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Implementation Completion Report on Tanzania Sixth Highway Rehabilitation Project (Credit 1688-TA)

The Implementation Completion Report (ICR) on the Tanzania: Sixth Highway Rehabilitation Project (Credit 1688- TA, approved in FY86) was prepared by the Africa Regional Office, with Appendix B contributed by the Borrower. The Credit for US$50 million was approved on May 6, 1986, and closed on June 30, 1994, two years behind the scheduled date fully disbursed. Co-financing in the amount of US$36.55 million was provided by the African Development Fund, and Norway and Denmark.

The project objectives were to: (a) reduce road transport costs by rehabilitating the most important sections of the paved and gravel road network, with a special emphasis on those serving the agriculture sector; (b) improve road maintenance by increasing the role of contractors; (c) assist and expand the capacity and efficiency of the trucking industry; and (d) provide technical assistance and training in the road sector. The project consisted of the rehabilitation of about 300 kms of the Tanzania Zambia Highway (TANZAM) and 700-1000 kms of gravel roads; road maintenance equipment rehabilitation; technical assistance to the local construction and trucking industries; and consulting services for various studies. In 1989, the project was restructured: the TANZAM road rehabilitation component was expanded to 370 kms by additional funding from a donor; the gravel roads rehabilitation component was reduced to 130 kms; Government contribution to project funding was reduced from 20 to 10 percent; direct contracting of equipment repairs to local private repair shops was allowed; and the Borrower was granted greater flexibility in procurement.

The project substantially met the objectives considered most important after its restructuring: the reduced program in rural areas was partially completed (85 percent) and the TANZAM highway rehabilitation was completed as planned. The economic rate of return (ERR) of these physical components _37 to 41 percent vs. 27 to 39 percent at appraisal_ is highly satisfactory. Technical assistance, training programs and studies encountered delays and difficulties but were carried out achieving their objectives partially, yet at substantially higher costs; only the studies were completed as planned during the project. The project proved more difficult to execute than envisioned in the Staff Appraisal Report (SAR): the number of staff weeks for supervision of the project was doubled from that planned in the SAR.

In agreement with the ICR, the Operations Evaluation Department (OED) rates the project outcome as satisfactory and its institutional development as moderate. OED rates sustainability as uncertain (vs. likely in the ICR) because as acknowledged in the ICR, actions that will be taken by the Government under the subsequent Integrated Roads project (IRP) will determine the sustainability of the system established for maintaining the main road network. No evidence is given on the progress of the institutional component of that project for strengthening maintenance capacity. Bank performance is rated as satisfactory.

The main lesson concerns the importance of institutional development. Time-consuming organizational, managerial_ including contract management_and financing issues must be attended to early. Work of the (expatriate) consultants must be carefully monitored; otherwise engineering designs must be re-evaluated before the commencement of the project. Funding of public sector equipment pools must be carefully planned, monitored and supervised in order for them to be successful.

The ICR is inadequate. It could have been strengthened by clearly explaining the rationale for the project's substantial restructuring and by including a focused discussion of the institutional problems, so prominently represented in the lessons learned. Finally, the future operation section should have dealt with the completed components of this project rather than dealing exclusively with the ongoing Integrated Roads Projects.

The project may be audited.

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