rehabilitation Project
Project Costs(US $M)
Loan/Credit (US $M)
Cofinancing (US $M)
Board Approval Date
|Roads and highways (80%), Central government administration (11%), Sub-national government administration (9%)|
|Rural services and infrastructure (25% - P)
Infrastructure services for private sector development (25% - P)
Decentralization (24% - P)
Participation and civic engagement (13% - S)
Small and Medium Enterprise support (13% - S)|
||ICR Review Coordinator:
|2. Project Objectives and Components:|
a. Objectives:“To assist the Borrower in promoting an efficient, safe and reliable roads transport system in the participating provinces through: (a) the improvement of reliable roads transport system in the participating provinces through: (a) the improvement of selected road segments; (b) strengthening strategic planning and management of the road sector; and (c) strengthening the institutional arrangements for road maintenance, including private sector participation.” (Loan Agreement, Schedule 2, and PAD p. 2)
b. Were the project objectives/key associated outcome targets revised during implementation?
c. Components:With the Additional Financing (AF) of US$37.3 million approved on April 26, 2007, the original project components and the additional activities were as follows:
1.Road maintenance and rehabilitation of national roads (total estimated cost US$55.42 million, total actual cost US$ 76.48 million). The original component was to finance annual routine maintenance on about 2,200km and restoration of about 440km of national roads (original estimated cost US$26.70 million, original actual cost US$35.62 million). The additional financing (AF) was for the routine maintenance of about 200km national roads and the rehabilitation of about 200km national (AF estimated cost US$28.72 million, AF actual cost US$40.86 million).
2.Road maintenance and rehabilitation of provincial roads (total estimated cost US$10.52 million, total actual cost US$12.41 million ). The original component was to finance routine maintenance on about 900km and restoration of about 200km of provincial roads in six provinces (original estimated cost US$7.55 million, original actual cost US$9.64 million). The AF was to finance routine maintenance of about 50km and the restoration of about 20km of provincial roads (AF estimated cost US$2.97 million, AF actual cost US$2.77 million).
3. National bridges (total estimated cost US$16.46 million, total actual cost US$ 9.19 million). The original component was to finance the maintenance, rehabilitation and replacement of national bridges (original estimated cost US$8.7 million, original actual cost US$ 5.12 million). The AF was to finance the maintenance or rehabilitation of about 30 national bridges (AF estimated cost of US$7.76 million, AF actual cost was US$4.07 million).
4. Provincial bridges (total estimated cost US$5.67 million, total actual cost US$ 0.52 million). This component was to finance the maintenance, rehabilitation and replacement of bridges on provincial roads. There was no AF for this component.
5. Implementation support (total estimated cost US$13.99 million, total actual cost US$11.1 million). This component was to finance the consulting services and equipment to support project implementation (original estimated cost US$7.88 million, original actual cost US$5.39 million). The AF was for further implementation support (AF estimated cost US$6.11 million, AF actual cost US$5.71 million).
6. Road sector support (total estimated cost US$2.24 million, total actual cost US$2.95 million). This component was to finance improvement of institutional capacity of Department of Works and the capacity of small-medium sized contractor for road maintenance operations (original estimated cost US$2.29 million, original actual cost US$1.93 million). The AF provided further road sector support (AF estimated cost US$1.01 million, AF actual cost US$1.02 million).
d. Comments on Project Cost, Financing, Borrower Contribution, and Dates
Project Cost: The original estimated project cost was US$59.18 million. In 2007, an additional financing (both the Bank and Borrower amounts combined) of US$53.95 million was provided. The actual total project cost was US$112.65 million.
Project Financing: The Bank approved US$40 million IBRD loan for the original project with US$39.97 million disbursed; and US$37.3 million IDA credit for the additional financing with US$24.24 million disbursed at project completion.
Borrower Contribution: The original Borrower contribution commitment was for US$25.07 million, Under the additional financing, the Borrower contribution commitment was for US$21.6 million. The actual total contribution from the Borrower was US$35.13 million.
Project Closing Date: The original project closing date was December 31, 2006 and the actual closing date was June 30, 2012. There were four extensions of the project closing date, two of them were for the original project, which was a loan and two extensions were for the additional financing, which was a credit. Details are as follows:
- The first extension was for 12 months to December 31, 2007 to compensate for earlier delays in project implementation as a result of slow counterpart funding provision, lack of familiarity with the Bank procedures and slow response from some participating provinces;
- The second extension was for 24 months from December 31, 2007 to December 31, 2009 when AF of US$37.3 million was approved with a closing date of December 31, 2009.
- The third extension was for 24 months from December 31, 2009 to December 31, 2011 to accommodate delays of project implementation due to the longer than expected time spent to get the National Executive Council's approval of new Employer's Project Manager contract for the project and the lengthy visa approval time for the consultant.
- The fourth extension was 6 months from December 31, 2011 to June 30, 2012 in order for the Government to disburse all the available bank credit funds.
|3. Relevance of Objectives & Design:|
a. Relevance of Objectives:Rated: Substantial
The project objectives were relevant to the Government strategy and Bank's Country Assistance Strategy (CAS 19590-PNG) for Papua New Guinea at the project preparation stage. In the Government Medium-Term Development Strategy (1997-2002, “A Bridge Into the 21st Century”), the Government called for a stronger role of local governments in the provision of public services (PAD p.5). The sector-related CAS (19590-PNG ) objective also focused on "improving the quality and reliability of the country's infrastructure, particularly the provincial and rural road network, to allow for more cost-effective movement of goods and services and to promote economic development in rural areas".
The project objectives remain relevant to the Bank's more recent FY08-11 CAS which identified that one of seven pro-poor expenditure priorities is "rehabilitation and maintenance of transport infrastructure", which is fully supported by the project. They also remain relevant to the Papua New Guinea Medium-Term Development Plan 2011-2015 that sets a goal of having 25,000km of national roads in good condition by 2030. This plan also states that there is need to provide more funding to the sector to encourage private sector participation to achieve that goal (ICR p15).
b. Relevance of Design:Rated: Substantial
The project design focused on three kinds of actions: i) physical investments in selected national and provincial roads to bring them up to good condition; ii) institutional capacity building and management skill improvement in roads management agencies; and, iii) interventions to enhance the contracting industry and promoting the private sector locally. The results chain following these actions was straightforward, logical and well understood by the project designers. In different ways, each of the three kinds of actions would directly contribute to making the road systems more efficient, reliable and safer. These actions would help enable faster and smoother traffic flows; the transport system would be managed more effectively by the road management agencies. In these ways the project development objectives of "promoting an efficient and reliable roads transport system in the participating provinces" would be achieved. Road safety in PNG was undermined by a series of factors including drunken driving, inadequate road safety awareness by drivers and pedestrians, lack of uniform safety standards for traffic engineering and accident black spots, and inadequate enforcement of traffic rules. The project had no stand alone "road safety" component, but it did include activities such as road condition improvements, introducing uniform and engineering standards, and procurement of traffic counting equipment to provide fundamental data on road user usage to inform maintenance priorities, engineering designs and road safety considerations. But the lack of an explicit road safety activity targeting at road safety behavior and awareness was a shortcoming of the project design, that lessened the project's direct contribution to promoting the road safety.
|4. Achievement of Objectives (Efficacy) :|
As reported by the ICR (Annex 2), the main project outputs are as follows:
i) 600km of national roads were restored, short of the original target of 640km;
ii) 447km per annum of national roads were provided with routine maintenance, short of the original target of 750km (revised target of 543km)
iii) 166km per annum of provincial roads were provided with routine maintenance, exceeding the original target of 50km per annum.
iv)174km of provincial roads were restored and maintained short of the original target of 220km;
v) 46 national bridges were rehabilitated and maintained short of the original target of 65 bridges.
vi)79 small and medium domestic contractors were trained;
vii) 45 Department of Works central and provincial level staff trained in six provinces;
viii) Bridge Inventory and bridge management systems were established for sustainable planning and management of bridge assets.
The achievement of the project objective is assessed by considering the performance of each of its three parts as follows:
a) Promoting an efficient road transport system in the participating provinces is rated as Substantial.
A more efficient road transport system could be evidenced by reduced travelling time and lower travelling cost. While the ICR did not explicitly provide data on these variables, the project’s reported positive internal economic rates of return (ERRs), 21% for road upgrading and 60% for road reconstruction did reflect reduced vehicle operating cost and time savings, efficiency gains that were used to measure project benefits.
In addition, a socioeconomic study to evaluate the impacts of project road improvement activities on the project area households' income, access to health and education services and the poverty reduction included the following findings:
services provided within their own villages, or made shortcuts through the bush rather than walking along the
- Visits to local towns and markets by household in the sampled project villages increased between 2004 and 2009 by 70%, against just a 40% increase by households in the sampled control villages (that did not benefit from the project).
- Travelling times for local villagers to health facilities were not affected by the project as villagers used social
- The ICR notes (ICR p.20) that travel time to secondary schools was reduced because the improved roads allow more convenient and faster motor vehicle rides, but does not provide specific evidence of this.
b) Promoting a safe road transport system in the participating provinces is rated as Modest.
At project completion, the ICR (p.18) reported more reckless driving along the improved roads, often under the influence of alcohol. The report did not provide concrete data on road accidents rates on project roads before and after the project, however. Additional information provided by the project team highlighted project interventions that could contribute to improved road safety. For example, before the project, two-way traffic was restricted dangerously to a single unmarked lane with the risk of head-on collisions on some sections. After the project, two separate lanes with edges protected by gabions were established. The project team also informed IEG that the project had improved driver visibility and drainage that had been poor before the project, leading to dangerous driving conditions.
c) Promote a reliable roads transport system in the participating provinces is rated as Substantial.
This IEG assessment considers that improved reliability can be measured by better road conditions that allow uninterrupted access to economic and social services. The ICR (data sheet) reported that overall road condition improved at project completion. The percentage of national roads reported to be in good or fair condition increased from 20% to 74% of the total during 2004-2009. It was also reported by the ICR (p. 18) that prior to the project, the residents of Kerema, the capital of Culf Province did not have all season road access to port Moresby, the nation’s capital. During the rainy season this road was impassable. With the project road improvements the villagers now have year round access to all the services of Port Moresby. The ICR reports (ICR pp. 18 and 41-42) some evidence from the project’s socioeconomic study of villagers enjoying higher incomes, although this cannot be attributed to the impact of the project alone:
i) 82% of the households living in villages close by the rehabilitated roads had monthly income increased as compared with an average of 73% of all the survey households with a increased monthly income;
ii) The percentage of households living below the poverty line (a monthly income of PGK500 or less) along the rehabilitated roads decreased from 62 percent in 2007 to 47 percent in 2009, even though the reduction could not be solely attributed to the project.
At project preparation, economic analysis was carried out for all the national roads that would require periodic and specific maintenance (other than routine maintenance) or restoration as well as bridges that required replacement. As reported by the Project Appraisal Document (p. 18), Under the most likely traffic scenario, the Net Present Value (NPV) for the national roads was $36.5 million and average economic rate of return (ERR) was 30 percent, with the highest average ERR of 52% for road regravelling work and the lowest average ERR of 21% for road sealing work. Out of the 18 bridges initially identified, the project financed the 13 that were economically viable. At completion, their total NPV for these 13 viable bridges was $1.6 million. The sensitivity analyses also found that proposed project activities remained viable even with the standard cost increases or reductions in benefit used for such estimates.
At project completion, HDM4 model was applied for the economic analysis for the road works under the project, ERRs for all road works were higher than 12%. The analysis showed that the highest average ERR was 60% for roads reconstruction and the lowest average ERR was 21% for roads sealing works. The variations of ERRs were mainly due to the cost changes for road works. In these cases, the actual road reconstruction costs were lower than those estimated, hence, generating higher ERRs. Conversely, road upgrading works had higher actual costs resulting in lower, but still adequate rates of return. The efficiency of the project is rated as Substantial.
a. If available, enter the Economic Rate of Return (ERR)/Financial Rate of Return at appraisal and the re-estimated value at evaluation:
* Refers to percent of total project cost for which ERR/FRR was calculated