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Implementation Completion Report (ICR) Review - Ar Santa Fe Road Infrastructure


  
1. Project Data:   
ICR Review Date Posted:
03/24/2014   
Country:
Argentina
PROJ ID:
P099051
Appraisal
Actual
Project Name:
Ar Santa Fe Road Infrastructure
Project Costs(US $M)
 173.10  176.50
L/C Number:
L7429
Loan/Credit (US $M)
 126.70  126.70
Sector Board:
Transport
Cofinancing (US $M)
   
Cofinanciers:
Board Approval Date
  02/13/2007
 
 
Closing Date
06/30/2012 06/30/2012
Sector(s):
Roads and highways (99%), Central government administration (1%)
Theme(s):
Infrastructure services for private sector development (33% - P) Injuries and non-communicable diseases (17% - S) Trade facilitation and market access (17% - S) Administrative and civil service reform (17% - S) Environmental policies and institutions (16% - S)
         
Prepared by: Reviewed by: ICR Review Coordinator: Group:
Peter Nigel Freeman
Kristin Hallberg Christopher David Nelson IEGPS1

2. Project Objectives and Components:

a. Objectives:

The objectives of the Project in the loan agreement (page 6, schedule 1) are to: (a) improve the transport conditions of the segment of National Route 19 located within the Borrower’s territory, which links the same with regional and international markets; and (b) strengthen the Borrower’s institutional capacity to: (i) improve road safety; (ii) identify transport infrastructure and trade facilitation constraints, through the establishment of a mechanism to measure logistics costs so as to reduce the same; (iii) foster territorial planning; (iv) assess and manage environmental and social impacts resulting from the execution of large civil works; and (v) monitor and evaluate the execution of large infrastructure investments.

The wording in the PAD is longer and refers specifically to the Province of Santa Fe, but in essence has the same meaning. For this review the more concise wording in the loan agreement is used.

b. Were the project objectives/key associated outcome targets revised during implementation?
No

c. Components:

1) Upgrading of Route 19; (appraisal estimate US$123.90 million [including contingencies]; at closure US$125.40 million).
This component is to upgrade 130 kilometers of NR 19 between the town of Santo Tomé in the Province of Santa Fe (PSF) and the border of the Province of Córdoba into a four-lane highway with separate two lane carriageways in each traffic direction to expand the capacity and road safety of this heavily traveled corridor. The component also provides for the construction of three four-lane bypasses along NR 19, straightening three sharp curves on the existing two-lane highway, grade separation interchanges at intersections with high traffic roads and overpasses for railroad crossings, ground-level interchanges at the intersections with rural and urban roads, as well as construction of urban boulevards in San Jerónimo de Sauce and San Pereyra, and turn and return lanes at intervals of 6 km. each.

2) Institutional Strengthening; (appraisal estimate US$2.80 million; at closure US$0.97 million).
Road Safety: Implement a pilot intervention along Provincial Road 21 (PR 21), including two types of road safety interventions: (i) hard: including vertical and horizontal signaling, shoulders, bus bays, and pedestrian bridges; and (ii) soft: including the purchase of alcohol testing equipment and programs to train provincial inspectors to improve overall enforcement of road safety legal provisions.
Systemic measurement of logistic costs in the PSF: This sub-component included the following activities: (i) support creation of a Logistics Unit within the provincial administration; (ii) train provincial staff in logistics issues; (iii) conduct surveys to measure costs in the PSF and complementary studies to identify infrastructure and trade facilitation constraints; as well as (iv) dissemination of the findings in workshops organized jointly with the private sector.
Strengthening the planning capacity of the PSF to prepare a new strategic development plan/foster economic growth: This sub-component originally envisaged the financing of studies to (i) conduct a diagnostic assessment of the current institutional set-up with an evaluation of the performance of each agency having planning responsibilities; (ii) develop a framework listing all activities and a roadmap to produce a strategic development plan; and (iii) propose an information sharing system for planning purposes to be implemented in the PSF.
Strengthening DPV’s capacity to enhance the environmental and social management of large civil work projects: This sub-component was aimed at strengthening DPV’s environmental unit to carry out effective planning, design, and supervision of environmental and social aspects of civil work. Activities envisaged included training for relevant staff, preparation of manuals, purchase of equipment, and preparation of a Strategic Environmental Assessment (SEA).
Design a capacity-building program to incorporate monitoring and evaluation analysis in infrastructure projects: This sub-component was requested by the PSF to improve provincial capacity in the area of monitoring and evaluation, with the Project Management Unit (PMU) being the original recipient of training in this area.

The project underwent a minor restructuring in April 2008 to apply the Bank’s new pricing policy to the loan, including the deletion of the commitment charge, the inclusion of the front-end fee, and the corresponding reallocation of funds under the project’s cost table to accommodate the front-end fee, as well as the elimination of interest waivers. A second minor restructuring was undertaken in May 2011, reallocating all funds under the unallocated category (approximately US$20 million) to Component 1.

d. Comments on Project Cost, Financing, Borrower Contribution, and Dates

Project cost: The project cost was estimated at appraisal to be US$173.10 million while the actual cost was US$176.50 million.
Financing: An IBRD loan of US$126.70 million was approved and fully utilized. The project was part of an agreement between the Bank and the Government of Argentina to cancel undisbursed tranches from outstanding development policy loans and prepare new investment loans (PAD page 10).
Borrower contribution: At appraisal the estimated figure was US$46.40 million. The actual figure at completion was US$49.80 million.
Dates: The project closed as originally scheduled on June 30, 2012.


3. Relevance of Objectives & Design:

a. Relevance of Objectives:
High
The project objectives are highly relevant, They are in line with the 2010–2012 Country Partnership Strategy, which is founded on the same three pillars as the previous Country Assessment Strategy (CAS) 7 - particularly under the "Sustainable Growth with Equity" pillar, whose specific objectives include: (i) upgrade Argentina’s infrastructure to address potential bottlenecks to competitiveness, and underpin medium-term growth and poverty alleviation; (ii) improve competitiveness, quality, and exports of agriculture and livestock production; and (iii) address a growing problem of resource degradation. This was the first direct lending operation to the Province of Santa Fe by the Bank, and was one of only three loans to sub-national governments, guaranteed by the national government, under the previous CAS.

By focusing on a strategic transportation and logistics corridor, accounting for 20 percent of the Argentine population and 40 percent of total agricultural and livestock activity, the project was directly aligned with the Government's strategy. In addition, the project aimed to meet the province's request to improve its institutional capacity in respect of road safety, logistics, environmental and social impacts and monitoring and evaluation capability.

b. Relevance of Design:
Substantial
The project design was realistic, with components directly aligned to the clear development objectives of improving transportation conditions along an important road corridor linking the province with regional and international markets, and providing institutional support to the province in clearly identified areas. Additionally, the project was designated as a “green road.” This meant that project design also addressed issues of concern to the province such as resource degradation through a landscaping and reforestation program included in the Environmental Strategy Management Plan (ESMP). The results framework presented in the PAD was satisfactory, but some confusion arose after the PMU contracted the National University of Cordoba to extend the framework beyond the monitoring framework already included in the PAD. This resulted in some variance between the indicators and methodology used by the university and normal Bank practice.


4. Achievement of Objectives (Efficacy) :

Upgrading of NR 19 Substantially achieved.
The main project component, the upgrading of NR 19 was for the most part completed on time, with no cost overrun or extension to the project loan closing date, with 132 km. upgraded under the project opened to traffic. Only three km. within the urban area of Santo Tome remained unfinished, where work is still underway financed by provincial funds. The project was technically complex and included the construction of bypasses, no less than 15 new bridges at railroad crossings, and other critical points of intersection, traffic distributors, roundabouts at crossings and returns, as well as a series of water and drainage works. One of the measures of achievement was to reduce travel time by at least five percent. The results show that travel times were reduced by between eight and 29 percent on different sections of the highway. In addition the project was expected to show an improvement in the rate of fatal accidents over the results for the province as a whole. From 2007-2012, the Provincial figures showed a 13.6 percent increase in road linked fatalities, while on NR19, road linked fatalities decreased significantly by 73.3 percent during the same time period.
Institutional Strengthening Modestly achieved.
The cost of institutional strengthening measures was relatively small in comparison to the construction works, but they were important enough for each to warrant a specific mention in the project development objectives. Much of the cost of the institutional measures was in practice funded under the borrower contribution. At closure only one of the five sub-components under this objective had been completed (road safety); three sub-components were mostly completed, but some work or activities were still outstanding; and for one sub-component no activities had been undertaken. The focus had clearly been on the upgrading component and it appeared that some of the institutional strengthening activities commenced rather late. This was confirmed in discussions with the TTL.
Hard and soft road safety interventions in pilot areas (PR 1 and PR 21).
The pilot road safety interventions were completed in 2010, These included vertical and horizontal signaling, improvement of shoulders, construction of bus bays, defenses and barriers at dangerous curves, construction of a roundabout in a blind spot, installation of speed reducers, installation of traffic lights, construction of pedestrian bridges, bike paths, and provision of illumination. Regarding soft interventions, a series of measures including the purchase of vehicles and equipment for alcohol testing, training programs for police and teachers, the preparation of a monitoring and evaluation manual, and a series of consultancies for traffic management and mapping of risks, were also completed. Some of the originally identified interventions were slightly modified to accommodate requests by municipalities along PR 21. While the work has been completed and the alcohol testing program is operational, it is too early to measure any improved effectiveness through road safety statistics.
Logistics Unit to be established and logistics costs measured.
A comprehensive logistics assessment was carried out by the province under this sub-component. The first phase enabled the province to undertake an analysis of logistics, identify key strengths and weaknesses, articulate a vision and the needs to be fulfilled in order to optimize further progress. The second phase involved preparing proposals on potential actions that should be undertaken by the province to enhance efficiency in the sub-sector, including a proposed organizational chart for a planned Logistics Observatory, together with its functions, and the instruments required for its implementation. This consultancy was undertaken with broad participation through consultation and over 60 interviews were conducted with various entities within the private and the public sectors, as well as a series of communication and consultation workshops to validate the results of the study. However, the actual implementation of the Logistics Unit was not completed before closure, although the studies were finalized in July 2012.
Assessment of the provincial capacity to produce a strategic development plan
The Strategic Plan for the province included as one of its projects the rehabilitation of “Puerto Ocampo,” located 20 km. from the City of Villa Ocampo. The proposal under this sub-component was to undertake a planning exercise within the entire district of Villa Ocampo, anticipating future developments. Delays were experienced in the initiation of this task, but four consultants were eventually hired to undertake the activity in March 2012, and the work was carried out between April and June 2012, with the approval of the final products extending beyond the project’s closing date. However this pilot is now to be extended to other localities within the province, enabling consolidation of the province’s experience in terms of strategic planning.
Capacity of provincial environmental unit to be strengthened.
Human resource changes in the early stages of project implementation made the initiation of activities
under this sub-component difficult, leading to initial delays. However, provision of equipment to the unit and the training program were completed prior to the project’s closing date. Regarding the Strategic Environmental Assessment, delays were also seen in the initiation of this activity. An Inter-Ministerial Coordination team was established in March 2009 and the activity was officially launched in September 2010. Notwithstanding, the actual execution process started only in January 2012, when the contracted consultants effectively commenced their work. Despite efforts to conclude this task prior to project closing, this was not possible, with only the diagnostic phase of the work being completed by June 2012. The subsequent phases and payments were undertaken by the province. Currently the final report is being reviewed by the PMU.
Management Unit knowledge of monitoring and evaluation techniques to be increased.
No activities were undertaken under this sub-component.

5. Efficiency:

Substantial

At appraisal, net economic benefits were evaluated using the Highway Development and Management Model (HDM-4), Version 1.3, which simulates life cycle conditions and costs and provides economic decision criteria for multiple road design and maintenance alternatives. Results of the project’s original cost-benefit analysis estimated the net present value of the road work at US$67.1 million, using a 12 percent discount rate over a 28 year
evaluation period, while the Economic Rate of Return (ERR) was 19.3 percent.

An ex-post economic evaluation was performed in April 2013 on work executed for the conversion of NR19 into a four lane road, using the same methodology applied at appraisal, and running the same HDM program. Many of the assumptions used to carry out the ex-post evaluation were identical to those used under the original evaluation, but the ERR was lower for several reasons: (i) the ex-post economic evaluation was based on the five road segments under which the works were adjudicated and executed, whereas the original evaluation was based on only three road segments; (ii) the ex-post evaluation did not include the 2.4 km. extension for the urban segment of Santo Tome because it was subject to considerable modifications vis-à-vis the original design, during implementation, which were not contemplated under the original economic evaluation; and (iii) traffic levels used (up to 2012) were those provided by Argentina's National Highways Authority (DNV), which differed from the rough traffic estimates made in the original evaluation. The original evaluation also assumed growth in traffic from year one onwards, when in fact during the construction period, due to traffic deviations, there was no significant growth.
Nevertheless, the 12.4 percent ERR is still acceptable being above the threshold of 12 percent. Although it is intended that this road will eventually become a toll road no financial rate of return (FRR) was provided. Despite potential delays caused by the Inspection Panel inquiries, the project was, however, completed on budget and on time.

Most of the institutional supporting activities were commenced late and only one was complete at closure. Presumably since the road safety improvements were pilot projects their effect will in due course be measured in terms of changes in the accident rate and the University of Cordoba has been appointed to undertake this task. However, at closure the improvements had only just been completed and no "before" and "after"results had been analyzed.

a. If available, enter the Economic Rate of Return (ERR)/Financial Rate of Return at appraisal and the re-estimated value at evaluation:


Rate Available?
Point Value
Coverage/Scope*
Appraisal:
Yes
19.3%
97.8%
ICR estimate:
Yes
12.4%
99.2%

* Refers to percent of total project cost for which ERR/FRR was calculated

6. Outcome:

The review rates high relevance of objectives, substantial relevance of design and substantial efficiency. There were two objectives. The first and by far the largest was substantially achieved, while the second was modestly achieved by closure. Accordingly the outcome is considered satisfactory.

a. Outcome Rating: Satisfactory

7. Rationale for Risk to Development Outcome Rating:

According to the PAD (page 17) and the ICR (page 16), over the medium to long run, the sustainability of the investment financed under this project will depend on availability of funds to adequately maintain the National Road 19. Thus, the sustainability of this investment will remain the responsibility of the national government, which has a reasonable track record in this regard, although no evidence of average road condition and budget adequacy was presented. However, if a concession scheme is put in place, as expected when the upgrading of National Road 19 is completed, maintenance will fall under the responsibility of the selected toll road concessionaire. Since the concessionaire is likely for business reasons to keep the road well maintained, while there will sufficient users to pay toll fees, this lessens the risk of inadequate maintenance. Regarding PR 1 and PR 21 the provincial authorities have shown commitment thus far to protecting their assets and to finalizing the institutional strengthening sub-components, but again no evidence is led concerning budgetary allocations.

a. Risk to Development Outcome Rating: Moderate

8. Assessment of Bank Performance:

a. Quality at entry:
Project preparation built upon the platform of previous Bank experience in the sector and was strongly aligned to the Country Partnership Strategy and government priorities, while being innovative in the lending model, this being the first direct loan to the Province of Santa Fe. The Bank team in charge of preparation correctly identified and appraised the mix of benefits and risks implied in the lending mechanism and introduced mitigation measures to reduce potential risks, for example, through the establishment of a fiscal framework to minimize the risk of lack of counterpart financing during implementation and to monitor the overall financial health of the province.

However, the project faced an Inspection Panel Investigation during the preparatory phase, which concluded that the ESMP was not fully in compliance with OP/BP 4.01 because it did not properly provide for measures to mitigate potential downstream hydrological impacts caused by inadequate drainage in the road design of the section in question. Since the team had not picked up this issue earlier, an action plan was put in place which included various steps to mitigate the potential risk of flooding. The IP investigation made the preparation phase particularly challenging, costly and time consuming for the World Bank team (as well as for the executing agency). However, preparation moved forward, and did not translate into implementation delays down the road because special steps were planned to ensure this did not occur.

A further shortcoming in terms of project design related to monitoring and evaluation. Because there were discrepancies in the indicators used, this resulted in an inability to measure results properly throughout implementation. Otherwise project design was guided by strong environmental and social planning principles, which included the design of NR19 as a “green road” and the establishment of a comprehensive ESMP, as well as the establishment of “safety” as a unifying criterion throughout project preparation and implementation.

Quality-at-Entry Rating: Moderately Satisfactory

b. Quality of supervision:
This operation was subject to a more intensive than normal supervision effort on behalf of the Bank team, particularly after the Inspection Panel Investigation, given that one of the agreed measures under the Action Plan was the adoption of an “enhanced supervision” approach by the Bank. This implied additional supervision missions to the province, on average every three to four months, throughout implementation. In addition to missions undertaken by the World Bank team, the Bank supported implementation through a network of local consultants providing advice to the province on various issues arising throughout project execution (e.g., social,

environmental, engineering,). The intensive supervisory effort paid off in the long run and resulted in a positive working relationship with the province. This relationship was characterized by a dynamic flow of communications and high problem solving capacity on a day-to-day basis. Additionally, safeguard-related supervision by the Bank was particularly intensive leading to the effective implementation of the Resettlement Action Plan and the ESMP. As a result, management and supervision of safeguard aspects under the project was highly satisfactory in the larger part of project implementation and deservedly led to a recognition award by the industry..

This said, the monitoring of the project results framework as per Bank policy was not possible and the supporting institutional measures commenced too late and so some were unfinished at project closure. One sub-component was not implemented for reasons not discussed.

Quality of Supervision Rating: Satisfactory

Overall Bank Performance Rating: Moderately Satisfactory

9. Assessment of Borrower Performance:

a. Government Performance:
As envisaged by the project design, the federal Government undertook more of an oversight role during project preparation and implementation, with two representatives participating regularly during Bank missions. At the sub-national level the commitment and execution capacity of the province proved critical. The province was closely involved in every stage of the project cycle, from identification, to preparation, to pre-qualification for civil works, to bidding on contracts, the day-to-day execution of work, the relationship with contractors, and management of safeguards-related issues. The province had a strong sense of project ownership and accountability vis-à-vis project results. There were no counterpart funding issues.

Government Performance Rating: Satisfactory

b. Implementing Agency Performance:
The institutional setup was an important asset and increased the likelihood for project sustainability, given that no artificial parallel structure was created for project management. It drew on existing staff and ensured their continuity. No project funds were allocated to the PMU, which, through its various specialists, established a direct line of communication with Bank technical counterparts, resulting in a fluid and active relationship. Additionally, coordination and constructive relationships with various players/stakeholders within the province were also extremely effective according to the ICR (page 18).

The PMU's role in the management of safeguard-related issues needs highlighting, particularly in the implementation of the resettlement plan. The unit played an active role in the day-to-day relationships with affected communities, managing communications and stakeholder involvement and showing a willingness to go the extra mile to compensate people where appropriate, including mitigation measures to compensate communities for losses caused by the project. The PMU also maintained its commitment throughout
implementation to ensure a good quality of the work and to maximize safety. There were some minor compliance issues in respect of fiduciary and monitoring obligations vis-à-vis the Bank, but these did not affect the overall outcome of the project (see sections 10 and 11b).

Implementing Agency Performance Rating: Satisfactory

Overall Borrower Performance Rating: Satisfactory

10. M&E Design, Implementation, & Utilization:

a. M&E Design:
The PMU contracted with the National University of Cordoba to undertake a consultancy on design indicators, to establish baselines, and define monitoring schemes for NR 19 and PR 21 beyond the monitoring framework already included in the PAD. The approach undertaken by the University of Cordoba was intended to portray the project’s impact on three additional dimensions: (i) mobility and circulation; (ii) road safety; and (iii) socioeconomic impacts. This ultimately led to the establishment of multiple indicators which, despite being relevant, presented some degree of inconsistency or overlap with those established under the project’s result framework.

Furthermore, the ICR reports (page 9) that indicators included under the project’s Operational Manual also presented some degree of variance, both with indicators included in the PAD and those used for the study conducted by the University of Cordoba. Nevertheless, given that the Operational Manual was the only document available in Spanish, the province opted for the use of this document, vis-à-vis the PAD. However, the conceptual disconnect between monitoring indicators added a layer of confusion to a task that should have been straightforward.

Beyond the monitoring of outcomes/results, the project relied on semi-annual reports prepared by the PMU to evaluate overall progress in project implementation. These reports included information on overall progress of contracts/work, status in terms of financial management, disbursements, and key procurement processes, among others.

b. M&E Implementation:
The University of Cordoba, under the supervision of the PMU, was in charge of collecting the data for establishing baselines and follow-up measurements. Delays in the initiation of this consultancy meant that the initial surveys were conducted only in early 2010. Additionally, given that the methodology used compared a “without project scenario” with a “with project scenario” and that the new road was only opened to traffic in 2012, the progress of the project could not be monitored by this method.

Regarding mobility indicators, a series of manual traffic counts was conducted in three different locations on NR 19, and the resulting data were utilized to calculate both average speed/velocity and travel times (through a conversion formula using both average speed and length of travel). In terms of road safety indicators, the baseline was originally established with data provided by OCCOVI (Órgano de Control de Concesiones Viales). Follow-up data were provided by the Provincial Road Safety Agency, established in 2010. Finally, socioeconomic indicators relied on information provided by a series of agencies, including CECI (Cámara de Empresas y Corredores Immobiliarios de la Provincia de Santa Fe) for land values and tax recollection values, while municipalities provided information on new business registrations and new construction permits granted.

In the last Implementation and Status and Results Report (ISR), Monitoring and Evaluation was downgraded to moderately satisfactory, given that monitoring information was not systematized as required. However, in December 2012, following the completion of new traffic counts in October/November 2012, a revised report was submitted to the Bank, showing progress.

a. M&E Utilization:
The fact that the general methodology used to evaluate the project’s impacts compared “without” and “with” project scenarios implied that, by design, this information was not available as a decision-making tool during
implementation because the actual work was only completed toward the very end of the project. Moreover, given that the measurement of traffic shortly after the opening of the road would not have allowed for the proper assessment of project benefits or impacts, and that a reasonable amount of time is required after a ramp-up period for the traffic to reach a representative level, these measurements were only taken in October/November 2012, after
project closure. Given the disconnect between the Bank and the PMU on M&E it is scarcely surprising that the institutional sub-component on building M&E knowledge in the management unit did not progress.

M&E Quality Rating: Modest

11. Other Issues:

a. Safeguards:
This was an environmental Category B project triggering environmental assessment (BP/OP 4.01), cultural property (BP/OP 4.11) and involuntary resettlement (BP/OP 4.12). Management of social and environmental issues during implementation was thorough, and frameworks in place went beyond what is normally expected under Bank guidelines. This was likely in part because of the attention of the Inspection Panel (see below) and subsequent scrutiny by management, but resulted in the project earning a prize for the Road Work of the Year from the Argentine Road Association. The environmental safeguards received significant attention through a landscaping program (6,856 trees and 32,504 shrubs), and programs covering inter alia road safety measures, urban traffic management, natural and cultural patrimony preservation, as well as environmental contingency and training programs. While there was no involuntary resettlement of households, since expropriation concerned mainly land parcels, but there were 26 cases where the project had to ensure that economic livelihoods of affected persons could be maintained (ICR page 24). A school had to be re-located and the access to an agro-technical school was re-paved.

Early in project preparation the Bank’s Inspection Panel (IP) received a series of requests, raising diverse issues. Two initial requests did not lead to an investigation by the panel, but the third, submitted by residents of Franck, a town situated along the NR19, claimed that water drainage in the project's design was insufficient, and as a result, the proposed elevation of the new carriageway to be built would increase the risk of flooding in the area. They also argued that disclosure of information and consultations were inadequate during preparation. The IP concluded in its report (No. 49110-AR dated July 2, 2009, page 12) that the ESMP and the technical studies "did not fully evaluate the project's potential environmental risks and impacts in its area of influence as required by OP/BP 4.01 and did not properly provide for measures to mitigate potential downstream hydrologic impacts." The Panel considered that the methodologies used by engineering consulting firms to assess flood risks were not homogenous and that the evidence presented in the studies did not allow for the conclusion that the upgrading of NR 19 would not cause harm to the Project Affected People. In terms of claims raised regarding communication and consultation during preparation, the panel concluded, however, that there were no instances of noncompliance with Bank policies and procedures and that affected people were given the opportunity, through various means, to voice their concerns and suggestions, these being reflected, where appropriate, in project design.

The subsequent Management Report and recommendations submitted by the region, dated August 13 , 2009, contained an action plan, that included a hydrological study for the downstream area of NR 19 and an enhanced supervision schedule for the remaining implementation period. The plan were discussed by the Bank’s Board in October 2009. Throughout this process, which spanned more than two years, the IP recognized the significant effort put forth by Bank management, the project team, and the PMU to address issues raised by the requesters, to achieve full compliance with Bank policies and procedures through corrective actions in implementation, and to engage in a constructive and forthcoming dialog with the affected people, making the communication and consultation program already in place a pillar in the project’s overall implementation strategy. During ICR interviews, however, high “transaction costs” implicit in the IP process were highlighted both by the Bank team and by the provincial counterpart.

Complaints were also raised at a much later stage by the active local community concerning km. 44.5 where a chapel, a school, and a bar are located, allegedly too close to the new road, causing safety concerns among users, owners, and school attendants. Residents of the area submitted a request to the Bank’s Inspection Panel in September 2011. However, the panel did not register the request because project implementation was almost completed, with disbursements exceeding 95 percent. Nevertheless, the PMU agreed to include a series of complementary measures to mitigate the perception of risk among residents of the area.

Instances of conflict were also common regarding the issue of land valuations, with land owners estimating very high costs, in view of the rising trend in the price of commodities at that time. However, the PMU did an intensive follow up of all cases. The use of a standardized matrix to follow-up on resettlements provided an up-to-date record, at all times during implementation, of the status of the process, its key bottlenecks, and the cases requiring provincial intervention. Wherever possible, the province tried to further compensate owners for the loss of land through complementary work projects, including improved access points, small infrastructure works, and
infrastructure improvements.

b. Fiduciary Compliance:
Fiduciary compliance throughout the project was generally satisfactory. Financial management arrangements in place at the Secretariat of Investment Projects and External Financing in the province’s Ministry of Finance provided assurance that project funds were effectively allotted to the intended activities in an efficient manner. The
Provincial Financial Management System was utilized to keep records of all transactions under the project. Transactions recorded were subject to internal and external control units, including the Budget Directorate, the General Accounting Office, the General Treasury, and the Court of Accounts. In this way, project transactions were fully integrated into the province’s financial management systems and subject to its internal control framework.
Annual external audits have been submitted to the Bank in a timely manner throughout the project life, with no major issues or qualifications being identified.

Procurement was consistently rated as satisfactory until the last ISR when it was downgraded because results of the previous ex-post procurement review indicated some delays in the implementation of the procurement plan and some small instances of procurement malpractice that had not been identified earlier. Significant efforts were dedicated to ensuring that bidding processes were adequate, transparent, and competitive, and that bid prices were reasonable. Although contracts included a clause for the monthly redetermination of costs in order to mitigate the risk posed by inflation, another contractual clause to raise the overall cost of the contract was not activated by the contractors, enabling the parties to complete work within schedule and with no cost overruns.

c. Unintended Impacts (positive or negative):

d. Other:



12. Ratings:

ICR
IEG Review
Reason for Disagreement/Comments
Outcome:
Satisfactory
Satisfactory
 
Risk to Development Outcome:
Moderate
Moderate
 
Bank Performance:
Satisfactory
Moderately Satisfactory
ESMP was not fully in compliance with OP/BP 4.01 and discrepancies in the indicators used resulted in the inability to measure results properly throughout implementation. QAE thus had moderate shortcomings and according to the guidelines where one dimension is satisfactory and the other moderately satisfactory, the overall rating must be moderately satisfactory. 
Borrower Performance:
Satisfactory
Satisfactory
 
Quality of ICR:
 
Satisfactory
 
NOTES:
- When insufficient information is provided by the Bank for IEG to arrive at a clear rating, IEG will downgrade the relevant ratings as warranted beginning July 1, 2006.
- The "Reason for Disagreement/Comments" column could cross-reference other sections of the ICR Review, as appropriate.

13. Lessons:
  • The hiring of a single consultancy firm to take charge of environmental studies, and to work in coordination with the various consultancy firms in charge of technical design, helps ensure that environmental standards are unified across the various road segments and contractors and provides a feedback loop to make certain that designs meet environmental and social criteria.
  • The establishment of formal channels for continuous feedback from users and civil society provides a vital instrument for successful project implementation, enabling inclusion of citizens’ perspectives and knowledge in the actual design of projects. This strengthens ownership by local communities, and democratizes the overall process.
  • Appropriate due diligence is required in urban projects to minimize the risk of encountering unforeseen contingencies, particularly in the provision of utilities (electricity, water), which, if not scheduled correctly, can increase costs and delay implementation.
  • The Bank could increase its work with strong sub-national governments. The fact that this ambitious project was completed on time with no extension or request for additional financing demonstrates that capacity can exist at the sub-national level to execute direct loans from international financial institutions and to comply with the required norms and standards.

14. Assessment Recommended?

Yes
Why?
It would be useful to understand which road safety measures had been successful and whether a toll concession was considered viable and implemented.

15. Comments on Quality of ICR:

The ICR is for the most part well written, fairly concise, and with useful supporting information although it suffers from advocacy rather than objectiveness in detailing some aspects of the narrative. For example, the Inspection Panel found in favor of the complainants with respect to the hydrological aspects, not the Bank, there was no formal monitoring mechanism for the project in implementation, while some of the institutional support activities started too late, and were either incomplete or, in one case, not begun at closure. More evidence could have been provided in respect of likely sustainability of the assets and more information could have been given on the future toll road plans and the likely viability of granting such a concession. It would also have been useful to have included the additional internal costs and extra costs incurred by the province necessitated because of the Inspection Panel. The lessons are interesting and useful.

a. Quality of ICR Rating: Satisfactory

(ICRR-Rev6INV-Jun-2011)
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