IMPLEMENTATION COMPLETION AND RESULTS REPORT (IDA-34260) ON A CREDIT IN THE AMOUNT OF SDR 50.8 MILLION (US$67 MILLION EQUIVALENT)
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- Lucille Bonnet
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1 Public Disclosure Authorized Document of The World Bank Report No: ICR Public Disclosure Authorized IMPLEMENTATION COMPLETION AND RESULTS REPORT (IDA-34260) ON A CREDIT Public Disclosure Authorized IN THE AMOUNT OF SDR 50.8 MILLION (US$67 MILLION EQUIVALENT) TO THE REPUBLIC OF CHAD FOR A NATIONAL TRANSPORT PROGRAM SUPPORT PROJECT Public Disclosure Authorized Transport Unit Country Department AFCC1 Africa Region July 9, 2009
2 CURRENCY EQUIVALENTS (Exchange Rate Effective June 2008) Currency Unit = BEAC CFA CFA 1.00 = US$ US$ 1.00 = CFA 425 FISCAL YEAR January 1 to December 31 AAP ABC AIDS CAS CBA CDV CEMAC CISCP CJM DCA DEP DTS FCFA FER FM GDP HIV ICR IDA IEC IFR IRI IRR M&E MoU MTPTHU MTR ABBREVIATIONS AND ACRONYMS Africa Action Plan Community Base Associations Acquired Immune Deficiency Syndrome Country Assistance Strategy Community Based Associations Conseil et Dépistage Volontaire (HIV/AIDS Voluntary Testing Centers) Communauté économique et monétaire de l'afrique centrale (Economic and Monetary Community of Central Africa) Cellule Interministérielle de Suivi et de Coordination des Projet (Interministerial Monitoring and Coordination Unit) Commission de Jugement des Marchés (Procurement Review Commission) Development Credit Agreement Direction des Etudes et de la Programmation, Ministère de l Equipement et Ministère des Transports (Directorate of Studies and Programs) Departement des Transports de Surface (Department of Land Transport) CFA Franc Fonds d Entretien Routier (Road Maintenance Fund) Financial Management Gross Domestic Product Human Immunodeficiency Virus Implementation Completion Report International Development Association Information, Education and Communication Interim Financial Reports International Roughness Index Internal Rate of Return Monitoring and Evaluation Memorandum of Understanding Ministère des Travaux Publics, Transports, Habitat et Urbanisme (Ministry of Public Works, Transports, Housing and Urban Planning) Mid-Term Review
3 NGO NTP OPBC PAD PAProNAT PDO RMF RTTP SDR SSATP TSP2 Non Governmental Organization National Transport Program Output and Performance Based Contract Project Appraisal Document Projet d'appui au Programme National des Transports (National Transport Program Support Project) Project Development Objective Road Maintenance Fund Rural Transport and Travel Program Special Drawing Rights Sub-Saharan Africa Transport Policy Program Second Transport Sector Project Vice President: Country Director: Sector Manager: Project Team Leader: ICR Team Leader: ICR Primary Author: Obiageli Katryn Ezekwesili Mary A. Barton-Dock C. Sanjivi Rajasingham Kingson Khan Apara Kingson Khan Apara Peter Ngwa Taniform
4 CHAD NATIONAL TRANSPORT PROGRAM SUPPORT PROJECT CONTENTS Data Sheet... i A. Basic Information... i B. Key Dates... i C. Ratings Summary... i D. Sector and Theme Codes... ii E. Bank Staff... ii F. Results Framework Analysis... ii G. Ratings of Project Performance in ISRs... vi H. Restructuring (if any)... vii I. Disbursement Profile... vii 1. PROJECT CONTEXT, DEVELOPMENT OBJECTIVES AND DESIGN KEY FACTORS AFFECTING IMPLEMENTATION AND OUTCOMES ASSESSMENT OF OUTCOMES ASSESSMENT OF RISK TO DEVELOPMENT OUTCOMES ASSESSMENT OF BANK AND BORROWER PERFORMANCE LESSONS LEARNED COMMENTS ON ISSUES RAISED BY BORROWER/IMPLEMENTING AGENCIES/PARTNERS Annex 2. Outputs by Component Annex 3. Cost Benefit Analysis Annex 4. Bank Lending and Implementation Support/Supervision Processes Annex 5. Beneficiary Survey Results Annex 6. Stakeholder Workshop Report and Results Annex 8. Comments of Co-financiers and other Partners/Stakeholders Annex 9. List of Supporting Documents MAP
5 A. Basic Information Country: Chad Project Name: National Transport Program Support Project Project ID: P L/C/TF Number(s): IDA ICR Date: 07/15/2009 ICR Type: Core ICR Lending Instrument: SIL Borrower: REPUBLIC OF CHAD Original Total Commitment: XDR 50.8M Disbursed Amount: XDR 49.0M Revised Amount: XDR 49.0M Environmental Category: B Implementing Agencies: MINISTRY OF INFRASTRUCTURE Cofinanciers and Other External Partners: B. Key Dates Process Date Process Original Date Revised / Actual Date(s) Concept Review: 09/16/1999 Effectiveness: 03/21/2001 Appraisal: 04/25/2000 Restructuring(s): 06/16/2004 Approval: 10/26/2000 Mid-term Review: 02/17/2004 Closing: 07/31/ /31/2008 C. Ratings Summary C.1 Performance Rating by ICR Outcomes: Risk to Development Outcome: Bank Performance: Borrower Performance: Satisfactory Substantial Moderately Satisfactory Moderately Satisfactory C.2 Detailed Ratings of Bank and Borrower Performance (by ICR) Bank Ratings Borrower Ratings Quality at Entry: Moderately Satisfactory Government: Moderately Satisfactory Implementing Quality of Supervision: Satisfactory Moderately Satisfactory Agency/Agencies: Overall Bank Overall Borrower Moderately Satisfactory Moderately Satisfactory Performance: Performance: i
6 C.3 Quality at Entry and Implementation Performance Indicators Implementation QAG Assessments Indicators Performance (if any) Potential Problem Project Yes at any time (Yes/No): Problem Project at any time (Yes/No): Yes DO rating before Closing/Inactive status: Satisfactory Quality at Entry (QEA): Quality of Supervision (QSA): None None Rating D. Sector and Theme Codes Original Actual Sector Code (as % of total Bank financing) Central government administration Health 1 1 Roads and highways Theme Code (as % of total Bank financing) HIV/AIDS Nutrition and food security Rural markets Rural services and infrastructure E. Bank Staff Positions At ICR At Approval Vice President: Obiageli Katryn Ezekwesili Callisto E. Madavo Country Director: Mary A. Barton-Dock Robert Calderisi Sector Manager: C. Sanjivi Rajasingham Maryvonne Plessis-Fraissard Project Team Leader: Kingson Khan Apara Andreas Schliessler ICR Team Leader: Kingson Khan Apara ICR Primary Author: Peter Ngwa Taniform F. Results Framework Analysis Project Development Objectives (from Project Appraisal Document) The overall development objective was to support the implementation of Chad#s National Transport Program which aimed at reducing poverty and rural isolation and improving national food security through improved year-round access to markets and services especially in the rural areas. ii
7 The underlying justification of the National Transport Program (NTP) was that reliable year round access to markets and services was an essential ingredient in the broader effort to reduce poverty and improve food security, and this project contributes towards achieving this goal. Revised Project Development Objectives (as approved by original approving authority) Although the project was restructured in 2004 and the scope of some components revised, its project development objective remained the same. (a) PDO Indicator(s) Indicator Indicator 1 : Value quantitative or Qualitative) Baseline Value Original Target Values (from approval documents) Formally Revised Target Values Actual Value Achieved at Completion or Target Years 10 percent decrease in average rates (in real terms) for goods and passenger transport, measured in price per ton- km and passenger-km, for transport between N'Djamena and the various provincial capitals Not Available 10% decrease in average rates for goods and passenger transport 50% and 39% decrease in vehicle operating costs for trucks and buses, respectively Date achieved 10/31/ /31/ /15/2008 Comments This original indicator in the PAD was difficult to measure, and was replaced by (incl. % the above proxy (decrease in vehicle operating costs). achievement) All-year rideability of at least 1800 km of all-year National Road Network Indicator 2 : achieved by end of Value quantitative or 500 km 1800 km 1900 km Qualitative) Date achieved 12/31/ /31/ /31/2007 Comments (incl. % This indicator was achieved above target by 5% achievement) Indicator 3 : At least 55% of all-year National Road Network in good or fair condition during dry season (by end of 2005). Value quantitative or 20 % 55 % 50% Qualitative) Date achieved 12/31/ /31/ /31/2007 Comments (incl. % achievement) 91% achieved. This includes 1020 km of paved roads and 970 km of permanent earth roads. See Paragraph 35 for details of some reasons why this was not fully achieved. iii
8 (b) Intermediate Outcome Indicator(s) Indicator Baseline Value Original Target Values (from approval documents) Formally Revised Target Values Actual Value Achieved at Completion or Target Years Indicator 1 : Km of roads rehabilitated and upgraded to paved standard Value (quantitative 0 km 104 km 104 km or Qualitative) Date achieved 12/31/ /31/ /31/2007 Comments (incl. % achievement) The appraisal target was 100 percent achieved, but after a three years delay and a 74 percent cost increase above the originally estimated cost of US$25.36 million. Indicator 2 : Km of existing paved roads rehabilitated Value (quantitative km 286 km or Qualitative) Date achieved 12/31/ /31/ /31/2007 Comments (incl. % achievement) The appraisal target was 100 percent achieved, but after a three year delay and a 74 percent cost increase above the originally estimated cost of US$25.36 million Indicator 3 : Performance-based contract for Management and Maintenance of Roads awarded by end of Value (quantitative Not awarded Contract awarded Contract warded or Qualitative) Date achieved 12/31/ /31/ /25/2002 Comments (incl. % 100 percent achieved, with a delay of two months achievement) Indicator 4 : Average travel speed of a 2-wheel-drive car of 50 km/hr by 2003 and thereafter on the National Road Network. Value (quantitative 0 50 km/hour 80 km/hour or Qualitative) Date achieved 12/31/ /31/ /31/2007 Comments (incl. % achievement) 160 percent achieved. The two road sections concerned, which were not passable most of the year, now have reference speeds of at least 80 km/hour, portraying roads in much better condition than before the project Indicator 5 : Awareness campaign implemented by end of Value Awareness No awareness (quantitative or Qualitative) No awareness campaign campaign implemented campaign implemented Date achieved 12/31/ /31/ /31/2007 Comments (incl. % achievement) 0 % achieved. Not implemented because of several challenges and delays in its execution including limited collaboration between the Ministry of infrastructure and the Municipal Council of N#Djamena. iv
9 Indicator 6 : Accident Data collection and monitoring system implemented by end of Value No accident data An operational Accident Data Accident Data collection and (quantitative collection and monitoring collection and monitoring system or Qualitative) system monitoring system put in place put in place but not operational Date achieved 12/31/ /31/ /31/2007 Comments (incl. % achievement) The system put in place was not operational because of several challenges and delays in its execution including limited collaboration between the Police and the Land Transport Department on the collection and analysis of accident data. Indicator 7 : Rural Transport Strategy developed by end of 2003 Value (quantitative or Qualitative) No strategy in existence Strategy developed Development of an investment program for rural roads that was to serve 17 regions of the country Date achieved 12/31/ /31/ /31/2005 Instead of a transport strategy, a Priority Investment Program for rural roads to Comments serve the 17 regions of the country was developed. This was judged during the (incl. % MTR as a practical response to the needs of the rural poor who constitute the achievement) majority. Establishment of a Second Generation Road Maintenance Fund and Board fully Indicator 8 : functional by mid Value (quantitative or Qualitative) No Road Fund in existence Second Generation Road Maintenance Fund and Board in place Second Generation Road Maintenance Fund and Board Date achieved 12/31/ /30/ /31/2007 Comments (incl. % 100% achieved achievement) G. Ratings of Project Performance in ISRs No. Date ISR Archived DO IP Actual Disbursements (USD millions) 1 12/14/2000 Satisfactory Satisfactory /24/2001 Satisfactory Highly Satisfactory /21/2001 Satisfactory Satisfactory /01/2002 Satisfactory Satisfactory /30/2002 Satisfactory Satisfactory /23/2002 Satisfactory Satisfactory /21/2003 Satisfactory Satisfactory /28/2003 Satisfactory Satisfactory /21/2004 Satisfactory Unsatisfactory v
10 10 06/18/2004 Satisfactory Satisfactory /15/2004 Satisfactory Satisfactory /09/2005 Satisfactory Satisfactory /27/2005 Satisfactory Satisfactory /20/2005 Satisfactory Satisfactory /25/2006 Satisfactory Satisfactory /26/2006 Satisfactory Satisfactory /29/2007 Satisfactory Satisfactory /21/2007 Satisfactory Moderately Satisfactory H. Restructuring (if any) Restructuring Date(s) Board Approved PDO Change ISR Ratings at Restructuring DO Amount Disbursed at Restructuring in USD millions 06/16/2004 N S U IP Reason for Restructuring & Key Changes Made To enable the attainment of component objectives. Reduced scope of the small components 3 and 4 to meet financing gap for the big components 1 and 2. I. Disbursement Profile vi
11 1. PROJECT CONTEXT, DEVELOPMENT OBJECTIVES AND DESIGN 1.1 Context at Appraisal 1. The Republic of Chad is one of the world s poorest countries. In 1999, an estimated 80 percent of its population of seven million lived on less than a dollar a day. This situation was as a result of a combination of several factors, including: political instability, rapid population growth, and an unfavorable physical environment with a low population density over a large, landlocked, and arid country covering 1.3 km 2. As identified in the Country Assistance Strategy (CAS) dated May 1999, Chad at the time had very limited prospects, unless it seized the opportunity of exploiting its oil and made the best use of the income generated. The gross domestic product (GDP) at appraisal was a negative 0.7 percent but it was projected to increase steadily during the implementation phase of the project due to oil revenues. GDP did indeed grow steadily from its preproject level to a 38 percent high in 2005 when Chad started marketing its oil. Nonetheless, it was a rather short-lived euphoria as GDP has since plummeted to its current level of 1.3 percent. In addition, this review is taking place within an even more tumultuous country context than was the case in 1999, as it is marked by civil unrest resulting from constant military confrontations between government forces and rebel insurgents based in neighboring Sudan (although the government holds a contrary view that the political environment is generally stable, compared to the situation that prevailed in the 1990s (Annex 7). The government s contribution to this Implementation Completion Report (ICR), however, recognizes that peace and security throughout the country represent a great challenge for the government and will continue to divert financial resources that might have been used for development projects. 2. Bank operations have been suspended twice since 2007, including the temporary closure of the country office during most of 2008, due to poor governance and repeated rebel attacks on the capital city of N Djamena. The causes and effects of the difficult general dialogue with the Bank, a situation that was not foreseen at project inception, later became a major constraint to the Bank s entire portfolio in Chad. This project and other Bank-financed operations need to be assessed with this in mind. In this respect, and despite some design weaknesses and implementation delays as discussed in this ICR, the substantial outcome and achievements of this project in such a difficult country environment are worthy of praise, and the quality of decisions taken by both the government and the Bank teams during implementation to minimize these externalities needs to be recognized. 3. The project was prepared within a context of extreme isolation and poor internal integration of Chad. A limited and unreliable all-year-round transport system generated numerous agricultural enclaves, where the high cost of transport hindered the inflow of inputs and consumer goods in rural areas, while hampering the outflow of production to food-deficit regions and urban centers. The government feels that the problems of isolation and poverty targeted under the project are complex and so deeply rooted that they require a long time to resolve, and would thus like to see a follow-up operation along the same lines as this project. ` 1
12 1.2 Original Project Development Objectives (PDO) and Key Indicators 4. The PDO of the project was to support the implementation of Chad s National Transport Program (NTP) which aimed at reducing poverty and rural isolation and improving national food security through improved year-round access to markets and services especially in the rural areas. The project was to contribute towards achieving this goal, through reliable year round access to markets and services as this is an essential ingredient in the broader effort to reduce poverty and improve food security. 5. The specific performance indicators for the Bank-financed project, National Transport Program Support Project, in French Projet d Appui au Programme National des Transports (PAProNaT) which is a part of a much larger and multi-sectoral effort of the Government and the entire donor community, were consistent with the overall indicators for the NTP, but focused on specific physical outputs and on impacts in the limited geographical areas in which the project interventions took place. 6. The outcome/impact indicators against which the Government and IDA agreed to measure the project performance include: A 10 percent decrease in average rates in real terms for goods and passenger transport (measured in price per ton and passenger/km respectively) for transport between the provincial capitals East of N'Djamena and the national capital N'Djamena (by end 2005); Year round access of at least 1800 km of all-year National Road Network achieved (by end 2005); At least 55 percent of all-year National Road Network in good or fair condition during dry season (by end 2005). The output indicators were: Approximately 100 km of the core National Road Network are upgraded to paved standard (by end 2004); Periodic Maintenance and Strengthening of at least 200 km of existing paved roads completed (by end 2004); Establishment of a Traffic Accident Data collection and evaluation system on a National level (by end 2002); First Road Safety Awareness media campaign completed (by end 2003); Performance-based Road Management and Maintenance contract for approximate 441 km of unpaved roads awarded (by end 2001); Average travel speed of 50 km/hour for 2-wheel-drive cars achieved at all times on the all-season National Road Network (by end 2005); National Strategy for Rural Travel and Transport completed (by end 2003). 7. The positive results of the project, as discussed in this report, portray the overall success of the NTP which will be evaluated with support from the ongoing Bankfinanced CEMAC Transport and Transit Facilitation Project. ` 2
13 1.3 Revised PDO (as approved by original approving authority) and Key Indicators, and reasons/justification 8. There were no formal changes made to the PDO or key indicators during the implementation of the project. 1.4 Main Beneficiaries 9. The primary target groups identified in the PAD were the rural population at large living in the wider zone of influence of the National Road Network, through better access and lower transport costs; and road users, through improved road conditions and reduced vehicle operating costs. 1.5 Original Components (as approved) Component 1 Road Investment (US$60.90 million; Bank financing US$44.26 million) 10. The objective of this component was to contribute to improved year-round access to markets and services by rehabilitating or upgrading 390 km of key links in the National Road Network. Its two sub-components were: (i) road upgrading and paving, which was to upgrade the 104 km Ngoura-Bokoro road section of the West-East corridor from an unpaved road in poor condition to a paved all-season road; and (ii) rehabilitation of about 286 km of existing paved roads to extend their useful life. While the roads to be rehabilitated were still in reasonably good condition, it was deemed necessary and timely to undertake preventive road strengthening works as they had began to show increasing signs of aging and deterioration. Component 2 Pilot Program for Performance-based Management and Maintenance for unpaved roads (US$19.57 million; Bank financing US$14.24 million) 11. This component was designed to contribute to improved year-round access to markets and services while testing a new performance-based contracting method through a pilot contract on unpaved roads during a four-year period. The pilot contract covered the initial upgrading and the maintenance of a stretch of 441 km of unpaved main road along the main East-West road axis between N Djamena and Abeché: (i) Bokoro Bitkine -143 km; ((ii) Bitkine - Mongo-59 km; (iii) Mongo - Mangalmé-129 km; (iv) Mangalmé - Oum Hadjer 110 km to ensure all-year access. Component 3 Road Safety (US$2.04 million; Bank financing US$1.50 million) 12. This component was designed to promote road safety in Chad through: (i) the establishment of a traffic accident data collection and evaluation system; (ii) the financing of a road safety awareness campaign; and (iii) the implementation of physical measures to improve accident-prone spots in the capital city of N Djamena and other urban areas and (iv) conducting a national road safety study and action plan. ` 3
14 Component 4 Rural Transport Strategy Development (US$1.24 million; Bank financing US$1 million) 13. The objective of this component was to contribute to facilitate access to the rural population, mostly poor, to markets and to economic and social goods and services (inputs to rural production, markets, health clinics, government administrative services, schools, etc.). This component was divided into five sub-components: (i) studies, to stimulate discussion and generate recommendations for an overall Rural Transport strategy; (ii) workshops, to ensure a broad-based participatory approach during the definition of the Rural Transport Strategy; (iii) study tours to visit other countries in the region with existing Rural Transport Strategies; (iv) publicity to share, experience and disseminate information; and (v) support to establishing a Rural Transport and Travel Program (RTTP) secretariat in Chad. Component 5 Institutional Support and Capacity-Building (US$6.27 million; Bank financing US$5 million) 14. The objective of this component was to strengthen the capacity of the Ministry of Public Works, Transport, Housing and Urban Planning (MTPTHU) and other stakeholders in the transport sector, both to implement the NTP and in a more general sense, to carry out their assigned tasks and functions. Specific sub-components included: (i) training targeted at both the public and the private sectors, including nongovernmental organizations (NGOs) such as transporters unions; (ii) consultant services for technical and financial audits, support to the Road Maintenance Fund (RMF), transport sector pre-investment and policy studies; (iii) improvements to office infrastructure and purchase of some office equipment; and (iv) funding of incremental operating costs of the Inter-ministerial Monitoring and Coordination Unit (CISCP) and other units involved in project execution. Component 6 HIV-AIDS and Transport (US$0.61 million; Bank financing US$0.5 million) 15. This component s goal was to contribute to reducing the risk of increased HIV/AIDS infections along major domestic and international roads in Chad, through the promotion of AIDS awareness and education campaigns. The component was to finance technical advisory services, media awareness and workshops. Revised Components 16. The project underwent revision on components 1, 3 and 4 as described in this section. These changes, however, did not affect the objective of the project, and hence, did not require Board approval. 17. The road sections to be strengthened under Component 1 were part of the North- South main road axis of Chad between Ngaoundere in the South and Lake Chad in the North; they were still in reasonably good condition at the time of project appraisal. However, some important sections suffered unexpected and catastrophic pavement failure soon thereafter, due to heavy traffic by overloaded trucks used for the construction of ` 4
15 another road further to the South. It should be noted that overload on a pavement structure has been shown to have a rapid and exponential adverse effect which can lead to fatigue and subsequently pavement failure within a short period if nothing is done. The complete redesign of the road works required major reconstruction as opposed to the minor rehabilitation as originally planned. This was the right solution under the circumstances, the additional cost notwithstanding. The resulting heavy cost increase made it impossible for the project to fund the upgrading of the road between Ngoura and Bokoro from the IDA credit. During the mid-term review (MTR) it was agreed to drop the paving of the road between Ngoura and Bokoro from IDA financing, and a case was made for the government to finance it from its oil revenues. 18. The government readily accepted to use its oil revenues to fund the upgrading of the Ngoura Bokoro road. Its responsiveness to this unforeseen situation that could have compromised a major project outcome is worthy of praise. Legal project documentation therefore does not reflect the true financial contribution of the government to the project which more than doubled from US$24 million to US$51 million (see Annex 1, Table percent as originally envisaged and shown in the Credit Agreement, to 51 percent in actual practice) when it financed the upgrading of the Ngoura Bokoro road. 19. The Road Safety component and the Rural Transport Strategy components were also reduced in scope and restructured as discussed in Section 3 below (Outputs by Components). 1.6 Other significant changes 20. Amendment of DCA. There were three reallocations of credit proceeds. The first one, early on during the project execution in 2001 which changed the disbursement percentages for three of the six expenditure categories and was made in response to changes in the Chadian tax legislation. Contrary to previous arrangements, under which donor-financed contracts were tax-exempt, the new legislation now made it mandatory, that all contracts signed include all taxes (including the 18-percent Value-Added-Tax) and custom duties, if applicable. This increased the disbursement percentages of three categories (civil works, goods and consulting services). The second amendment made after the mid-term review in 2004 was due to restructuring of the project which constituted cancellation of the road paving sub-component (Ngoura-Bokoro road which the government agreed to finance with the oil revenues) and the redesign of the rural transport and road safety components (Schedule 2 of DCA). The amendment also included reallocation of resources under Schedule 1 of the DCA, mostly to civil works category in order to cover the higher-than-expected cost for civil works; consulting services for supervision of works due to increase in duration of works; reduction in purchase of goods, due to availability of government funds for this purpose, and increase in operating costs. The third which was done in 2005, at which time, the extension of the project was to fine-tune final expenditure estimates for the various categories for the remaining project duration. 21. Extension of the Project. In October 2005, the project closing date was extended by eighteen months, from July 31, 2006 to January 31, 2008, to complete the large works ` 5
16 contract for the rehabilitation of Guelengdeng N Djamena Dandi which was delayed due to cancellation of the original works contract as the previous contractor was unable to execute the works (see also paragraph 35), thus resulting in loss of time. Without the completion of this contract, the objective of the project could not have been fully met. 22. Another objective of the extension was to keep the Bank involved as a leader and coordinator in the increasingly sensitive country dialogue involving key donors. The dialogue mainly covered emerging transport budgetary issues, such as the overall budgetary imbalance caused by unplanned spending on road and social infrastructure investments. These were becoming a major concern for the Bank, the International Monetary Fund and other donor partners. 23. Extension of the ICR delivery date. A related change was the extension by almost twelve months of the delivery date of this ICR. At the time when this ICR was to be prepared, civil unrest in Chad caused the closure of the Country office and rendered impossible the interaction with the government which is a requirement for the completion of an ICR. 2. KEY FACTORS AFFECTING IMPLEMENTATION AND OUTCOMES 2.1 Project Preparation, Design and Quality at Entry Preparation 24. Project preparation benefited from the existence of a previous IDA-funded Second Transport Sector Project (TSP2). Through the TSP2, the Bank was able to support the government in the preparation of the broad National Transport Program (NTP). This included: (i) the funding of preparatory studies and participatory workshops, (ii) substantial technical support by Bank staff to the government in the definition of key transport sector policies to be reflected in the National Transport Sector Program, (iii) a strong role of Bank staff in the coordination between the government and numerous donor agencies, with the objective to ensure the financial support of those donors for the investments planed under the National Transport Sector Program. This allowed the government to actually mobilize from external sources the full US$460 million of investment funding required under the program, with the Bank (IDA) providing only about 15 percent of the total amount. The existence of a detailed Transport Sector Program and Investment Plan made it easier for donors to provide funding without having to spend additional time and resources on project preparation. On the Bank s side, project preparation (and support to the preparation of the government s NTP) was conducted by a team of specialists with the right skills mix (see Annex 4). A Project Preparation Facility in the amount of US$500,000 helped the government to fund some of the preparation activities. Design studies and cost estimates were completed prior to project appraisal, and their conclusions and recommendations were reflected in appraisal decisions. The preparation of the project also took much less time than the typical average of two years for similar infrastructure projects in Africa, for two reasons: (i) some of the preparation activities were carried out under the earlier TSP2 project, and (ii) ` 6
17 there was a well-established implementing agency staffed with an experienced manager and well-qualified accounting staff. Hence project preparation is rated as Satisfactory. Project Design 25. The project was consistent with the Bank's CAS for Chad, discussed May 23, 2000, which emphasized the importance of removing infrastructure constraints toward private sector-led growth and poverty alleviation. It specifically proposed to concentrate the Bank s assistance in the critical areas of education, health, rural development and transport. The project and its development objectives were equally consistent with (and were directly derived from) Chad s National Transport Program (NTP) as discussed in Section 1 above. It is also consistent with the recent CAS of the year 2003 which emphasized the alleviation of infrastructure constraints to help reduce vulnerability, especially for the poor, 26. Project design was innovative and responsive to Chad s specific country conditions. The definition and economic analysis of transport sector investments under the NTP and the project did not depend solely on traditional economic appraisal methods which do not favor areas with low population densities and low levels of economic activities, such as in Chad. Applying traditional economic analysis and typical minimum threshold values for Internal Rate of Return (IRR) would have prevented most road investments in Chad. Instead, the NTP and the project focused on the functionality of a coherent backbone national road network which was needed to provide access to markets and services, and ensure the internal integration of the country. The project also introduced the innovative concept of Output and Performance based Road Contracts (OPRC) to Chad and to Africa, as this was the first time that such a concept was executed in Africa. Its success has led the government to continue using OPRC contracts with its own funding. Given its invaluable educational value, this contract was considered to serve as showcase and field training for road maintenance contractors and consultants. Other countries have followed suit and are now also using such contracts. Other donor agencies (especially the European Commission) are now utilizing OPRC contracts in several countries. The advantage of this type of contract as against the traditional road maintenance contract is that the contractor is not paid for actual work done but rather for a specific road service level reached and sustained over a multi-year contract duration. This is more beneficial for the road users themselves who are more concerned with the road surface and equipment than its structure. It also allows the contractor to organize the works more freely and effectively to reach the desired service level. It also requires less supervision from the government than is required for traditional quantity based works. 27. Project Design is rated as Satisfactory. Quality at Entry 28. The design of the National Transport Program and of the project rightly included a fair amount of technical assistance to support project implementation, as a way of mitigating risks that could be associated with the relatively weak technical capacity of the ` 7
18 implementing agency. In particular, the regular technical audits executed by an independent auditor are to be mentioned, as they served not only as a control mechanism, but also as a useful technical support to the Ministry of Infrastructure. 29. The Project Appraisal Document (PAD) documented the project and its background particularly well and assessed key potential risks that could have jeopardize implementation. A shortcoming, however, was the lack of agreed monitoring and measurable indicators for the smaller project components and sub-components which were to be developed only during implementation (HIV/AIDS and Transport, Environmental Management Plan). Also, at appraisal some of the key project indicators had no baseline data as shown in Table 2.1 of Annex 2. One must keep in mind that at the time when this project was appraised, the M&E was still in its infancy stage and had not been developed as it is now for all Bank funded projects. 30. Lessons of earlier operations, notably the Second Transport Sector Project, were taken into account in the design of the National Transport Program and of the project, and this was described well in the PAD. Also, experience from other Bank-funded projects and of the Sub-Saharan Africa Transport Program (SSATP) was taken into consideration in the design of the Rural Roads component, including the choice of suitable indicators and the financing methods for rural roads. 31. A highly participatory approach was used during the preparation of the NTP which included many stakeholders within Chad as well as the donor community active in the sector, in order to support the substantial funding for the government s National Transport Program. 32. The design of the HIV/AIDS component of the project was based on the recognition that a joint approach of the Health and Transport sectors was needed to achieve the expected outcomes. As a result, a five year program of transport-specific activities was developed by the staff of Chad's National AIDS Program, Programme National de Lutte contre le SIDA (PNLS) with input and support from the transport sector, in particular the National Trucker's Union Syndicat National des Chauffeurs Tchadiens (SNCT) who led the implementation of the program. The project thus avoided duplication of efforts, by supporting and strengthening the existing government program PNLS through the provision of funding for the transport sub-program of the PNLS. 2.2 Implementation Factors within the control of the implementing agency/government 33. The project faced a number of challenges during implementation which led to delays and/or increased costs. The most important challenge occurred under the Road Investment component as explained in Paragraphs 17 and 18 above. 34. The Bank conducted a Mid Term Review (MTR) of the project in February 2004, and assessed the overall progress of the project toward achieving its development objectives. Based on the findings of the MTR, the Bank team made recommendations for the remaining phase of the project. The main recommendations related to: (i) the ` 8
19 reduction in scope of the road safety and the rural transport components, with the costs savings to be allocated to the Road Maintenance Component, and (ii) the mobilization of additional financing by the government for the Ngoura-Bokoro road upgrading works, as further developed and explain in section 3 below. 35. On December 29, 2005, the National Assembly passed amendments to the Petroleum Revenue Management Law, substantially weakening programs that were intended to improve the lives of poor people and instead allow for increased spending on justice, territorial administration, and security. As a result, the Bank subsequently withheld new credits, suspended disbursement of IDA funds allocated to Chad, and froze the escrow oil revenue account. Following the signing of a Memorandum of Understanding (MoU) between the Bank and the Government of Chad on July 13, 2006, these sanctions were lifted. The six month sanction slowed implementation progress slightly but did not have any dramatic consequences on the project. 36. Other factors within the control of the agency/government are discussed in Section 2.4 below on safeguards. Factors outside the control of the implementing agency/government 37. A major setback during the initial implementation phase was the termination of the major civil works contract for the strengthening of existing paved roads under Component 1, when it became evident that the selected contractor, although a large international firm, was in financial distress and incapable of executing the contract. The termination of the contract and the re-launching through a new procurement process took eighteen months. It is estimated that the default of the contractor may have generated a cost to the government of up to US$6.7 million, essentially due to the additional works required to remedy the accelerated physical deterioration of the road that continued until the works resumed. 38. Another major negative factor for the project was the significant depreciation of the SDR (in which the IDA credit was denominated) vis-à-vis the national currency FCFA (in which most contracts were signed) resulting in a shortfall of Bank financing. The exchange rate of SDR1.00 = CFA 950 at negotiations fell steadily by 41 percent to a low CFA 560 at project completion. 2.3 Monitoring and Evaluation (M&E) Design, Implementation and Utilization 39. M&E design: In addition to the qualities discussed in Section 2.1, this project included two key monitoring innovations: The OPBC concept which was designed with emphasis on results as opposed to the classical input-based approach of contract implementation. This enabled the supervising engineer and monitoring staff to spend quality time focusing on output delivery (specified road service levels). The other monitoring innovation was the introduction in the project of the concept of recurring technical audits, designed to: (i) detect mistakes and deficiencies in all technical aspects of the project, and (ii) provide neutral technical advice to the government. An internationally reputed highway engineer consultant was recruited as a technical auditor ` 9
20 on a long term contract to visit Chad three times a year over five years to oversee and correct discrepancies especially on the complex civil works contracts and provide additional technical assistance to the implementing agency when and where needed. 40. M&E implementation: Monitoring and evaluation was considered satisfactory throughout project implementation until the last ISR which rated it moderately unsatisfactory because of inadequate data on a major indicator concerning transport costs. This ICR endorses this final rating of moderately unsatisfactory, which reflects a weakness that is equally shared by the government in its contribution to this ICR (Annex 7). Although the indicators used were for the most part measurable, the first indicator 10 percent decrease in average rates in real terms for goods and passenger transport, on the two road components that took 90 percent of project funding, was found to be too complicated to measure and depended on many variables which were external to the project. This difficulty was reflected at the end of the project by the lack of credible data for this indicator, despite efforts during implementation to improve data collection, including transferring this responsibility from the Ministry of Infrastructure to an independent agency. 41. Nonetheless, a beneficiary survey carried out at the end of the project by a government consultant to define proxies for this indicator established a 50 percent decrease in vehicle operating costs for articulated, medium and heavy trucks and 39 percent for buses. Other proxy indicators such as reduced travel time and increased traffic have been factored into the economic analysis discussed in Section 3 and Annex 3 of this report. 42. Project monitoring was under the responsibility of the Ministry of Infrastructure through its technical departments and the CISCP. Reporting was consolidated in a single quarterly report covering all major activities by the CISCP. Financial management audits were carried out promptly (except in the last year for the reasons discussed in Paragraph 45 below) and their recommendations were taken into account during further implementation. Monitoring was further enhanced by an experienced international highway engineer who conducted frequent reviews on all aspects of the project and helped prepare a road maintenance strategy as part of the NTP agenda. 43. M&E utilization: Other project indicators were used to monitor project progress and achievements under the NTP. Data on the budget and on the road investment costs was used by macroeconomic missions for various analyses. The same data has been used for this ICR. 44. Supervision missions, external reviews and audits, were used as a basis for assessing the achievement of targets and planning the way forward. The project was the subject of two supervision missions on average every year. The aide-memoires were complete and detailed, and went beyond the mere supervision of the project. During each supervision mission, the Bank team carried out a broad review of the transport sector and made detailed recommendations to the government; these recommendations were generally followed. In practice, the Bank team provided continuous broad technical ` 10
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