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Implementation Completion Report (ICR) Review - Ci-transp Sec Adj


  
1. Project Data:   
ICR Review Date Posted:
04/14/2014   
Country:
Cote d'Ivoire
PROJ ID:
P001177
Appraisal
Actual
Project Name:
Ci-transp Sec Adj
Project Costs(US $M)
 299.20  348.30
L/C Number:
C3100
Loan/Credit (US $M)
 180.0  238.80
Sector Board:
Transport
Cofinancing (US $M)
 119.20  109.50
Cofinanciers:
KFW, AFD, AfDB, EU, Japan
Board Approval Date
  06/23/98
 
 
Closing Date
06/30/2001 08/31/2011
Sector(s):
Central government administration (41%), Roads and highways (36%), General transportation sector (18%), Ports waterways and shipping (5%)
Theme(s):
Public expenditure financial management and procurement (25% - P) Macroeconomic management (25% - P) Infrastructure services for private sector development (24% - P) Pollution management and environmental health (13% - S) Regulation and competition policy (13% - S)
         
Prepared by: Reviewed by: ICR Review Coordinator: Group:
Nestor Ntungwanayo
Kristin Hallberg Christopher David Nelson IEGPS1

2. Project Objectives and Components:

a. Objectives:

        The initial objectives of the 1998 program as defined in the Development Credit Agreement [(DCA), Schedule 2] aimed to: (a) improve the condition and efficiency of the borrower’s transport infrastructure; (b) build capacity for planning, programming and mobilizing funding required for the execution of investments in the Borrower’s transport sector; and (c) strengthen the legal and regulatory framework of the Borrower’s transport sector.

        The project development objectives of the revised project approved on September 2, 2008 were to (a) re-establish and improve road access and (b) safeguard road infrastructure assets across the country, notably in Northern Regions (2008 Portfolio Restructuring document, p. 22).

        The Project Appraisal Document (PAD) had other statements of objectives in the government matrix of actions (Annex 2), and the results matrix, (page 43-51), which were different from those detailed in the DCA. This review will assess program performance against the sets of statements of objectives in the 1998 DCA and the 2008 restructuring document.

b. Were the project objectives/key associated outcome targets revised during implementation?
Yes

If yes, did the Board approve the revised objectives/key associated outcome targets? Yes

Date of Board Approval: 12/03/2008

c. Components:

A. Components

This was a hybrid operation with an investment and an adjustment component.

      • Initial components (June 1998):

      (a) Adjustment component (cost appraisal of $100.0 against actual costs of $134.2 million):

      The goal of this component was to: (i) provide general budgetary support, contribute to narrowing the external financing gap, and (ii) strengthen Government's ability to ensure availability of routine and periodic road maintenance funding at sufficient levels and at appropriate times; and facilitate the transition of several sector organizations and parastatals from public to private sector status.

      (b) Investment component (Appraisal costs of $80 million against actual costs of $87.1 million): The investment component had 8 sub-components as detailed in the PAD:

      (1) Road Construction, Rehabilitation and Maintenance: Cost at appraisal of 59.3 million, actual costs unavailable. Activities planned under this component were: (i) the execution of a five-year road works program including: (i) routine and periodic maintenance, rehabilitation and construction of paved and unpaved roads, (ii) the strengthening of the capacity for road sector management and maintenance operations and developing the capacity of small local contractors to carry out road maintenance works, and (iii) the carrying out of works supervision and engineering studies

      (2) Road Transport Component: Cost at appraisal of $6.7 million, actual costs unavailable: Under this component, the project aimed at: (i) updating the legal and institutional framework for the transport sector and dissemination of the revised legislation and regulations, (ii) streamlining road control procedures and enhancing their transparency and rehabilitation and equipping of border control posts and security, (iii) providing technical advisory services and training to professional organizations of road transporters and rehabilitation of a specialized driver training center, (iv) carrying out studies.

      (3) Urban Transport Component: Cost at appraisal of $0.7 million, actual costs unavailable: The project intended to provide assistance for the concessioning of bus services in two Abidjan suburbs and for the establishment of a Coordinating Agency for Urban Transport programs, and to consult services for the preparation of a full-scale urban transport operation.

      (4) Port Component: Cost at appraisal of $2.7 million, actual costs unavailable: The project aimed to design and implement measures to improve the competitiveness of Côte d'Ivoire's external trade through the modernization of port-related operations and complete measures for the facilitation of customs and administrative procedures.

      (5) Environment Component: Cost at appraisal of $1.6 million, actual costs unavailable: The project intended to support measures to prevent the pollution of the marine environment from shipping activities will be supported with the active involvement of the Ivorian anti-pollution center

      (6) Institutional Strengthening Component: Cost at appraisal of $0.6 million, actual costs unavailable: This component intended to (a) support the restructuring of the Directorate of Land Transport (DTT) into a public company dealing with the support to the restructuring of the road safety office; and (c) support the review of the regulatory framework for the transport sector issuance of administrative documents.

      (7) Program Coordination and Audits Cost at appraisal of $2.8 million, actual costs unavailable: This allocation was to be used to fund technical audits and studies to analyze the Abidjan autonomous port and the San Pedro autonomous port performance for critical activities, and actions needed to improve them.

      (8) Physical and price contingencies: Cost at appraisal of $5.7 million, actual costs unavailable: These were resources earmarked to hedge the project against currency and price fluctuations.
      • Revised components: (September 2008)

      To take into account the post-conflict context, the revised project sought to re-establish and improve road access and safeguard road infrastructure assets across the country, notably in Northern and Western Regions where road maintenance activities were suspended for five years since the beginning of the political crisis. The revised project was articulated around two main components as described below:
        Component 1 : Road Construction, Rehabilitation and Maintenance (Cost at restructuring and actual costs not provided in the ICR)

      Under this component, the project intended to support the financing of: (a) the construction of about 60 bridges across the country to ensure accessibility of basic services and connection with neighboring countries; (b) carrying out of detailed engineering studies for ten bridges in the Northern and Western Regions; (c) carrying out of works supervision for construction of bridges; (d) capacity building for the Borrower’s agency responsible for road sector management and maintenance operations, through the provision of technical advisory services and acquisition of equipment; (e) capacity development for small local contractors to carry out road maintenance works; and (f) coordination of Project activities.

      Component 2: Road Transport Component (Cost at restructuring and actual costs not provided in the ICR)

      The second component aimed to fund the following activities: (a) rehabilitation of the road safety training center; (b) rehabilitation of the Grand Bassam bus station; (c) creation of a road accident database and (d) capacity building of Road Safety Agency.

      B. Policy areas

      This project aimed to improve the policy and governance environment of transport sector business (adjustment window), and enhance the transport infrastructure (investment window) as well. Below are presented the policy areas whereby progress was expected following policy measures identified as prior actions, or conditions to the release of the four tranches of the adjustment component. These policy efforts reforms were deemed to be pursued mostly during the period before restructuring, as there were no more adjustment resources after restructuring. These actions and conditions are bundled into the following groupings:

      (a) Develop a transport sector vision, outlook and organization through (i) adoption of a transport sector policy by Government, (ii) list of personnel to key posts in the new organizational structure of the Directorate of highways and urban roads, and first and second year consultancy assignments for capacity building, (iii) evidence that annual road rehabilitation and maintenance program is fully funded in the budget.

      (b) Improve programming, budgeting and commitment of funds for road rehabilitation and maintenance through: (i) adoption of the road rehabilitation and maintenance program, (ii) budgetary allocations to cover the cost of the routine maintenance program, the cost of the agreed periodic maintenance program, and to cover equipment and operating, (iii) strengthening accounting and auditing system, and (iv) adoption of the transport investment program.

      (c) Institutional reforms for the enterprises involved in the transport industry through: (i) Sale and effective transfer of the Civil work management company's equipment to successful bidders, (ii) Evidence that Directorate of land transport has been restructured (iii) the rural safety office has been restructured in a manner acceptable, (iv) the Urban Transport Agency for Abidjan (AGETU) has been effectively established, and (v) an acceptable arrangement (joint venture/concession contract) for the operation and management of the Abidjan autonomous port's container terminal and ship-to-shore gantry cranes has been concluded.

      (d) Improved governance of private sector firms involved in the transport industry through the following reforms: (i) the Government has ceased to execute road maintenance works by force account; (ii) no contractor bills have remained unpaid for more than one month following certification of satisfactory works completion a technical audit that informal road transport control posts are found only very exceptionally, and (iii) evidence that no contractor bills have remained unpaid for more than one month following certification of satisfactory works completion

      (e) Collection of taxes and user fees for road users through the adoption of an action plan and timetable for implementing the recommendations of the study of road user charges and road transport taxation, the study of road user charges and road transport taxation has been implemented.

      (f) Strengthening the legal environment of the transport sector: by enacting (i) a new law governing the transport sector, (ii) a compendium of revised regulations for road passenger and freight transport, and (iii) an updated Maritime Code and Port Regulations.

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

Costs: Total disbursements devoted to the transport operation amounted to about $221,3 million from the Bank, which included an investment component amounting to $87.1 million (39 percent), and a $134,2 million (61 percent) envelope for the adjustment component. About 88 percent of the above resources were disbursed before project restructuring, against 12 percent after.

Financing: The Bank's credit was supporting a hybrid operation with investment and adjustment components, in an amount of $180.0 million. This credit was part of a larger country program devoted to upgrading the transport sector. Three amendments to the initial DCA provided supplemental amounts from the Bank group to the adjustment component, bringing the total amount approved to about $238.8 million. The adjustment component, amounting to a total amount of about $144.2 million (initial $100.0 million and supplemental SDR 44.2 million), was to be released in four tranches, but the last tranche of about $10.0 million was canceled, as conditionality was not met. The African Development Bank (AfDB), the German Development Bank (KFW) and the French Development Agency (AFD) co-financed this program in the respective amounts of $30.0 million, $16.90 million, and $62.6 million, while Japan and EU cancelled their initial commitments in the course of program implementation.

Borrower contribution: While the PAD indicated that the Government and local institutions were expected to fund 69 percent of the program, the ICR didn't provide information on the contribution of the Government and local institutions during project implementation.

Dates: The project was approved on June 23, 1998 and made effective on November 9, 1998. Because of debt service arrears, the project was suspended for about six years over three distinct periods: from October 31, 2000 to January 30, 2002; from June 15, 2004 to April 2, 2008; and from December 4, 2010 to May 31, 2011. The closing date of the project was extended five times: (i) until December 31 2002 and then until June 30, 2003 following coup attempts, (ii) until June 30, 2004, following portfolio restructuring strategy, and project restructuring attempt, and finally (iii) until August 31, 2010, and then until August 31, 2011, to give the needed time to implement a formally restructured project that occurred on September 2, 2008.


3. Relevance of Objectives & Design:

a. Relevance of Objectives:

Relevance of objective of the initial project (1998-2008): High

Key country's policy documents which underpinned the design and implementation of this operation included a 1998 policy framework paper (PFP), a 2002 I-PRSP and a 2009 full PRSP which spanned the period 1998-2012 and all addressed issues affecting the transport sector. The PFP objectives focused on fiscal consolidation through broadening the tax base and restructuring government expenditure in favor of priority social sectors and basic infrastructure and deepening structural reforms that promote private sector development and investment, and thus build a sound basis for sustainable growth. The I-PRSP underscored that the regulatory framework for land-based, rail, and air transportation and ports will be modernized to provide for better development of this sector. The 2009 PRSP emphasized investment as an important driver of growth, and noted that the diagnosis of the transport system shows that, despite the performances observed in the sector, many difficulties still subsist. In particular, the inefficient transport operations and lack of adequate infrastructure reduce the competitiveness of trade and prevent an active part of the population from participating in economic development.

The Government strategy for the country's transport sector was detailed in its Letter of Sector Policy adopted before presentation of the program to the Board, with adequate reform actions, reflected in the Letter. The letter and reforms agenda were developed through discussions with Government, with representatives of the para-public agencies concerned and with representatives of private operators active in the sector. This project aimed to support Côte d'Ivoire to move ahead with the remain agenda in the modernization of the transport sector.

The proposed program was consistent with the Country Assistance Strategy (CAS) discussed by
the Board on September 11, 1997. Sustainable road maintenance was key to achieving the objective of sustainable economic growth. IDA had already been and continued to be involved in the transport sector reform through several adjustment operations aimed at improving the country competitiveness. The project was a logical continuation of this involvement, with the emphasis given on the road transport sector, which had received little attention in terms of reforms. The Bank Group's lending in the transport sector had concentrated in the road sub-sector, for which eight loans were provided between 1968 and 1985 totaling close to $480 million in current terms. Subsequent Bank assistance strategies continued to be supportive to the transport reform agenda, including the FY10 ISN and the FY10 CPS. In particular, the CPS had two pillars devoted to strengthening the private sector, and planning for the infrastructure renewal and basic services.

In summary, the objectives of this operation were relevant to country's priorities since the outset, although its implementation was confronted by a domestic civil war. Both the Government and the Bank kept updating their strategies so that the project remained relevant for the twelve year period of the project duration.

Relevance of objective of the restructured project (2008-2012): Substantial

    The Peace Accord of Ouagadougou, signed in March 2007, and credible steps toward normalization in Cote d'Ivoire represented a new opportunity to reactivate, restructure and complete implementation of this project to meet post-conflict emergency needs in the transport sector. The project’s development objectives were changed to take into account the post-conflict context and aimed to address the emergency needs of the country, improve land communications and stem the fast deterioration of the road network due to a maintenance shortfall in the past five years. The objectives were well stated and were scaled down to correspond to the immediate needs of the country, the limited un-disbursed resources and the short implementation time agreed upon among parties, and were supportive to the Program for Economic Recovery launched by the Government in May 2007.

    The project restructuring was approved in 2008 after the removal of the suspension of the Bank’s activities in the country in the summer of 2004 due to country’s accumulation of arrears toward the Bank. The restructuring was consistent with and supportive to the Bank's Interim Strategy Note approved in April 2008, under the pillar aimed at kick-starting economic recovery and reform. However, this restructuring was an effort by the Bank to make good use of resources that had been committed ten years ago, and to address transport issues in a conflict and fragile country. While this exercise was useful, it could not be optimal, pointing to a substantial rating of the relevance of objective.

    b. Relevance of Design:

    Relevance of design of the initial project (1998-2008): Modest

    The statement of project objectives and project components in the PAD was different from the one in the the Development Credit Agreement, creating difficulties in assessing the project performance.

    The initial project was complex and disproportionate with local implementation capacity. The results framework was detailed and comprehensive (Schedule B of the PAD), and was complemented by a sound Government's matrix of actions, to ensure consistency with borrower's agenda of planned reforms and activities. It identified the project objectives, inputs and outputs, risks and critical assumptions, and expected outcomes and impacts. Due to the complexity of the project, the results matrix proved to be overly unrealistic. There was a mismatch between the internal absorption and local technical capacity and the magnitude of the project.

    In the course of project implementation, the project was restructured many times, most of the time to add new activities and/or to reallocate resources, and in 2008 to scale down the activities in proportion to available resources. The operation had also other shortcomings including: (i) a lack of uniformity in the definition of objectives in the DCA and the PAD, (ii) the many restructuring operations that took place during the first three years of the project, due to strained dialogue between the parties and (iii) the fact that the major part of the resources were provided under the adjustment window at the expense of the investment window.

    Relevance of design of the restructured project (2008-2012): Substantial

      The restructuring was meant to: (i) adjust the project objectives to the country’s new post-conflict realities; (ii) focus on urgent country reconstruction and reunification activities; and (iii) extend the closing dates to allow the completion of the new activities. The restructured project had a scaled down results matrix with new intermediate and final outcomes as well as intermediate and final indicators for the period 2008-2010. Implementation arrangements were also updated to match new conditions on the ground, building on project implementation experience in reorganizing the implementation agencies and the fiduciary arrangements.


      4. Achievement of Objectives (Efficacy) :

      Initial project (1998-2012)

          • Improve the condition and efficiency of the borrower's transport infrastructure: Modest
            Road maintenance and pavement: Government funding of road maintenance was very limited during the period of project implementation. The overall condition of the road network worsened since 1998, with less than 30% being in good to fair condition by 2008. Whereas the objective of the project was to strengthen road maintenance and catch up with the maintenance backlog, the only repair works were funded by the project at a rate largely below the needs. Côte d’Ivoire spent less than 0.4% of its GDP on average on road infrastructure over the 1998-2008 decade, whereas 1.5% was required to simply maintain and slightly upgrade the network. It is noteworthy that, until 2008, the Bank's disbursements under this program were essentially in the form of budget support. Since the program approval until 2008, no new paved roads were constructed, the combined routine and periodic maintenance planned quantities were only 1.5 percent achieved (2,080 km), the construction of bridges was three percent achieved (1), the construction of culverts was about 69 percent achieved (10,667) after conversion of the installed drainage pipes into culverts, while the target for rehabilitation of paved roads was not achieved (See Table below)

            Table 1: Investment Component Results at project closure
            Type of works
            Unit
            Planned
            Achieved
            % Rate of achievement
            Routine
            maintenance
            Paved Km
            5,300
            -
            UnpavedKm
            62,750
            -
            Periodic
            Maintenance
            unpaved
            RegravellingKm
            14,800
            2,080
            3
            Spot improvementKm
            59,700
            CulvertsNumber
            1,600
            27
            2
            Drain pipesMl
            -
            10,650
            67
            RehabilitationPaved Km
            -
            454
            UnpavedKm
            470
            4,144
            New ConstructionPaved roadsKm
            175
            -
            BridgesNumber
            30
            1
            3
            Source: ICR page 27

            Urban and maritime transport: Progress toward the upgrade of the urban transport was limited, principally because the weak oversight and regulation of the sector hampered the development of the private sector in facilitating urban transport. An Urban Transport Agency (AGETU) was created in 2000 and its senior officials were appointed, but the law governing its resources was only passed in 2003 and the agency became operational in 2004. Since then, the level of its resources has been revised almost every year as a result of differences between local communities, AGETU and local fiscal administrations about the share of available resources. These disputes have hampered AGETU’s coordination and regulatory role.

            The operation of the container terminal and ship to shore cranes of the port of Abidjan were given in concession to a private operator; however the process was controversial; the government unilaterally aborted the ongoing international bidding process to sign a sole source contract with one of the co-bidders. Pollution fighting equipment has been acquired in PAA and PASP. Annual and monthly data are provided by the two ports. While the country went through tumultuous periods and deep political crises, the ports maintained a healthy activity and competitive productivity ratios.

            Entrepreneurship in the transport sector: The transport reform program led to the creation of about one hundred domestic contractors between 1998 and 2002, however 16% of them defaulted in exercising their trade and were terminated. The failure rate was partly due to the difficulties to obtain commercial bank loans, to rent equipment, and most of all to get paid rapidly or simply get paid. The number of days between bid submission and contract signature went down from an average 144 days early into project implementation to 46 days in 2003-04, but never reached the ambitious target of 30 days. No more civil engineering equipment was purchased by the Directorate of Highways and Urban Roads since all works had been privatized since the project started. No equipment rental companies operational were created. A concession agreement was signed with a privately-operated bus transport service in 1998 to ensure transport connection with the suburbs in Yopougon and Abobo in the economic capital of Abidjan, but operational prerequisites were unclear. The operator was unable to mobilize funds to purchase the buses and start operations until 2001, and the whole operation was abandoned later in 2002. A feasibility study for improving bus stations was completed in 1998 but was shelved thereafter. All road maintenance works were undertaken by private contractors. However, arrears have crept up during the project implementation period and have reached at the ICR preparation, a collective amount of about FCFA 29 billion most probably above one month.

            When the project closed, performance to achieve the first objective was modest. Progress in road maintenance and pavement was mediocre, urban transport and entrepreneurship in the transport sector could not overcome institutional and financial hurdles. Only the ports maintained a healthy activity and competitive productivity ratios, but project contribution in this area was absent.
          • Build capacity for planning, programming and mobilizing funding required for the execution of the borrower's transport sector: Modest

            Reflecting the impact of the adjustment conditionality of this operation, the transport institutional setting improved during the period of project implementation: (i) the functions and responsibilities of the Highway Department of the Ministry of economic infrastructure were appropriately revised, but the management of the many civil servants remained unsolved, (ii) the stock of heavy road maintenance equipment was liquidated, and (iii) the government created a Road Maintenance Authority and a Road Fund in 2001, although resources remained insufficient to adequately fund road maintenance activities. Starting 2003 when these agencies were effectively staffed, the management quality of road works and maintenance administration improved, but their capacity remained under-utilized because of lack of investment funding.

            A planned data bank on transport sector was not created. Little progress was accomplished, because of turf battle between the Ministry of Economic Infrastructure and the Ministry of Transport. Some data on road infrastructure are now available at the Road Agency (AGEROUTE) and some more at the Ministry of Transport but they do not talk to each other and are not easily retrievable.

            Indicators related to improved knowledge of essential rules and their correct enforcement, and to more efficient vehicle operation and increased transport enterprises efficiency were not monitored.
            An action plan and implementation timetable slated to set and collect the optimum level of taxes and user charges against road user never were not made available. A study was stopped by the previous government without informing the Bank, a new government re-launched it. The final report of a study intended to analyze taxation in the transport sector was expected in May 2000 including the Implementation Plan, but was never concluded.

            Progress toward road transport safety was limited, because the restructuring of the road security office could not be completed, the vehicle inspection system could not operate efficiently, and road controls continued.
          • Strengthen the legal and regulatory framework of the borrower's transport sector : Modest
            The legal, regulatory and institutional framework for transportation services was updated in 2000 and liberalized the access to the transport business. The Directorate of Land Transport (DLT) was restructured in 2001 with the creation of National Land Transport Company (NLTC). However, this restructuring failed to separate the management of public and private interests in land transport, and the government created a new General Directorate of Land Transport and Traffics (GDLTT) in 2006, but without updating the bylaws creating the NLTC. The overlapping responsibilities between NLTC and GDLTT renewed the need for an institutional restructuring.

            A one-time audit report performed in 2000 confirmed that road blocks were found only exceptionally. However soon after they started to reappear and since then they have often been reported and documented in the media.

            In the context of the adjustment window of the operation, (i) a new law governing road passengers and freight transport activities and publication of updated regulations governing land transport activities was enacted; (ii) the restructuring of the Road Safety Office has not been undertaken, despite the formal adoption by the government of the recommendations of a restructuring study completed in 2000, (iii) in 2000, the government launched an action plan to increase the ratio of inspected vehicles; however its implementation was interrupted because the equipment installed in inspection centers was looted during the political turmoil after the coup attempt of 2002, and (iv) a one-time audit report performed in 2000 confirmed that road blocks were found only exceptionally. However soon after they reappeared and since then they remained a distressing hallmark of Cote d’Ivoire as was documented in the media.

            There was some progress in the legal and institutional framework of the road transport industry in Côte d'Ivoire, but industry performance didn't occur, as private sector contractors could not operate efficiently, because of arrears, inadequate road taxation and roads controls affecting fluid circulation. Port regulations in Abidjan (PAA) and San Pedro (PASP) were successfully updated. A new maritime code and a merchant navy code were drafted, however none of them have been voted by the parliament yet, so the old code of 1961 is still applicable.

            (ii) Restructured project (2008-2012)

            Following the 2008 project restructuring, the project components were restructured, disbursements levels were revised as well as country parameters and the closing date was extended. Most importantly, the objective of the project was changed (see Section 2) and the performance in achieving the new outcomes was as detailed below:
            • Re-establish and improve road access: Substantial

            At the project closure 2012, the following outputs were completed: (i) 76 bridges were rehabilitated in the Northern region against 60 bridges planned (127%), (ii) 1200 representatives from road enterprises were trained against 300 planned, (iii) 3 bridges studies were completed in the Northern region against 10 planned, (iv) the payments due to contractors were made within the 15 days-4 days average, and finally, (v) the bus station in Grand Bassam was rehabilitated.

            Under this objective, there was good progress in rehabilitating bridges and the bus station, in training entrepreneurs in the road sector, and in paying contractors, but bridges studies fell below target.
            • Safeguard road infrastructure assets across the country, notably in Northern Regions: Substantial

            When the project closed in 2012, the following achievements were completed: (i) environmental mitigation clauses were included in all bridges contracts and in all Côte d'Ivoire contracts, (ii) the annual reduction of accident rates at the Grand Bassam bus station could not be measured as the rehabilitation works were only completed by the project closing date, (iii) the road safety training center has been rehabilitated, and finally (iv) 1,101 drivers and 287 driving school monitors were trained in 2009-11.

            Overall, there was good progress in drivers and road safety training and in mainstreaming environmental issues in the contracting operations all over the country; however, reduction of accident rates could not be measured.

      5. Efficiency:


      Modest

      At appraisal, the economic internal rate of return was calculated for the roads rehabilitation and construction component. The expected road rehabilitation and construction works never started, making it impossible to calculate an ex-posteconomic analysis of the same. The investment component only concentrated on hot spot removal and cross drainage structures along paved and unpaved roads and achievements were insignificant as disbursement from this window was limited during the first part of the project implementation. Efficiency during the first part of the project led to limited economic returns as key project investments were not launched.

      After the project restructuring in 2008, focus was put on the construction and reconstruction of critical small bridges in rural areas to unlock agricultural production zones. No ex-anteeconomic evaluation was calculated for these investments. The ICR reported that, assuming that these roads will continue to be maintained, a conservative 20-year life cycle of the structures built, and a continued agriculture production, the net present value (NPV) over 20 years discounted at 8 percent is around US$150 million or about three times the cost of the investment.

      Efficiency in project implementation is rated as modest.

      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:
      %
      %
      ICR estimate:
      No
      %
      %

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

      6. Outcome:


      Moderately Unsatisfactory

      Initial project: 88 percent of disbursed resources: Moderately Unsatisfactory

      The objectives of the operation were highly relevant at the outset, but the relevance of design was modest. Efficacy in achieving the outcome of the project (1998-2012) was rated as modest for each of the three project objectives. At project closure, progress in road maintenance and pavement was mediocre, urban transport and entrepreneurship in the transport sector could not overcome institutional and financial hurdles. Only the ports maintained a healthy activity and competitive productivity ratios, but project contribution in this area was absent.

      Restructured project: 12 percent of disbursed resources: Moderately Satisfactory

      Both the relevance of objectives and the relevance of design were substantial after project restructuring. Efficacy is rated as substantial for each of the two objectives during the period after project restructuring. Implementation of the revised project was somewhat effective, and produced some results, but they could not make up the missed outcomes initially identified.

      Overall, this review rates the project efficiency as modest. Before and after restructuring, the project led to limited economic returns, as key project investments were not launched, or those launched were short-lived. The project was implemented on a twelve year period against a planned five year period, was suspended for six years, and extended five times. Because of those long delays in project implementation, which led to increased costs of procured goods and services and cancellation of part of the resources, project efficiency was overall limited.

      a. Outcome Rating: Moderately Unsatisfactory

      7. Rationale for Risk to Development Outcome Rating:


      Moderate

      The limited performance of this operation was primarily linked to the long civil war that marred the country when the project was active. The conflict has been substantially brought under control, following a regime change in 2011, which allowed somehow the implementation of part of the investment portion of this project. Assuming that the client and the country conditions were the main source of underperformance, there is room for hope that the structural reforms in the transport sector will be maintained and championed by the current government.

      Some indication in this direction stems from the rapid economic progress that followed the political change in 2011. The political and security situations have improved somewhat over the past several months, but challenges remain. Côte d’Ivoire’s growth performance in 2012 exceeded expectations, with a 9.8 percent GDP increase; inflation remained low at 1.3 percent, while the fiscal outcome was better than programmed. The sharp rise in investment-related imports turned the current account into deficit. Côte d’Ivoire no longer has any outstanding arrears to its external creditors (IMF-2013).

      This outlook has led the Bank to envisioning a follow on operation which is under preparation. The proposed project concept aims at addressing short term emergency infrastructure needs that will directly support the peace process through the provision of basic infrastructure services. Furthermore, the new government is now considering adopting a more aggressive investment policy and launching a large investment program to repair and upgrade the road network to support agricultural exports and to reconnect communities affected by a decade of civil war. This large investment program will require the financing support of the donor community including the Bank. It will succeed if the road maintenance reform is completed, road transport regulations are implemented, illegal roadblocks are eradicated, arrears are paid to the construction industry, and above all, if it is championed by a government decision maker.

      In summary, unless there is a reversal on the security side, achieved outcome will be maintained and even strengthened, and the risk to development outcome is rated as moderate

      a. Risk to Development Outcome Rating: Moderate

      8. Assessment of Bank Performance:

      a. Quality at entry:
      The project objectives were highly relevant, and the association of an adjustment component with an investment component was ingenious, because the Government had an incentive to reform a strategic sector. However, the project was complex and its design overestimated local internal absorption capacity and the technical capacity on the ground to implement a complex project.

      While the technical preparation of the project was thorough and of high quality, it was lengthy and not cost effective. Moreover, the macroeconomic and fiscal analysis failed to properly assess and flag the severe budget constraints and liquidity problems that made the government incapable of fulfilling its funding commitments right from the project start-up. The Bank misjudged the government's commitment to institutional reform, and political economy analysis could not shed enough light on the looming civil war that obstructed the implementation of he project.

      The project team should have been deeper in its assessment of the real ownership of the reform agenda by the government and could have been more realistic in the objectives that the project was supposed to achieve. The team could have done a more thorough assessment of the quality of governance in the sector. The risk analysis identified the right potential risks, most of which did materialize. The mitigation factors were essentially the conditions attached to the release of the adjustment tranches, an instrument that had been widely used by the Bank at the time to promote reforms. In reality, it did not work as expected since the tranches, other than the floating tranche, were then released with conditions partially fulfilled or changed altogether.

      The project design suffered from a number of weaknesses: (i) the definition of objectives was not consistent, as objectives in the PAD differed from those in the DCA, and the Government matrix of actions, (ii) the M&E framework lacked simplicity, aggregated indicators and adequate implementation arrangements, and the reform agenda had a long list of conditions imposed before negotiations, board presentation, and effectiveness, and some of these conditions were postponed or were dropped after negotiations.

      Quality-at-Entry Rating: Moderately Unsatisfactory

      b. Quality of supervision:

      The supervision of the investment part was proactive and sustained, despite the very difficult context. Twelve supervision missions were organized during the project suspension periods or during periods when security measures would prevent Bank staff from traveling to Côte d’Ivoire; and the medium term review was actually organized in the country during a period of suspension. The frequency of missions and the thorough results-oriented aide memoires testify to the quality of the supervision of the investment part.

      The supervision of the adjustment part was carried out during the same supervision missions mentioned above with an equal level of scrutiny and detail. However, the resulting decisions were influenced by political-economy considerations, in particular the need for the country to rapidly improve its financial situation, which affected the rigor of the evaluation of the adjustment tranches and somehow discredited the use of an adjustment instrument to promote sector reforms.

      Quality of Supervision Rating: Moderately Satisfactory

      Overall Bank Performance Rating: Moderately Unsatisfactory

      9. Assessment of Borrower Performance:

      a. Government Performance:

      Although the Government’s commitment seemed to be strong during the preparation period, once the project implementation started, it waned. Economic and financial crises followed by the prolonged political crisis were marked by a decline in investment, a drop in public expenditure and household consumption and an increase of domestic budgetary arrears, and they led to slowdown in project implementation. Thirteen different governments were sworn in over the project period which saw the rotation of six finance ministers, six infrastructure ministers and eleven transport ministers.

      The public financial management system was slow and complex and counterpart funds were inadequate. There was uncertainty in the release of funds allocated to road maintenance as they were combined with the counterpart funds and as such managed by a Public Debt officer. The approval process of contractors’ monthly payment certificates was lengthy and generated arrears; there were inconsistency issues between the government and PIU budgeting practices.

      The government did not either follow up actively on the reform program or fulfill its financial commitments, was impaired by a political crisis throughout project implementation, and struggled with budget management. However, this low performance was tempered by the institutional reforms achievements and the proactive attitude of the government to reverse setbacks encountered during project implementation.

      Government Performance Rating: Moderately Unsatisfactory

      b. Implementing Agency Performance:

      The project coordinating unit in the Prime Minister Office performed well after a few start up problems. The Road Fund and the Road Authority performed as well as they could, given the lack of government counterpart funds and investment budget. Directorate of highways and urban roads (the agency in charge before AGEROUTE was created) performed poorly, and the performance of many other implementing agencies under the Ministry of Transport was also poor.

      Implementing Agency Performance Rating: Moderately Unsatisfactory

      Overall Borrower Performance Rating: Moderately Unsatisfactory

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

      a. M&E Design:

        Whereas indicators and targets were appropriate and relevant, some baseline figures were missing. Most importantly, the results matrix proved to be overly detailed, and impossible to track by the multiple government agencies. The task became unmanageable with the multiple phases of project restructuring.

        There was little concern about which executing agency would be responsible for monitoring outcomes and whether they had the capacity and the willingness to do so. Some targets were overly optimistic because improvements come in sequence and not at the same time.

      b. M&E Implementation:

      The M&E framework was not systematically implemented and is absent from the ISRs until when the new format was introduced. It mostly served as a guide to assess the PDO ratings over the project life. Pieces of the framework have been used in a few aide memoires to build up a remedial action plan.

      Some information required in the M&E framework were not readily available and proved difficult to obtain, in particular the annual budget allocations for various types of road works and the corresponding expenditures. Bt the project closing, it was close to impossible to find meaningful detailed public finance data at the Ministry of Finance. Some were obtained from the executing agencies but were incomplete.

      The M&E framework was not updated following the successive restructuring operations except for the last one in September 2008. The monitoring framework of the adjustment part was partially waived and substantially modified for the second and third tranches.

      a. M&E Utilization:

      Until the June 2003 restructuring, the M&E framework was more used to monitor the project implementation pace than the attainment of the development objectives. This was especially the case for the adjustment part. Following the September 2008 restructuring, the M&E framework was updated to reflect the drastic change in project scope. Subsequently, great efforts were made by PCU to measure and monitor the indicators, and data were collected for all indicators.

      M&E Quality Rating: Modest

      11. Other Issues:

      a. Safeguards:

      The Environment Category was rated B at appraisal. By mid-term review in June 2001, most environmental and social safeguard activities were lagging behind due to weak safeguard capacity of the project coordinating unit and implementing agencies. It took more than three years to complete a Sectoral Environmental Assessment that was due by the end of the first year of project implementation.

      Nonetheless by the end of the project and in spite of numerous interruptions, the social and environmental management capacity was significantly strengthened in all implementing agencies: The PCU was staffed with a socio-environmental expert, an environmental unit was established within the Directorate of highways and urban roads and progressively staffed and equipped, and the Port of Abidjan created a well staffed environmental unit. A major outcome of the project was the general mainstreaming of safeguards in road contracts in Côte d’Ivoire.

      b. Fiduciary Compliance:

      Before the June 2003 restructuring of project implementation, the financial management was inadequate and failed to accurately capture the disbursements by components the numerous changes in components had a compounding effect. During the second leg of implementation, financial management improved. The Coordination Unit acted effectively and the quarterly Financial Monitoring Reports were received regularly and in compliance with the agreed format.

      Until 2003, the weak procurement capacity generated delays in the execution of the investment part of the program and significantly hampered project implementation. However, by project closing, the capacity of the staff of the executing agencies had been strengthened, due to intensive training in procurement for works and consultant services. As a result, procurement performance improved
      significantly.

      c. Unintended Impacts (positive or negative):

      The ICR reported none

      d. Other:

            The ICR reported none



      12. Ratings:

      ICR
      IEG Review
      Reason for Disagreement/Comments
      Outcome:
      Unsatisfactory
      Moderately Unsatisfactory
      IEG gave credit to the project initial high relevance of objective, and the substantial outcome performance after the project restructuring. 
      Risk to Development Outcome:
      Significant
      Moderate
      Improved security after conflict stopped, and current reformer government point to possible sustainability of achieved results 
      Bank Performance:
      Moderately Unsatisfactory
      Moderately Unsatisfactory
       
      Borrower Performance:
      Moderately Unsatisfactory
      Moderately Unsatisfactory
       
      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:
      Below are summarized the main lessons distilled from the ICR that might be useful for future Bank operations:

          (i) The preparation and implementation of a project should be very attentive to political economy factors; the latter should be factored in when determining the scope of objectives, components and activities supported by the project.

          (ii) Complex hybrid projects supporting both investment and ambitious sectoral reforms should only be approved when there is strong ownership and strong capacity to implement. When budget support is part of the operation, the macroeconomic context and the status of public/sectoral finances should be carefully assessed during project preparation to ensure adequate government funding during implementation.

          (iii) Project design and objectives should be kept simple with a focus on implementation feasibility. The M&E framework should be also simple, without too much reliance on project funding, and the borrower should see a clear benefit in implementing it.

          (iv) It is paramount to keep communication lines open with the counterparts during periods of political crisis or project suspension; careful consideration should be given to keep a project open during difficult country circumstances to ensure continuity in dialogue with Government and to allow for quick emergency response needed for reconstruction efforts versus preparing an emergency operation.

      14. Assessment Recommended?

      No

      15. Comments on Quality of ICR:


      IEG recognizes that this was a difficult ICR to write, because it reviewed a complex operation implemented in a very challenging environment over 12 years. In spite of weaknesses throughout the document, the ICR shed light on the key features of the operation. The areas that could have been presented more clearly are the following:
      (i) The ICR was not clear in the presentation of the numbers of the approved and disbursed amounts of the project, especially when the numbers are provided at times only in $ and at other instances in SDRs. It was difficult to discover in the report how much was finally approved, how much was spent on which component, and which currency was used to disburse.
      (ii) Due to inconsistency in the definition of the project initial objectives (PAD, DCA and government matrix of actions), the ICR has got difficulties to align project achievements to the initial and revised objectives of the project.

      a. Quality of ICR Rating: Satisfactory

      (ICRR-Rev6INV-Jun-2011)
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