Document of The World Bank FOR OFFICIAL USE ONLY Report No: ICR00006435 IMPLEMENTATION COMPLETION AND RESULTS REPORT CREDITS 4931-PG AND 5404-PG ON A CREDIT IN THE AMOUNT OF SDR 109.8 MILLION (US$169.5 MILLION EQUIVALENT) TO THE INDEPENDENT STATE OF PAPUA NEW GUINEA FOR THE PNG ROAD MAINTENANCE AND REHABILITATION PROJECT II December 21, 2023 Transport Global Practice East Asia and Pacific Region CURRENCY EQUIVALENTS (Exchange Rate Effective April 28, 2023) Currency Unit = Papua New Guinea Kina (PGK) PGK 3.51= US$1.00 US$1.00 = SDR 0.58 FISCAL YEAR January 1 - December 31 ABBREVIATIONS AND ACRONYMS AF Additional Financing AMB Asset Management Branch (of the Department of Works/ Department of Works and Highways) CAS Country Assistance Strategy CESMP Contractor’s Environmental and Social Management Plan CPF Country Partnership Framework DoW Department of Works DoWH Department of Works and Highways E&S Environmental and Social ECR East Cape Road EIPM Employer’s Interim Project Manager EIRR Economic Internal Rate of Return EPM Employer’s Project Manager EPM2 Second Employer’s Project Manager ESIA Environmental and Social Impact Assessment ESMF Environmental and Social Management Framework FCS Fragile and Conflict-Affected Situations FM Financial Management GDP Gross Domestic Product GoPNG Government of Papua New Guinea HDM-4 Highway Development and Management Module 4 IRI International Roughness Index LNG Liquified Natural Gas MMU Monitoring and Management Unit NPC National Procurement Commission NPV Net Present Value NRNS National Road Network Strategy NRA National Road Authority OPBRC Output- and Performance-Based Road Contract PAD Project Appraisal Document PBC Performance-Based Contracting PDO Project Development Objective PNG Papua New Guinea PMV Public Motor Vehicle RAMS Road Asset Management System RAP Resettlement Action Plan RED Roads Economic Decision Model RMRP Road Maintenance and Rehabilitation Project RMRPII Road Maintenance and Rehabilitation Project II SES Socioeconomic Surveys SH/SEA Sexual Harassment/Sexual Exploitation and Abuse TTL Task Team Leader VO9 Variation Order # 9 Regional Vice President: Manuela V. Ferro Country Director: Stephen N. Ndegwa Regional Director: Sudeshna Banerjee Practice Manager: Benedict L. J. Eijbergen Task Team Leader(s): Tawia Addo-Ashong, Satoshi Ogita, Fiona Collin ICR Main Contributor: Damon C. Luciano TABLE OF CONTENTS DATA SHEET .......................................................................................................................... 1 I. PROJECT CONTEXT AND DEVELOPMENT OBJECTIVES ....................................................... 6 A. CONTEXT AT APPRAISAL .........................................................................................................6 B. SIGNIFICANT CHANGES DURING IMPLEMENTATION ................................................................8 II. OUTCOME .................................................................................................................... 12 A. RELEVANCE OF PDOs ............................................................................................................ 12 B. ACHIEVEMENT OF PDOs (EFFICACY) ...................................................................................... 12 C. EFFICIENCY ........................................................................................................................... 15 D. JUSTIFICATION OF OVERALL OUTCOME RATING .................................................................... 15 E. OTHER OUTCOMES AND IMPACTS (IF ANY) ............................................................................ 15 III. KEY FACTORS THAT AFFECTED IMPLEMENTATION AND OUTCOME ................................ 17 A. KEY FACTORS DURING PREPARATION ................................................................................... 17 B. KEY FACTORS DURING IMPLEMENTATION ............................................................................. 17 IV. BANK PERFORMANCE, COMPLIANCE ISSUES, AND RISK TO DEVELOPMENT OUTCOME .. 20 A. QUALITY OF MONITORING AND EVALUATION (M&E) ............................................................ 20 B. ENVIRONMENTAL, SOCIAL, AND FIDUCIARY COMPLIANCE ..................................................... 21 C. BANK PERFORMANCE ........................................................................................................... 23 D. RISK TO DEVELOPMENT OUTCOME ....................................................................................... 23 V. LESSONS AND RECOMMENDATIONS ............................................................................. 24 ANNEX 1. RESULTS FRAMEWORK AND KEY OUTPUTS ........................................................... 26 ANNEX 2. BANK LENDING AND IMPLEMENTATION SUPPORT/SUPERVISION ......................... 35 ANNEX 3. PROJECT COST BY COMPONENT ........................................................................... 37 ANNEX 4. COUNTERPART FINANCING .................................................................................. 38 ANNEX 5. EFFICIENCY ANALYSIS ........................................................................................... 39 ANNEX 6. THEORY OF CHANGE AND RESULTS FRAMEWORK ANALYSIS ................................. 45 ANNEX 7. BORROWER, CO-FINANCIER AND OTHER PARTNER/STAKEHOLDER COMMENTS ... 48 ANNEX 9. SUPPORTING DOCUMENTS .................................................................................. 49 MAP .................................................................................................................................... 50 The World Bank PNG Road Maintenance and Rehabilitation Project II (P119471) DATA SHEET BASIC INFORMATION Product Information Project ID Project Name P119471 PNG Road Maintenance and Rehabilitation Project II Country Financing Instrument Papua New Guinea Investment Project Financing Original EA Category Revised EA Category Partial Assessment (B) Partial Assessment (B) Organizations Borrower Implementing Agency The Independent State of Papua New Guinea Department of Works Project Development Objective (PDO) Original PDO The project development objectives are to: (i) improve road transport to project areas through providing satisfactory physicalcondition and safety in selected roads; and (ii) strengthen institutional arrangements for road maintenance including theparticipation ofthe private sector and communities. Revised PDO The project development objectives are to: (i) improve road transport to project areas through providing satisfactory physicalcondition and safety in selected roads; and (ii) strengthen institutional arrangements for road maintenance, including theparticipationof the private sector and communities; and (iii) enhance road-related economic opportunities for women. Page 1 of 50 The World Bank PNG Road Maintenance and Rehabilitation Project II (P119471) FINANCING Original Amount (US$) Revised Amount (US$) Actual Disbursed (US$) World Bank Financing 43,000,000 42,979,672 39,744,926 IDA-49310 126,500,000 119,859,241 102,130,329 IDA-54040 Total 169,500,000 162,838,913 141,875,255 Non-World Bank Financing 0 0 0 Borrower/Recipient 40,500,000 0 0 Total 40,500,000 0 0 Total Project Cost 210,000,000 162,838,913 141,875,256 KEY DATES Approval Effectiveness MTR Review Original Closing Actual Closing 03-May-2011 30-Aug-2011 09-Oct-2017 31-Jul-2016 28-Apr-2023 Page 2 of 50 The World Bank PNG Road Maintenance and Rehabilitation Project II (P119471) RESTRUCTURING AND/OR ADDITIONAL FINANCING Date(s) Amount Disbursed (US$M) Key Revisions 09-Jan-2014 5.47 Additional Financing Change in Project Development Objectives Change in Results Framework Change in Components and Cost 05-May-2016 30.27 Change in Results Framework Change in Components and Cost Change in Loan Closing Date(s) Change in Financing Plan Reallocation between Disbursement Categories Change in Disbursements Arrangements Change in Legal Covenants 15-Apr-2021 108.40 Change in Results Framework Change in Loan Closing Date(s) Reallocation between Disbursement Categories Change in Implementation Schedule 02-May-2023 137.55 Cancellation of Financing Reallocation between Disbursement Categories KEY RATINGS Outcome Bank Performance M&E Quality Moderately Satisfactory Moderately Satisfactory Modest RATINGS OF PROJECT PERFORMANCE IN ISRs Actual No. Date ISR Archived DO Rating IP Rating Disbursements (US$M) 01 21-Sep-2011 Satisfactory Satisfactory 0 02 14-Aug-2012 Satisfactory Moderately Satisfactory 0 03 01-Apr-2013 Satisfactory Moderately Satisfactory 0 04 23-Oct-2013 Satisfactory Moderately Satisfactory 3.91 05 15-Jun-2014 Satisfactory Satisfactory 12.54 06 05-Jan-2015 Satisfactory Satisfactory 19.85 Page 3 of 50 The World Bank PNG Road Maintenance and Rehabilitation Project II (P119471) 07 07-Jun-2015 Satisfactory Satisfactory 22.32 08 06-Dec-2015 Satisfactory Satisfactory 27.43 09 16-Jun-2016 Satisfactory Moderately Satisfactory 32.07 10 15-Dec-2016 Satisfactory Moderately Satisfactory 49.33 11 26-Jun-2017 Satisfactory Moderately Satisfactory 55.31 12 04-Dec-2017 Moderately Satisfactory Moderately Unsatisfactory 59.94 13 27-Jun-2018 Moderately Satisfactory Moderately Unsatisfactory 74.06 14 25-Nov-2018 Satisfactory Moderately Unsatisfactory 80.49 15 28-May-2019 Satisfactory Moderately Satisfactory 86.72 16 05-Dec-2019 Satisfactory Moderately Satisfactory 93.99 17 28-Apr-2020 Satisfactory Moderately Satisfactory 98.29 18 09-Dec-2020 Satisfactory Moderately Satisfactory 106.37 19 26-May-2021 Satisfactory Moderately Satisfactory 109.93 20 23-Dec-2021 Moderately Satisfactory Moderately Satisfactory 115.43 21 30-Jun-2022 Moderately Satisfactory Moderately Unsatisfactory 119.75 22 20-Dec-2022 Moderately Satisfactory Moderately Unsatisfactory 128.93 23 17-Apr-2023 Satisfactory Moderately Satisfactory 135.20 SECTORS AND THEMES Sectors Major Sector/Sector (%) Transportation 100 Public Administration - Transportation 5 Rural and Inter-Urban Roads 95 Themes Major Theme/ Theme (Level 2)/ Theme (Level 3) (%) Page 4 of 50 The World Bank PNG Road Maintenance and Rehabilitation Project II (P119471) Economic Policy 0 Trade 80 Trade Facilitation 80 Urban and Rural Development 0 Rural Development 20 Rural Infrastructure and service delivery 20 Private Sector Development 100 Jobs 100 ADM STAFF Role At Approval At ICR Regional Vice President: James W. Adams Manuela V. Ferro Country Director: Ferid Belhaj Stephen N. Ndegwa Director: John A. Roome Sudeshna Ghosh Banerjee Practice Manager: Charles M. Feinstein Benedictus Eijbergen Tawia Addo-Ashong, Satoshi Task Team Leader(s): Demetrios Papathanasiou Ogita, Fiona J Collin ICR Contributing Author: Damon C. Luciano Page 5 of 50 The World Bank PNG Road Maintenance and Rehabilitation Project II (P119471) I. PROJECT CONTEXT AND DEVELOPMENT OBJECTIVES A. CONTEXT AT APPRAISAL Context 1. In 2011 Papua New Guinea’s (PNG) economy had benefitted from strong economic growth since the mid-2000s, buoyed by high commodity prices and sound fiscal management. Despite this, PNG’s development continued to be hindered by numerous systemic challenges. Public revenue depended on resource exports, and PNG had been included in the World Bank’s Harmonized List of Fragile Situations for three of the five previous years. Key fragility drivers included inadequate infrastructure, physical isolation, deep social divisions, weak governance and public institutions, and high rates of crime and violence. Non-resource sectors were performing poorly, service delivery was stagnating, and human development outcomes remained low. Poverty in PNG was especially high in rural areas, with access to land, coastal fisheries, and artisanal production serving as safety nets for much of the population. 2. Lack of reliable road access was a driver of fragility and a critical challenge to economic development, service delivery, and raising living standards. Challenging terrain and high natural hazard risks,1historically low levels of maintenance, and limited public and private (contracting) capacity hindered efforts to develop and sustain roads. PNG had not yet developed an integrated road network connecting the provinces and regions of the mainland, and only about 35 percent of the limited national road network was in good or fair condition. National roads often did not provide all-weather service or connect to other provinces, leaving many communities reliant on costly air transport and potentially dangerous maritime transport via small and often poorly equipped vessels. 3. Establishing reliable road connectivity was a high priority of the Government of Papua New Guinea’s (GoPNG) development strategies.2 These called for maximizing impact by concentrating resources on a prioritized network of road corridors offering the greatest economic returns. Over the prior decade, GoPNG had increased road spending and, with support of the development partners,3 halted the previous trend of a decline in the overall condition of the road network. 4. Development partners had been supporting GoPNG to restore national roads and build institutional capacity in the road sector. The Road Maintenance and Rehabilitation Project (RMRP, 2003– 2012) financed rehabilitation of 600 km of roads, training to small- and medium-size contractors, and supported the establishment of a Road Asset Management System (RAMS) under an Asset Management Branch (AMB) in the then Department of Works (i.e., DoW, which has since been renamed Department of Works and Highways, or DoWH). A lesson from RMRP was that existing community-based maintenance approaches were often not efficient or effective. 5. With development partner support, GoPNG established a Road Fund and National Road Authority (NRA) in 2003 to fund and implement maintenance of roads that had been restored to good condition. In 2007, the NRA became operational and assumed responsibility for maintenance of sections of national roads in good condition, while DoWH retained responsibility for restoring the remainder of 1 Mountainous and low-lying topography, natural hazards risks such as earthquakes and landslips, and heavy rainfall make road development costly, and the geographic distribution of the population placed an integrated road network out of financial reach. 2 Papua New Guinea Vision 2050, Papua New Guinea Development Strategic Plan 2010–2030, and the Medium-Term Development Plan (2011–2015). 3 AusAID, the Asian Development Bank (ADB), Japanese International Cooperation Agency (JICA), and the World Bank. Page 6 of 50 The World Bank PNG Road Maintenance and Rehabilitation Project II (P119471) the network to good condition and development of new road infrastructure. By 2010, the NRA was financially constrained to maintaining only 443 km of the 2,200 km of roads under its responsibility, and GoPNG had identified options for new sources of road maintenance revenue. 6. Support to PNG’s road sector was a priority of the World Bank’s Country Assistance Strategy (CAS) for Papua New Guinea for the Period FY08-FY11 (Report No. 41571-PG). Pillar II of the CAS, Improving livelihoods and service delivery, especially for the rural poor, focused on “targeted interventions to support private sector development, enhance rural livelihoods, improve local service delivery, (and) expand access to infrastructure.” Through the CAS, the World Bank aimed to continue its long-standing support for the National Transport Strategy Plan. Theory of Change (Results Chain) 7. A Theory of Change derived from the Project Appraisal Document (PAD) is presented in annex 6. It identifies two results chains, presented in table 1, which correspond to the outcome indicators and targets in table 2. Table 1. Results Chains Derived from the PAD PDO Results Chain Assumptions (see also annex 6) Indicators Improving access to reliable road conditions through (A1) Road upgrading/rehabilitation 1, 2, and rehabilitation and maintenance would stimulate would cost less than US$307,000/km; 3 supply of transport services needed to enhance rural (A2) DoWH will be able to undertake a livelihoods and service delivery; improved road RAMS-based prioritization of the 10 access would reduce physical isolation, an underlying project provinces with limited technical driver of PNG’s fragility. support from the project. Capacity-building support to the NRA and (A3) GoPNG would support use of project 4 small/medium contractors would improve NRA’s resources for the NRA; (A4) New sources market engagement and bolster the supply and of NRA revenue will come online, quality of road contracting services. This, combined enabling growth in maintenance with rising maintenance funding, would contribute to spending over time; (A5) Roads improved an increase in road maintenance and in the number under the Road Maintenance and of firms actively engaged in road works. Rehabilitation Project II (RMRPII) would be included in NRA maintenance plans. Project Development Objectives (PDOs) 8. The PDO at appraisal was “to: (i) improve road transport to project areas through providing satisfactory physical condition and safety of selected roads; and (ii) strengthen institutional arrangements for road maintenance including the participation of the private sector and communities.” Key Expected Outcomes and Outcome Indicators 9. The original PDO outcome indicators are presented in table 2. Table 2. Original Project Objectives and Corresponding PDO Indicators Objective Indicator Indicator 1 Kilometers of roads rehabilitated (Baseline: 0 km; Target: 150 km) (i) 2 Kilometers of roads maintained to good and fair condition (Baseline: 35%; Target: 40%) 3 Increase in the number of road users on project roads (Baseline: 0%; Target: 25%) Page 7 of 50 The World Bank PNG Road Maintenance and Rehabilitation Project II (P119471) Increase in the number of private sector companies actively engaged in road works (ii) 4 (Baseline: 25 companies; Target: 30 companies) Components 10. The original project was made up of two components. Component 1: Rehabilitation, Upgrade, and/or Maintenance of Roads and Bridges (US$46 million; US$36 million from IDA and US$10 million counterpart financing) was to finance: (a) rehabilitation and upgrading to seal 19 km of the Hiritano Highway between Inawabui and Bereina (US$6.7 million); (b) initial routine maintenance and upgrading to seal 56 km of the Hiritano Highway from Malalaua to Kerema (US$13.6 million); and (c) rehabilitation, upgrading, and/or maintenance of national and national district roads and bridges from 10 prioritized coastal or island provinces (East and West New Britain, Central, Gulf, Oro, Morobe, Manus, Western, Madang, and Milne Bay) (US$25.7 million). These were to be selected from the National Transport Plan based on a RAMS prioritization analysis by DoWH’s AMB. A covenant required GoPNG finance 22 percent of all works costs. 11. Component 2: Technical Assistance for Project Management, Design and Supervision Services, and Capacity Building (US$7.0 million) was made up of three subcomponents: (1) Project Management (US$5 million), including consulting firm services to serve as an Employer’s Project Manager (EPM). The EPM consultants would supplement limited capacity within DoWH by executing day-to-day project coordination, management, fiduciary, and technical (including works design and supervision) functions. (2) Capacity Building and Technical Assistance for Road Sector Support (US$1 million), including: (a) consulting services and training for small- and medium-size contractors, (b) institutional strengthening of the NRA for undertaking effective road maintenance; and (c) capacity building for monitoring and evaluation, including collection, management, and use of RAMS data for DoWH; a priori and ex post and socioeconomic surveys (SESs); and environmental and social (E&S) safeguards training for DoWH. (3) Incremental Operating Costs (US$1 million) to fund DoWH’s operating costs for project implementation. B. SIGNIFICANT CHANGES DURING IMPLEMENTATION Revised PDOs and Outcome Targets 12. The 2014 Additional Financing (AF) added objective (iii), “enhance road-related economic opportunities for women.” Restructurings introduced changes to outcome targets (see annex 6) but did not lower the project ambition. Revised PDO Indicators 13. Changes to PDO indicators adopted in the 2014 AF introduced more ambitious outcomes. Revising indicators 2 and 4 shifted the focus of the project’s institutional strengthening objective from building NRA and contractor capacity to demonstrating performance-based contracting (PBC) and integrated road maintenance. The final indicators are presented in Table 3 and additional detail is presented in annex 6. Page 8 of 50 The World Bank PNG Road Maintenance and Rehabilitation Project II (P119471) Table 3. Revised Indicators and Outcome Targets Objective Indicator Final Revised Indicator (target) (i) 1 Roads rehabilitated, Rural (224 km) 2 Percentage of Hiritano Highway maintained to good condition under performance- (i), (ii) based contracting (PBC) (42%) 4 2016: Percentage of national (project) roads being maintained by private (i) contractors under PBC (39%) 5 Number of person days worked (by women) in project-related routine road maintenance activities (8,500) (iii) 6 Number of person days worked (by women) as a result of project activities on highway rehabilitation (40,000) Revised Components 14. The 2014 AF and Restructuring increased the project financing by US$157 million (US$126.5 million from IDA Credit 5404-PG and US$30.5 million in counterpart financing for works), bringing the total project costs and financing to US$210 million. The AF was to finance the following activities. • Component 1: Rehabilitate, Upgrade and/or Maintain Roads and Bridges. Financing increased from US$46.00 million to US$184.65 million (US$108.15 million in additional IDA Credit resources and US$30.50 million in additional counterpart financing). These additional resources were to fund rehabilitation, improvement, and maintenance of national and provincial roads and bridges in the ten project provinces, expanding beyond Gulf and Central Provinces which were the focus of the original project financing. Selection of roads for inclusion in the AF was to be based on economic and social criteria, including economic evaluation subject to data availability, as insufficient data was available for a comprehensive RAMS-based analysis. • Component 2: Technical Assistance: Financing increased from US$7.00 million to US$18.35 million (fully financed by IDA). The restructured Component 2 included the following additional activities: (a) demonstrating integrated road maintenance; (b) demonstrating performance-based road contracting, including involvement of women; (c) building capacity for DoWH, NRA, and small contractors for road management and maintenance; (d) building gender capacity for DoWH; (e) carrying out ex ante and ex post SESs; and (f) providing resources for a second Employer’s Project Manager (EPM2) consultancy to support project implementation of the AF after the original project closing date. • Component 3: Contingency for Disaster Risk Response (US$0) was added in 2014. Other Changes 15. There were three subsequent restructurings: (a) Restructuring in 2016 extended the closing date of IDA Credit 4931-PG by 20 months, to March 31, 2018, and amended the Financing Agreement to exempt works contracts signed after September 2015 from the counterpart financing covenant. This reduced counterpart financing for works by US$23.5 million and meant that all works under the AF would be fully financed by IDA. Page 9 of 50 The World Bank PNG Road Maintenance and Rehabilitation Project II (P119471) (b) Restructuring in 2021 extended the closing date of the AF Credit (5404-PG) by two years, to April 28, 2023, and reallocated US$5.4 million (equivalent) to Category 2 to fund two additional years of EPM services. (c) Restructuring in 2023 cancelled SDR 4.93 million of unutilized Credit financing. Rationale for Changes and Their Implication on the Original Theory of Change 16. The rationale for the 2014 AF/Restructuring was: (a) to scale-up support for road rehabilitation needs; (b) to align the project’s approach to institutional strengthening for road maintenance with GoPNG’s preference to use RMRPII financing to support rehabilitation and upgrading through DoWH; and (c) to sustain engagement in PNG, consistent with the World Bank’s practices for fragile and conflict- affected situations (FCS) at that time. The AF added a gender objective to the PDO to reflect and reinforce the ongoing involvement of women in road works under the project and align the PDO with GoPNG’s National Policy for Women and Gender Equality 2011-2015 and DoWH’s Corporate Strategic Plan; the latter which promoted development of entrepreneurial skills and partnerships with communities. 17. The AF introduced three significant changes to the derived Theory of Change: (a) the restructured project would not increase the number of firms actively engaged in road works; (b) the project would strengthen institutional arrangements for road maintenance by demonstrating integrated maintenance and contracting approaches such as PBC, by combining upgrading and long-term maintenance on the Hiritano Highway and (c) the restructured project would enhance road-related economic opportunities for women through wage employment. 18. The rationale for the restructuring in 2016 was: (a) extension of the closing date for Credit 4931- PG would allow use of funds resulting from depreciation of the Kina and (b) GoPNG could no longer provide timely funding for their share of works costs due to declining public revenue from resource exports (see paragraph 50). 19. The rationale for the restructuring in 2021 was: (a) DoWH requested a two-year extension of the project closing date to enable it to carry out long-delayed rehabilitation contracts for Bogia to Awar (25.9 km) on the Coastal Highway (Madang Province) and Epo to Kerema (9.5 km) on the Hiritano Highway (Gulf Province), neither of which had commenced; (b) due to this extension, a reallocation from incremental operating costs and works was needed to fund two additional years of EPM costs; and (c) the project was not financing input-based maintenance, and PDO indicator monitoring maintenance of project roads (indicator 4) was revised to monitor only maintenance implemented under performance-based contracting (PBC). Dissolution of the NRA by Parliament in 2020 and shifting responsibility for maintenance to the reconstituted DoWH meant that the Theory of Change would focus on institutional strengthening for maintenance exclusively through DoWH, the private sector, and communities. Page 10 of 50 The World Bank PNG Road Maintenance and Rehabilitation Project II (P119471) Figure 1. Revised Project Theory of Change Problem statement: Poor primary road conditions and inadequate institutional arrangements and funding for upgrading and maintenance limit access to economic transport. Women have inadequate opportunities to participate in and benefit from road sector activities. Activities: Outputs: Intermediary Outcomes PDO and Outcomes Component 1 Objectives Component 1 • Conduct road works prioritization study Component 1 • Improve road transport to • Prioritization study completed A1 • Rehabilitate, upgrade, and/or maintain selected • Reduced road transport travel project areas through providing • 9 works contracts tendered roads satisfactory physical condition • 224 km of roads rehabilitated and upgraded time and costs and improved • Replace selected bridges access to all-weather road and safety of selected roads. with improved safety and ancillary structures • Identify and implement road safety transport • Strengthen institutional • 9 bridges replaced improvements • Improved safety on project arrangements for road • 77 km traditional routine maintenance • Employ women in road works and/or contract roads maintenance including the • 126 km hybrid output- and performance-based maintenance directly to communities • Roads are more resilient to participation of the private sector road contract (hybrid OPBRC), including • Provide GBV/HIV/AIDs training climate events and communities. integrated maintenance • The quantity and quality of • Enhance road-related economic • 48,500 labor-days worked by women on road transport services improves in opportunities for women. Component 2 upgrading and maintenance project areas • Specialized engineering services • Employment opportunities and • EPM firm supports technical and fiduciary Component 2 training enable women to implementation • 9 works packages designed and supervised participate and benefit from A2 Long-term outcomes • RAMS data collection and support • PBC options study prepared with integrated road works • Technical assistance for PBC and integrated • Road transport supports maintenance options A3 Component 2 road maintenance livelihoods and social welfare • More than 100 km PBC contract involving • Enhanced institutional capacity • Piloting of integrated maintenance and PBC on • Road institutions, contractors, integrated road maintenance demonstrated for maintenance planning, Hiritano Highway and communities have improved • Training to DOW for road works contracting, and involvement capacity to maintain roads • Training of works contractors • Maintenance training delivered to NRA of communities • Improved physical connectivity • Training and technical assistance for DoW and • On-the-job training to ESSB staff in E&S policies • DoW adopts improved addresses fragility drivers NRA in E&S, maintenance, and contracting • 10 contractors trained maintenance contracting • The gender gaps in • Awareness raising for HIV/AIDS • 75 GBV and HIV/AIDS workshops delivered approaches involving the employment are diminished • Socioeconomic monitoring • DoW trained in use of gender data private sector and • SH/SEA mitigation measures • Technical assistance support to RAMS in DoWH communities • Eight before/after SESs Assumptions: (A1) works prioritization will identify optimized investment choices; (A2) GoPNG remains committed to implementing a mix of contracting approaches; (A3) lessons from the demonstration PBC, involvement of women in maintenance, and capacity-building support are mainstreamed in DoWH. Note: ESSB = Environmental and Social Safeguards Branch (of DoWH); GBV = Gender-based violence; SH/SEA = Sexual harassment/sexual exploitation and abuse . Page 11 of 50 The World Bank PNG Road Maintenance and Rehabilitation Project II (P119471) II. OUTCOME A. RELEVANCE OF PDOs Assessment of Relevance of PDOs and Rating 20. At closing, the PDO was highly consistent with the World Bank’s Papua New Guinea Country Partnership Framework (CPF) FY19-FY23 (Report No. 128471-PG). It directly aligned with CPF Objective 2.1 Improve Management and Maintenance of PNG’s Road Infrastructure, which included, “(i) supporting institutional arrangements for efficient contracting of road maintenance to the private sector; (ii) promoting performance-based contracting of maintenance works; and (iv) encouraging local community participation in routine maintenance of roads (including targeting women for access to paid work through participation in maintenance groups) ….” The PDO was also consistent with the CPF’s focus on supporting PNG to rehabilitate and sustain core and priority road corridors under the 2018 National Road Network Strategy (NRNS).4 Supporting DoWH’s capacity to implement upgrading and maintenance through the OPBRC modality aligned with institutional reforms ongoing at project closing in which GoPNG shifted primary responsibility for maintenance to a reconsituted Department of Works and Highways (DoWH) as an interim arrangement until a Highway Corporation is established as the primary road maintenance agency under ongoing reforms. 21. The PDO and implementation approach aligned with the CPF’s selectivity filters, fragility focus, and other CPF objectives. Implementation aligned with selectivity filters (a) focusing on areas of World Bank’s comparative advantage, (b) building complementarity with other development partners, and (c) focusing on key drivers of risk and resilience. PNG has been included in the World Bank’s Harmonized List of Fragile Situations from FY17 to RMRPII closing in FY24. Improving road connectivity to isolated areas supported the CPF’s focus on addressing drivers of fragility such as physical isolation, inequality, and low levels of access to services. The PDO also supported CPF Objectives 2.5 “Improve community access to basic infrastructure and services, particularly in vulnerable areas” and 3.3 “Deepen Economic Participation of Women and Youth.” B. ACHIEVEMENT OF PDOs (EFFICACY) Assessment of Achievement of Each Objective/Outcome 22. Achievement of the PDO is evaluated for the three project objectives using the more ambitious outcomes and targets adopted in 2014. The three objectives are (i) improve road transport to project areas;5 (ii) strengthen institutional arrangements for road maintenance, including involvement of the private sector and communities; and (iii) enhance road-related economic opportunities for women. Objective (i) “improve road transport to project areas” 23. Achievement of Objective (i) is rated High. The project fully achieved the outcome targets: (1) rehabilitating and upgrading to seal 224 km of national and provincial roads, all of which were in poor or very poor condition before the project. Upgrading to seal and replacing or repairing drainage, bridges and 4 At the time of the CPF adoption in July 2018, RMRPII was exclusively financing the Hiritano Highway and Coastal Highway both of which were priority roads of the NRNS and part of DoWH’s Five-Year Road Recovery and Maintenance Workplan 2018–2022. 5 In line with ICR Guidance, “through providing satisfactory physical condition and safety of selected roads” is not part of th e PDO. Page 12 of 50 The World Bank PNG Road Maintenance and Rehabilitation Project II (P119471) other structures provided more resilient and reliable road connectivity; (2) maintaining 126 km (42 percent) of the Hiritano Highway in good condition under PBC; and (4) maintaining 39 percent of project roads under PBC. Upgrading 111 km of the 295 km Hiritano Highway6 to sealed condition established a sealed road link from Port Moresby in Central Province to Kerema in Gulf Province, a route which had been reopened to traffic under RMRP. These upgrading works and performance-based maintenance of the 126 km from Brown River to Bereina, enhanced the climate resilience of this priority national road corridor which has been a major focus of investment in the prior decades. Upgrading 26 km of the Coastal Highway from Bogia to Awar in Madang Province extended reliable road connectivity along the Coastal Highway from Madang to Awar, serving Manam Islanders displaced by the eruption of Manam Volcano in 2004. Upgrading to seal 37.4 km of Hula Road in Central Province and 52 km of East Cape Road (ECR) from Yalua (near Alotau) to East Cape Point in Milne Bay Province extended access to the good condition road network. Road investments have significant economic impacts, as described in paragraph 399. 24. At closing, project roads were mostly in fair or better condition, with improved safety and climate resilient features. Successful installation of safety features recommended by assessments has helped mitigate risks associated with increased travel speeds. These include guardrails, pavement markings, signage, speed humps, widened shoulders, and limited lengths of footpaths. In high-risk market locations along the Hiritano Highway, markets were relocated further from the road and improved with additional safety facilities and solar powered lighting. Annex 1 further details Component 1 achievements. 25. Site visits and stakeholder consultations found strong evidence that project road works supported the change processes anticipated in the project design. Improved road conditions have lowered transport costs, reduced travel time, and stimulated improvement in the supply and quality of transport services. Buses and taxis have begun to serve some project areas, particularly Hula Road, which was previously served primarily by public motor vehicles (PMVs).7 Although GoPNG has not performed ex post traffic surveys, stakeholders in beneficiary communities reported that the frequency of PMV services increased along all project corridors. Reduced travel time benefits market traders (see paragraph 36) and allows PMV operators to make additional trips per day in many areas, improving their efficiency. Objective (ii): “strengthen institutional arrangements for road maintenance, including the participation of the private sector and local communities” 26. Achievement of Objective (ii) is rated High. RMRPII strengthened institutional arrangements for maintenance in line with the PDO's focus on the public sector, private sector and communities by (i) providing technical assistance to DoWH to demonstrate PBC contracting; (ii) sensitizing DoWH to the benefits of more effective maintenance contracting approaches involving integrated maintenance, the private sector, and communities; (iii) providing capacity-building support to DoWH (for preparation and management of road rehabilitation works) and the private sector (for bid preparation and project management for both PBC and traditional road maintenance); and (iv) strengthening DoWH’s capacity for E&S risk mitigation (see paragraph 38) and private sector’s capacity related to gender (see paragraph 37). 27. Consistent and high-quality maintenance outcomes under the demonstration hybrid OPBRC sensitized DoWH management to the benefits of PBC. Shifting responsibility for maintenance of 126 km of the Hiritano Highway to the private sector and adoption of strict service standards under the contract 6Inawabui to Bereina (22 km); Brown River to Veimauri (24 km); Malalaua to Epo (56.5 km) and Epo to Kerema (9.5 km). 7PMVs are flatbed trucks with benches and railings providing capacity of up to 40 passengers. They are PNG’s most common mode of rural transport as high ground clearance, large wheels, and durability allow them to operate on all road conditions. Page 13 of 50 The World Bank PNG Road Maintenance and Rehabilitation Project II (P119471) delivered consistent and high-quality maintenance outcomes for the pavement, drainage, roadside vegetation, and road safety features (such as deflectors, guardrails, pavement markings and signage) which exceeded maintenance norms in PNG. Moreover, combining rehabilitation, resealing, initial repairs (that is, clearing the maintenance backlog), and routine maintenance in a single contract demonstrated the potential to engage larger and more capable contractors in road maintenance and the potential efficiency of implementing integrated maintenance contracting under a single contract rather than undertaking multiple procurements. Based on this successful experience, DoWH has indicated the intention to utilize PBC in the future. 28. Technical assistance for preparation and implementation of the hybrid OPBRC strengthened DoWH’s capacity to implement performance-based road maintenance contracts. An Options Analysis paper assessed market capacity and factors for introducing performance risk sharing, set criteria for selecting candidate roads for PBC, and identified appropriate service levels which were adopted into the demonstration OPBRC bidding documents and specifications. DoWH was provided with sample hybrid OPBRC contract and bidding documents, realistic costs of sustainable maintenance of sealed roads for asset management/planning purposes, and road condition data for the Hiritano Highway for DoWH’s RAMS. Central Province Provincial Works Department staff developed a strong understanding of the PBC approach. Preparation of a PBC Policy Statement and organogram for a PBC Monitoring and Management Unit (MMU) provided DoWH with organizational requirements to scale up PBC. 29. Participation in the hybrid OPBRC and capacity building to DoWH and small/medium contractors strengthened public and private sector capacity to implement road maintenance. Compensating the contractor for meeting service levels and requiring the contractor to audit its performance forced it to assume responsibility for planning, implementation, and oversight of routine maintenance. The OPBRC contractor learned to adapt to the hybrid OPBRC contract over the first year with support from the EPM and its PBC specialist, and improved its response times by establishing smaller material storage sites and works teams that were better adapted to routine maintenance. The contractor also began to demonstrate improved capacity for planning integrated maintenance by contributing to finalization of the resealing program. RMRPII also (i) delivered trainings to eight small- and medium-size contractors related to preparation of bids and works implementation, as part of the original objective of strengthening maintenance capacity and (ii) enhanced DoWH capacity to implement road rehabilitation and upgrading works through an extensive seven-day, offsite training program for DoWH engineers focusing on FIDIC (Federation Internationale des Ingenieurs-Conseil) Red Book contracts. 30. RMRPII strengthened institutional arrangements for maintenance by demonstrating strategies for engaging communities in paid labor under the demonstration hybrid OPBRC. Engaging the community through wage employment and subcontracting for vegetation management under the OPBRC contract demonstrated an effective approach to community involvement in maintenance of primary roads, which can be adopted by DoWH. These approaches reduced logistical and operational challenges compared to directly contracting communities in roadside maintenance. Objective (iii): “Enhance road-related economic opportunities for women” 31. Achievement of Objective (iii) is rated High. RMRPII enhanced economic opportunities for women throughout implementation by including contractual clauses encouraging and/or requiring employment of women in rehabilitation and maintenance works. Employment of women was scaled-up significantly through the Hiritano hybrid OPBRC and the contracts for upgrading to seal Bogia-to-Awar and Page 14 of 50 The World Bank PNG Road Maintenance and Rehabilitation Project II (P119471) Epo-to-Kerema. Both outcome targets were achieved: person-days worked by women in maintenance (98 percent achieved) and person-days worked by women on rehabilitation and upgrading works (approximately 95 percent achieved). These opportunities enabled women to establish a history of formal employment. Employment of women under RMRPII was accompanied by SH/SEA mitigation measures in alignment with international experience. Justification of Overall Efficacy Rating 32. Efficacy is rated High. C. EFFICIENCY Assessment of Efficiency and Rating 33. Ex post economic evaluation of project roads was undertaken using the Roads Economic Decision (RED) model Version 4. Due to data limitations, only six of the project road rehabilitation works contracts could be evaluated, totaling 115 km of the 224 km of rehabilitation works completed. The analysis methods and findings are described in depth in annex 5. The analysis accounts for road agency and road user costs (including the value of time) based on a predicted mean International Roughness Index (IRI) value over the 20-year analysis period. A 6 percent discount rate was used. As maintenance funding in PNG has historically been constrained, both with- and without-project scenarios cautiously assume minimum maintenance. The estimated net present value (NPV) for the 115 km of works is US$148.9 million; economic internal rates of return (EIRRs) ranged from 15.9 percent to 49.8 percent for individual rehabilitation and upgrading contracts. These estimates meet or exceed expectations for the sector, although costlier rehabilitation works along Malalaua to Epo could not be analyzed due to lack of data. 34. While several factors contributed to efficient use of resources, there were also significant shortcomings. Screening the proposed project roads for economic benefits and social and economic criteria resulted in selection of high-impact roads and ensured efficient use of project resources. At the same time, DoWH lacked data required for comprehensive RAMS analysis, and the screening was limited to a long list of 11 candidate roads identified by DoWH, meaning that the prioritization was not comprehensive across the project provinces. Performance-based and integrated maintenance of the Hiritano Highway has contributed to lifecycle efficiency. Use of an EPM significantly improved efficiency of project implementation. Despite this, protracted project management challenges delayed commencement of the Bogia-to-Awar and Epo-to-Kerema road upgrading works by three years, resulting in a two-year extension of the AF Credit (from seven years to nine years) and two additional years of EPM2 services (see paragraph 46). Protracted procurement processing and delays implementing resettlement compensation requirements added to inefficiency. Efficiency is rated Modest as overall use of resources is less than expected for the sector. D. JUSTIFICATION OF OVERALL OUTCOME RATING 35. The overall outcome rating is Moderately Satisfactory. E. OTHER OUTCOMES AND IMPACTS (IF ANY) Gender 36. Consultations found that time savings on project roads have directly benefited women. Women are more likely than men to travel to market to sell garden food and certain cash crops. Due to improved Page 15 of 50 The World Bank PNG Road Maintenance and Rehabilitation Project II (P119471) road conditions, women were more likely to leave for market later in the morning (for example, at 5:00 or 6:00 a.m. instead of 4:00 a.m.), more likely to finish selling and return home on the same day, and more likely to return before nightfall. Relocation of roadside markets along the Hiritano Highway and installation of improved safety features and lighting has benefited women engaged in marketing. 37. Involving women in road rehabilitation and maintenance under RMRPII at times led to unintended challenges related to gendered expectations about childcare, work, and household responsibilities as well as increased risk of harassment. Strategies adopted to address these risks included Sexual Harassment/Sexual Exploitation and Abuse (SH/SEA) prevention and response procedures and establishment of childcare arrangements among women employed on the PBC contract. Implementation of the project’s SH/SEA prevention and response mechanisms was highly successful at building trust among participants, raising awareness in beneficiary communities beyond the workforce, and building contractors’ capacity. Institutional Strengthening 38. Dialogue and consensus building between DoWH and the WB were critical to addressing safeguard non-compliances, responding to emerging E&S risks/requirements (i.e., SH/SEA), and institutional strengthening (see paragraphs 48, 59 and 60). Intensive implementation support for safeguards raised further awareness in DoWH management that environmental and social (E&S) risk mitigation is integral to road works and the Department’s mandate to rehabilitate and maintain an adequate and safe prioritized national road network. Since RMRPII’s inception, DoWH’s Environmental and Social Safeguards Branch (ESSB) has scaled up from two E&S staff to more than a dozen E&S positions and initiated provincial E&S staffing and facilitated major improvement in E&S management when missions were suspended due to the Pandemic. Poverty Reduction and Shared Prosperity 39. Consultations confirmed that improved road transport has supported rural livelihoods in agriculture, roadside markets, and tourism and improved access to health and education services. Improved market access supports production of coconut (for export), betel nut, and produce (which is sold in nearby urban areas). The clinic in Potsdam (near Bogia) reported that road upgrading enabled the community to access the region’s only ambulance for the first time, whereas emergency patients were previously transported by boat to Bogia to access ambulance services. Stakeholders reported that reliable road access helps schools retain qualified teachers and clinics access medical resources. Community leaders in Hula, a coastal fishing and beach community, reported that reliable road access has facilitated a new market in day tourism and overnight camping trips from Port Moresby, with positive spillovers for fishing and sales at markets. Villages inland from Hula Road benefit from increased access to the market at Hula, which has become a small business hub for gardeners and fisherfolk. Improvement of ECR has enhanced connectivity to a major commercial hub in Alotau for residents of the southern D’Entrecasteaux Islands transiting via East Cape Wharf. Other Unintended Outcomes and Impacts 40. A project contractor’s negligence resulted in loss of a weight-limited temporary bridge at Wiole, Milne Bay Province. The bridge was located one km outside the project section of ECR. While the contractor acknowledged responsibility, DoWH reported the bridge was heavily corroded and agreed to share the cost of replacement. Page 16 of 50 The World Bank PNG Road Maintenance and Rehabilitation Project II (P119471) III. KEY FACTORS THAT AFFECTED IMPLEMENTATION AND OUTCOME A. KEY FACTORS DURING PREPARATION 41. Close modelling of RMRPII implementation arrangements on RMRP responded to technical capacity risks in the FCS environment but resulted in significant under-resourcing of E&S support. Based on the lessons from RMRP, technical and fiduciary functions were delegated to consulting firm acting as an ‘EPM’ embedded within DoWH, while E&S aspects of implementation remained within DoWH’s Environmental and Social Safeguards Branch (ESSB). While the EPM was a key factor contributing to the efficiency of implementation and quality of outcomes, limited staffing, and capacity in the ESSB contributed to serious implementation challenges (see paragraphs 48, 59, and 60). 42. An optimistic M&E design and the decision to defer certain aspects of preparation to implementation contributed to the need for restructuring. The outcome targets of rehabilitating 150 km of roads and increasing the number of firms actively engaged in road works to 30 did not adequately account for risks such as the expected cost escalation due to development of liquified natural gas (LNG) in PNG and uncertainty of GoPNG commitment to ramping up maintenance financing for the NRA through additional sources of revenue (see the derived Theory of Change in Annex 6). Moreover, the decision to defer both procurement of the EPM and preparation of the first two works designs until implementation resulted in a slow ramp up to project implementation (see figure 2). Figure 2. Project Implementation Timeline Processing step: oard Approval 201 Addi onal 201 estructuring 2021 estructuring Financing (reduc on of counterpart nancing) Tota l na nci ng: S 53.0 mi l l i on S 213.0 mi l l i on S 1 .5 mi l l i on S 1 .5 mi l l i on DoWH Project Director (PD) resigns the PD posi on is vacant for seven months Safeguards CESMP WB ends EPM2 has di culty mobilizing sta to PNG, partly compliance delays intensive due to CO ID and visa issues, un l late 2022 201 Restructuring Completed AF2 Prepara on Commences challenges start of safeguards emerge hybrid monitoring Parliament otes to Abolish NRA (Sept. 2020) Contracts signed a er September of 2015 fully nanced by IDA Prepara on OPBRC of Second works 2021 Restructuring BER for B A and E are Declining mineral revenues, rising scal pressure on GoPNG delayed 1 months AF2 stops Board approval of 201 Addi onal Financing (AF1) Project closes Rapid escala on of construc on costs E ec veness 2011 2012 2013 201 2015 201 201 201 201 2020 2021 2022 2023 Board approval Inawabui to Bereina (22 km) Processing Malalua to erema ( 5 km) Milestones Malalua to Epo (5 .5 km) Procurement pgrade to seal of Hula Road (3 . km) Maintenance pgrade to seal of East Cape Road (52 km) Rehabilita on Hiritano Highway hybrid OPBRC Rehabilita on and maintenance Hiritano Highway hybrid OPBRC aria on Order pgrade to Seal of Coastal Highway (Madang Province) Bogia to Awar (B A) in Madang (25. km) EPM/2 Contract extensions pgrade to Seal of Hiritano Highway Epo to erema (E ) in Gulf Province ( .5 km) Appointment of new DoWH First EPM EIPM Project Director EPM2 Change in TTL B. KEY FACTORS DURING IMPLEMENTATION (b) Factors Subject to the Control of Government and/or Implementing Entities 43. GoPNG preference to use RMRPII resources to support DoWH’s mandate was a key factor in the decision to shift the focus of the institutional strengthening objectives demonstrating PBC and Page 17 of 50 The World Bank PNG Road Maintenance and Rehabilitation Project II (P119471) integrated maintenance. Although World Bank missions coordinated with the NRA and identified areas for support, the NRA was not an implementing agency and GoPNG did not support its requests to use project financing for its capacity-building needs. GoPNG’s long list of proposed projects for financing under RMRPII focused on upgrading roads to a sealed standard and resulted in higher per kilometer costs under the Additional Financing and reduced opportunities for engaging small/medium contractors in rehabilitation. In response, the Bank proposed shifting the focus of institutional strengthening to demonstrating (a) integrated road maintenance and (b) contracting approaches that combine rehabilitation and maintenance, such as PBC. This aligned the project with the priorities of GoPNG and DoWH – which specifically requested doubling of the size of the initial PBC contract – and with reforms initiated six years later through the Road (Fund and) Management Act, 2020, which dissolved the NRA. 44. Limited RAMS data and capacity in DoWH and delay procuring the EPM led to a shift in the project’s approach to prioritization of road works. Although the EPM contract included capacity-building support to the AMB for systemic RAMS data collection and prioritization, commencement of AF preparation shortly after the EPM mobilized in January of 2013 left little time to build up the required data and capacity (see the derived Theory of Change in annex 6). This led to adoption of a criteria-based prioritization under the Additional Financing (see paragraph 14), which was undertaken by consultants. 45. Insufficient E&S safeguards resourcing for the project resulted in the emergence of several significant safeguards non-compliances in mid-2016 (see paragraphs 59 and 60). Given the lack of E&S capacity within DoWH’s ESSB, additional E&S resources were engaged by DOWH through the EPM, and the Bank initiated intensive E&S missions as an alternative to suspending disbursements (see paragraphs 48, 59). 46. Project management challenges, emerging in late 2016, delayed numerous project activities and eventually resulted in the need for a two-year extension of the project closing date, to April 28, 2023. Challenges began with a seven-month vacancy in the Project Director position in DoWH (from October 2016 to May 2017), followed by the 2017 elections and caretaker government period. In 2017, in response to concerns about the frequency of E&S support missions, DoWH requested all communication between it and the World Bank be facilitated by a single focal point within each institution. Agreements reached between the World Bank and project management were at times not implemented in full or in a timely manner due to this communication barrier and, at times, challenges within the EPM2 leadership. Although the hybrid OPBRC contract was awarded in May 2017, project management challenges contributed to excessive delays to other key activities. Procurement of EPM28 took four years to complete, and an Employer’s Interim Project Manager (EIPM) needed to be recruited to support implementation from 2018 until the EPM2 could mobilize in the third quarter of 2019. Although rehabilitation of the Bogia-to-Awar and Epo-to-Kerema road sections was scheduled to be completed by mid-2019 and mid-2020, respectively, procurement of these contracts did not commence until late 2019 and preparation of compliant bid evaluation reports alone took 18 months to complete. Lifting of the above communication barriers in late 2022 coincided with full staffing of the EPM2 (see paragraph 46) and enabled completion of the remaining works in April of 2023, but the protracted delays left insufficient time to complete ex post SESs and financial literacy training for women employed in road maintenance. 8EPM2 was to support project implementation from the original project closing date of June 30, 2016, until closing of the AF Credit in June 2021. Page 18 of 50 The World Bank PNG Road Maintenance and Rehabilitation Project II (P119471) 47. PNG’s statutory procurement procedures contributed to extensive processing delays and some contract implementation challenges. Procurement of the EPM required 18 months, while procurement of the Bogia-to-Awar and Epo-to-Kerema works took 24 months. Statutory authorization and approval for Variation Order 9 (VO9), to extend the hybrid OPBRC contract by 17 months to the revised project closing date of April 28, 2023, were obtained only two months before the project closing date (variation signed before the project closing date). The contractor carried out pavement maintenance throughout the extension period under proforma contracts financed by DoWH but halted vegetation management in late 2022 due to payment delays (e.g., the low value of rolling proforma contracts). Moreover, rehabilitation, resealing, and repairs under VO9, valued at US$5.3 million could not be completed, resulting in cancelation of undisbursed IDA financing. (c) Factors Subject to World Bank Control 48. Relocation of World Bank E&S specialists to the Pacific region beginning in 2015 strengthened implementation support to RMRPII and significantly enhanced institutional strengthening outcomes. Decentralizing E&S staffing to the Pacific led to identification of E&S risks RMRPII in 2015 and prioritization of staff resources to the project, enabling the World Bank to field 17 missions to support E&S monitoring from late 2016 until DoWH strengthened its internal monitoring capacity in late 2018. This intensive support was critical to resolving safeguards non-compliances and sensitizing DoWH to the need to improve its E&S risk management capacity, eventually contributing to improved safeguards performance on the remaining road works under RMRPII. 49. Mobilization of PBC expertise strengthened implementation support and contributed to the successful hybrid OPBRC demonstration. The hybrid OPBRC road contract was designed to accommodate risks related to lack of data on the existing pavement strength and uncertainty about contractors’ technical capacity to plan integrated maintenance. Compensating rehabilitation, initial repairs, and periodic maintenance on a lump-sum and output basis shifted to the private sector those risks that contractors could best manage within the context of PNG. (d) Factors Outside the Control of Government and/or Implementing Entities 50. Rapid increases in works costs and declining public revenues from natural resource exports made it difficult for GoPNG to continue financing works costs under the Additional Financing. Rising demand for construction services due to development of LNG in PNG contributed to a rapid rise in construction costs from 2011-2013. The initial two rehabilitation contracts, upgrading to seal of the Hiritano Highway from Inawabui to Bereina (22 km) and Malalaua to Kerema (65 km), exceeded the project resources. An additional PGK 19 million (US$ 7.6 million) in counterpart financing was required even after scaling down the latter to 56.5 km (i.e., Malalaua to Epo). Due to the combination of these additional costs and declining public revenues, GoPNG had difficulty funding 22 percent of the cost of initial works contracts under the AF. Removal of the counterpart financing covenant via the 2016 Restructuring (see paragraph 15) resulted in a net reduction in counterpart financing of US$15.9 million. 51. Challenges associated with the FCS environment, including low contractor capacity, remote locations of works sites, and insecurity were key factors affecting implementation of works. Contractor capacity constraints contributed to slow contractor mobilization on several contracts and difficulties preparing adequate Contractor’s Environmental and Social Management Plans (CESMPs) delayed implementation of all works contracts under the AF. Difficulty bringing crushers and spare parts into isolated areas of PNG and weight limits imposed on the Angabanga Bridge after severe flooding in 2013 Page 19 of 50 The World Bank PNG Road Maintenance and Rehabilitation Project II (P119471) caused logistical challenges, particularly for Malalaua to Epo (2014–2016) and Epo to Kerema (2022–2023) upgrading works. A violent robbery at the ECR contractor’s camp in October 2017 was a significant setback to ECR works. 52. Emergence of COVID-19 affected mobilization of international expertise and delayed progress of several project activities. The EPM2 contract did not allow for remote work, and emergence of the pandemic while EPM2 staff were awaiting visas to work in PNG delayed mobilization of the social, environment, procurement, and gender specialists. This delayed progress resolving safeguards issues, procuring the final two works contracts, and implementing the SH/SEA Action Plan. Due to cumulative delays, the EPM2 was unable to complete additional training to DoWH and financial literacy training for women employed under the Hiritano PBC. IV. BANK PERFORMANCE, COMPLIANCE ISSUES, AND RISK TO DEVELOPMENT OUTCOME A. QUALITY OF MONITORING AND EVALUATION (M&E) M&E Design 53. The initial M&E design aligned with the FCS environment and sector context but did not encompass all the project outcomes and included some indicators that lacked clear attribution. It supported the project’s institutional strengthening objectives by encouraging DoWH to collect data on road conditions and traffic. Key weaknesses were that there was no project-level baseline for the percentage of roads in good or fair condition in the project area; there was no indicator to monitor the community participation element of the institutional strengthening objective; and the targeted increase in the number of firms actively engaged in road works (PDO indicator 4) rested on an assumption that GoPNG would increase sources of maintenance funding, leading to higher spending, and was not attributable to the project (see the derived TOC in annex 6). Revisions made in the 2014 AF and subsequent restructurings strengthened the M&E design significantly, but at closing final M&E design still did not include indicators to fully monitor the project outcomes. This included (a) lack of an indicator to monitor the community participation element of the PDO and (b) missing intermediate indicators for SESs, technical assistance related to the PBC, capacity building for DoWH in gender and RAMS,9 and financial literacy training for women working in routine maintenance. Core/corporate indicators for transport, the Rural Access Index, and ‘population with enhanced access to transport services’ could have been adopted and monitored based on the best available population estimates. M&E Implementation 54. M&E implementation effectively monitored achievement of outcomes in the Results Framework. Monitoring road conditions and road traffic through the initial PDO indicators 2 and 3 proved impractical due to limited DoWH capacity (the latter particularly due to difficulties it faced counting pedestrians). These indicators, which were to be collected at the sector and project levels, were also not reported in initial project Implementation Status and Results Reports (ISRs). M&E Utilization 55. M&E utilization ensured that effort and resources were utilized for the project objectives. Annual reports from the EPM and EPM2 provided monitoring of project outcomes. Aide Memoires 9 Capacity-building support for RAMS was intended to help DoWH collect data necessary to prepare the PBC contract. Page 20 of 50 The World Bank PNG Road Maintenance and Rehabilitation Project II (P119471) monitored factors affecting potential achievement of outputs not included in the M&E design, including capacity building to DoWH in gender, SESs, and financial literacy training for women involved in routine maintenance. The decision to not collect data on pedestrian activity or prepare interim SESs reduced the potential for M&E utilization. Justification of Overall Rating of Quality of M&E 56. Overall Quality of M&E is rated Modest. B. ENVIRONMENTAL, SOCIAL, AND FIDUCIARY COMPLIANCE Procurement 57. Procurement was rated Satisfactory for most of the first six years of implementation but was later downgraded to Moderately Satisfactory for almost four years due to delays in procurement of the EPM2, Bogia-to-Awar, and Epo-to-Kerema road upgrading contracts. Project management challenges, low thresholds for procurement clearances in PNG, and unpredictable clearance timelines (see paragraphs 456 and 477) resulted in inefficiency in procurement.10 Implementation conformed with World Bank policies and procedures with two exceptions: (a) DoWH issued an extension to the closing date of the ECR rehabilitation contract without requesting prior ‘no objection’ and (b) two bid securities were retained by the National Procurement Commission (NPC) as a result of an amendment to the specific procurement notice after the World Bank provided ‘no objection’, which erroneously stated the bid securities would not be refunded. The World Bank is continuing to follow up on the refund of the bid security. To avoid further extension of RMRPII closing date, ‘no objection’ to award the final two works contracts was conditioned upon measures to ensure a further closing date extension would not be required. Procurement was rated Moderately Unsatisfactory for the final two years of implementation in part due to extensive delays to extension of the hybrid OPBRC contract (see paragraph 47). Financial Management 58. The project relied on DoWH FM systems with technical assistance provided by the EPM’s Financial Controller. FM performance was rated Satisfactory during the first seven years of project implementation and later downgraded to Moderately Satisfactory until project closing. Annual audited financial statements were consistently submitted on time and reviewed and accepted by the World Bank. The final set of financial statements covering the period to project closing was also finalized and submitted ahead of the June 30, 2024, due date. All audit opinions were unmodified except for 2021, which was qualified because PGK 2 million counterpart funding was used for non-project activities. Quarterly interim unaudited financial statements were consistently submitted on time during most of the project’s life, and they were reviewed and accepted. Matters arising from FM implementation support and supervision visits were consistently addressed and resolved within a reasonable time. Disbursements were generally consistent with the revised projected estimates with large payments made by the direct payment method. 10Before 2021, PNG law required the NPC or its predecessor, the Central Supply and Tenders Board, to handle all procurement processes for contracts with an estimated value above PKG 0.5 million (including subsequent amendments regardless of value). These were subject to endorsement by NPC, approval by the National Executive Council, and clearance by the State Solicitor and were to be signed by the Governor General. The NPC was required to approve all procurements valued between PKG 500,000 and PKG 10.0 million (contracts signed by the Chair of the NPC) and lower-value contracts could be procured with authorization by the Secretary, DoWH. After 2021, the lower threshold was revised to PGK 1.0 million. Page 21 of 50 The World Bank PNG Road Maintenance and Rehabilitation Project II (P119471) Advances to the Designated Account were utilized and accounted for on time, with the final unacquitted balances canceled and refunded to the World Bank before the end of the grace period. Social Safeguards 59. Both the original Credit and AF triggered OP 4.12 - Involuntary Resettlement and OP 4.10 - Indigenous Peoples. An Indigenous Peoples’ Policy Framework and a Land Acquisition and Resettlement Framework were prepared in 2011 and revised in 2013 for the AF. Community consultations were completed for all road works contracts as required by OP 4.10. RMRPII experienced significant environmental and social non-compliance challenges during implementation due to inadequate E&S staffing and support within DoWH and the EPM, whose contract excluded E&S specialists. Resettlement of a household before preparation of a Resettlement Action Plan (RAP) on Malalaua to Epo rehabilitation works in 2015 was addressed through ex post review and documentation. Additional significant E&S compliance issues arose as works commenced on Hula Road and ECR in 2016, including site clearing on Hula Road prior to inventorying roadside assets and payment of compensation as well as environmental compliance gaps (see paragraph 60). On December 2, 2016, the Bank sent a letter to GoPNG stating the urgency of complying with Safeguards requirements of the Financing Agreement, including: (i) implementing the LARF on Hula and ECR works sites; (ii) mobilizing adequate E&S oversight capacity in DoWH; and (iii) addressing Environment risks on both sites (see below). The letter also stated that the Bank would initiate monthly or bimonthly E&S missions as an interim measure to provide DoWH time to increase E&S oversight, this continued until DoWH mobilized sufficient Safeguards monitoring capacity in late 2018 via an interim monitoring plan. As it was not possible to complete ex-post inventories of individual assets on Hula Road, a community compensation approach was adopted and implemented involving additional road improvements. Support to DoWH and contractors led to gradually resolution of the remaining challenges, sensitization of DoWH management, and sustained improvement in DOW E&S monitoring capacity, but the slow pace of progress contributed to the decision to not proceed with a proposed Second AF to RMRPII. DoWH continued to increase its E&S staffing and support until project closing, demonstrating significantly improved ability to meet policy requirements in a timely manner on the Bogia to Awar and Epo to Kerema works contracts; issues that arose when missions were suspended due to COVID-19 were addressed much more rapidly. RMRPII closed with a Post Closure Action Plan. DoWH conducted site visits in June and October 2023 and submitted their final social monitoring report for World Bank review in December 2023. The monitoring report included documentary evidence to confirm completion of outstanding actions. All activities under the plan have been completed and the Post closure note has been cleared by the Regional Safeguards Advisor. Environmental Safeguards 60. Both the original Credit and AF were screened as Environmental Risk Category B. Works were to be carried out within rights-of-way of existing roads. An Environmental and Social Management Framework (ESMF) was prepared for the original project and updated for the AF, and Environmental and Social Impact Assessments (ESIAs) were prepared for subprojects. Preparation of acceptable CESMPs was delayed for Hula, ECR, demonstration hybrid OPBRC, and Bogia-Awar due to limited contractor capacity. Environmental risks and compliance gaps on Hula and ECR included inadequate storage of fuel and bitumen, worker safety risks, poor quarry management practices, and failure to obtain permits. Among the most serious concerns was that quarrying gravel from stream beds along ECR resulted in isolated and temporary impacts on community water supplies; this was addressed by providing alternative water supplies and improving sediment management practices prior to completion of the ECR works in early Page 22 of 50 The World Bank PNG Road Maintenance and Rehabilitation Project II (P119471) 2019. All environmental post closure plan actions have been completed. DoWH completed site inspections in October 2023 and submitted their final environmental monitoring report for World Bank review in November 2023. The monitoring report, supplemented by additional video of Postan Quarry, confirmed completion of outstanding actions. C. BANK PERFORMANCE Quality at Entry 61. The initial project design largely aligned with the sector and country context but suffered from some gaps. Rehabilitation and maintenance of national and national district roads in accordance with the National Transport Strategy Plan, collection road sector data, and strengthening institutional and contracting arrangements for maintenance were key sector priorities. The design aligned with the GoPNG’s strategies and institutional arrangements, was well coordinated with development partners, responded to fragility drivers such as physical isolation and poor service delivery, and provided flexibility to respond to emerging priorities by deferring selection of roads and leaving scope to adjust capacity- building activities. At the same time, preparation was undertaken through Track I with only six months from concept review to Board decision, deferring procurement of the EPM to implementation reduced readiness, and adoption of optimistic outcome targets for road works and institutional strengthening resulted in the need for course corrections and restructuring. Preparation recognized but did not adequate mitigate E&S capacity risks. Quality of Supervision 62. World Bank teams provided sound technical support and cooperation to GoPNG and DoWH throughout implementation. This included consistent coordination with the NRA and development partners and concerted effort to maximize use of the project financing, including for replacement of the Wiole Bridge (see paragraph 40). The 2014 AF/Restructuring was a thoughtful response to the political economy challenges in the FCS environment, was well-received by GoPNG and DoWH, and enhanced the project impact substantially. Supervision was conducted by four task team leaders (TTLs) and 35 missions over 12 years of implementation; support ramped up in key periods from 2016 to 2018 and 2022 to 2023, including intensive virtual support to ensure completion of the final works contracts. The task team composition and proximity in the country and/or region were generally responsive to the FCS context and project objectives, except that turnover in gender specialist support every 1.8 years during the nine-year AF period was high for a project with a gender objective. Midterm review undertaken in 2017 recorded key lessons related to E&S management which the World Bank carried forward in supervision. The lack of data for ex ante and ex post economic evaluation indicates the overall difficulty of M&E in the FCS context, which were areas to improve. Justification of Overall Rating of Bank Performance 63. The World Bank performance is rated Moderately Satisfactory. D. RISK TO DEVELOPMENT OUTCOME 64. The key risks to sustainability are uncertainty about the future road maintenance funding and ongoing road sector reforms of the GoPNG and climate events. At project closing, the upgraded project roads were in mostly fair or good condition; the Malalaua to Epo (56.5 km) and PBC (126 km) sections of the Hiritano Highway had benefited from receiving the most maintenance, while Hula and ECR roads Page 23 of 50 The World Bank PNG Road Maintenance and Rehabilitation Project II (P119471) (completed in 2019) showed signs of damage from deferred maintenance. DoWH has stated its intention to expand use of OPBRC contracting through both its own resources and financing from development partners. Since RMRPII closing, DoWH has continued implementation of maintenance under the Hiritano hybrid OPBRC with its own financing but has not implemented RMRPII technical assistance recommendations for establishing a PBC MMU. The ongoing sector and institutional reforms, including implementation of the Road (Management and) Fund Act 2020, are still at early stages and have not yet established adequate funding and implementation arrangements for road maintenance. GoPNG commitment to build missing road links under the ConnectPNG program could provide opportunities to expand use of PBC. A flood and washout of a section of the Hiritano Highway highlights climate risks to sustainability can only be partially mitigated through resilient design and maintenance. V. LESSONS AND RECOMMENDATIONS 65. To advance readiness of transport projects and manage absorptive capacity risks in PNG and other FCS, all available tools should be utilized at preparation stage. In the case of RMRPII, deferring preparation of civil works designs and EPM bidding documents until implementation resulted in a gap in EPM support for implementation and a two-year delay to disbursements. Bunching of activities at RMRPII closing also contributed to difficulty preparing the next transport operation. Preparation of transport projects in FCS should account for the impact of capacity risks by providing additional preparation supports and longer lead times for engineering studies, works designs, and procurement of contractors and supervision consultants. This may include (i) leveraging financing from ongoing operations to recruit individual consultants to initiate procurement of the next operation’s EPM prior to Board submission; (ii) including resources in the EPM for preparation of civil works designs and bid documents for future projects; and (iii) include flexible terms in future EPM contracts to enable extension of the scope and duration of EPM support to other transport operations on an emergency basis, to reduce the risk of a gap in EPM support between projects and EPMs. 66. With appropriate support, performance-based contracting can deliver high quality maintenance outcomes and improved climate resilience in FCS environments. Extensive and highly capable support to preparation and implementation, de-risking, and relatively strong contractor capacity were key factors in the success of the hybrid OPBRC demonstration. Strong international expertise enabled the project to design a risk sharing approach, service standards, and contract scale that were appropriate given limited contractor capacity and information. Selection of a sealed road section that was in relatively uniform condition and extensive bid conference / bidder training significantly reduced contractor capacity risks. The contractor’s capacity was a key success factor as adapting to the hybrid OPBRC contract required new ways of planning and prioritizing its work and acceptance of different kinds of risks. Although initially uncomfortable with the performance-based maintenance payment approach, it successfully adapted to the hybrid OPBRC during the first year of the contract and continued to perform well during the remaining period. 67. Data collection and RAMS capacity-building support should be a priority for future PBC contracts and road projects in PNG. Lack of data contributes to inefficient use of resources and was a constraint to prioritization of roads in the original project design and to preparation of the PBC after the AF. Although collection of pavement roughness was a service standard under the hybrid OPBRC, the project M&E design did not ensure that DoWH was taking full advantage of this in its RAMS. Future projects can adopt measures to ensure that PBC contracts are leveraged to support data collection for DoWH and ensure results indicators are in place for monitoring this. Page 24 of 50 The World Bank PNG Road Maintenance and Rehabilitation Project II (P119471) 68. Addressing underlying drivers of E&S risk is critical to implementing road projects in PNG. Building on lessons from RMRPII, E&S risks can be more effectively addressed in future road projects by (i) engaging DOWH management to build consensus on E&S requirements and improved approaches for implementation at preparation stage; (ii) ensuring adequate E&S resources and capacity at project design; and (iii) integrating E&S risk management in overall project management and procurement/contract management. 69. Efforts to promote employment of women in road works should include stronger mechanisms to ensure that lessons are learned and carried forward systematically. Although employment of women in road rehabilitation and maintenance under RMRPII resulted in a wide range of challenging situations, there is a limited record of lessons from these experiences that can inform future projects. 1) . Page 25 of 50 The World Bank PNG Road Maintenance and Rehabilitation Project II (P119471) ANNEX 1. RESULTS FRAMEWORK AND KEY OUTPUTS A. RESULTS INDICATORS A.1 PDO Indicators Objective/Outcome: Improve road transport to project areas Formally Revised Actual Achieved at Indicator Name Unit of Measure Baseline Original Target Target Completion Roads rehabilitated, Rural Kilometers 0.00 150.00 224.00 224.00 30-Aug-2011 30-Jun-2016 15-Apr-2021 10-Mar-2023 Comments (achievements against targets): The target of 150 was increased to 220 km in the 2014 Additional Financing then increased again to 224 in the 2021 Restructuring. The outcome target was fully achieved by project closing. Formally Revised Actual Achieved at Indicator Name Unit of Measure Baseline Original Target Target Completion Percentage of Hiritano Percentage 30.00 50.00 42.00 42.00 Highway maintained to good condition under PBC 01-Jul-2011 09-Jan-2014 15-Apr-2021 10-Mar-2023 Page 26 of 50 The World Bank PNG Road Maintenance and Rehabilitation Project II (P119471) Comments (achievements against targets): The outcome target was fully achieved. 124 km of the Hiritano Highway was maintained in good condition under PBC (out of 295 km). Objective/Outcome: Strengthen institutional arrangements for road maintenance, ... private sector and communities Formally Revised Actual Achieved at Indicator Name Unit of Measure Baseline Original Target Target Completion Percentage of project roads Percentage 20.00 25.00 39.00 39.00 being maintained by private contractors under PBC. 01-Jul-2011 09-Jan-2014 15-Apr-2021 10-Mar-2023 Comments (achievements against targets): The indicator was fully achieved. 39 percent of the project roads were being maintained by private contractors under PBC at project closing. This was achieved through implementation of the Hiritano Highway hybrid OPBRC contract. Objective/Outcome: Enhance road-related economic opportunities for women Formally Revised Actual Achieved at Indicator Name Unit of Measure Baseline Original Target Target Completion Number of persons days Number 2,100.00 6,000.00 40,000.00 37,824.00 worked (by women) as a result of project activities on 20-Nov-2015 02-May-2016 15-Apr-2021 10-Mar-2023 highways rehabilitation. Comments (achievements against targets): Page 27 of 50 The World Bank PNG Road Maintenance and Rehabilitation Project II (P119471) The target is fully achieved (95 percent achieved). Women worked 37,842 days on road rehabilitation works financed by RMRPII. Formally Revised Actual Achieved at Indicator Name Unit of Measure Baseline Original Target Target Completion Number of person days Number 0.00 1,122.00 8,500.00 8,372.00 worked (by women) in project-related routine road 24-Mar-2014 09-Jan-2014 15-Apr-2021 28-Apr-2023 maintenance activities Comments (achievements against targets): The target is fully achieved (98 percent). Women worked 8,372 days on routine road maintenance financed by RMRPII. A.2 Intermediate Results Indicators Component: Rehabilitation, Upgrade and/or Maintenance of Roads and Bridges Formally Revised Actual Achieved at Indicator Name Unit of Measure Baseline Original Target Target Completion Number of works contracts Number 0.00 10.00 9.00 9.00 tendered. 01-Jul-2011 09-Jan-2014 02-May-2016 28-Apr-2023 Comments (achievements against targets): Page 28 of 50 The World Bank PNG Road Maintenance and Rehabilitation Project II (P119471) The revised target of nine contracts was achieved. Component: Technical Assistance for Project Management, Design, Supervision and Capacity Building Formally Revised Actual Achieved at Indicator Name Unit of Measure Baseline Original Target Target Completion Number of domestic Number 0.00 30.00 10.00 10.00 companies trained in bidding and contract management. 30-Aug-2011 11-Apr-2011 15-Apr-2021 10-Mar-2023 Comments (achievements against targets): The project fully achieved the target. The EPM trained ten small- and medium-sized contractors who were interested in bidding on project road works and the PBC contractor. Formally Revised Actual Achieved at Indicator Name Unit of Measure Baseline Original Target Target Completion Number of gender-based Number 0.00 20.00 75.00 75.00 violence and HIV/AIDS awareness workshops 01-Jul-2011 09-Jan-2014 15-Apr-2021 10-Mar-2023 conducted. Comments (achievements against targets): Page 29 of 50 The World Bank PNG Road Maintenance and Rehabilitation Project II (P119471) This indicator was added in 2014 and increased in 2021 to reflect the scaled-up efforts. The workshops included discussion of HIV/AIDS and SH/SEA. The target was fully achieved. Formally Revised Actual Achieved at Indicator Name Unit of Measure Baseline Original Target Target Completion Grievances responded to Percentage 80.00 100.00 100.00 within the stipulated service standards for response time 15-Oct-2021 15-Apr-2021 28-Apr-2023 Comments (achievements against targets): The indicator was achieved in the final calendar year of project implementation (January 2023-April 2023). Page 30 of 50 The World Bank PNG Road Maintenance and Rehabilitation Project II (P119471) B. KEY OUTPUTS BY COMPONENT Objective/Outcome 1: Improve road transport to project areas through providing satisfactory physical condition and safety in selected roads 1. Roads rehabilitated, rural (224 km) Outcome Indicators 2. Percentage of project roads being maintained by private contractors under PBC (39%) 1. Number of works contracts tendered (number) Intermediate Results Indicators 2. Grievances responded to within the specified time frame (percentage) 1. Road long-list screening undertaken before prioritization 2. Road prioritization study for final road selection 3. Upgrade to seal 22 km of Hiritano Highway from Inawabui to Bereina (Central Province) 4. Maintenance of 65 km of unsealed road from Malalaua to Kerema (Gulf Province) 5. Upgrade to seal 56.5 km of Hiritano Highway from Malalaua to Epo in Gulf Province, including construction of large new box culverts/bridges and extension of a major vented ford (Gulf Key Outputs by Component Province) (linked to the achievement of the Objective/Outcome 1) 6. Upgrade to seal 37.4 km of Hula Road from Gabone to Geno Junction in Central Province; maintenance of 11.75 km of additional road; construction and improvement of drainage and other ancillary structures (Central Province) 7. Upgrade to seal 52 km of ECR from Yalua to Kehelala in Milne Bay Province, including replacement of seven bridges, construction of 400 m of sea wall, installation of safety features, and relocation and improvement of one market at East Cape Point (Milne Bay Province) Page 31 of 50 The World Bank PNG Road Maintenance and Rehabilitation Project II (P119471) 8. Hybrid OPBRC on 126 km of the Hiritano Highway in Central Province and Gulf Province. This included rehabilitation of 10 km from Vanapa to Veimauri; execution of all deferred maintenance (for example, ‘initial repairs’) along 102 km of the road; spot full- depth patching of selected areas; 46 km of resealing works; 4.5 years of routine maintenance of pavement, vegetation, drainage, and safety features along 112 km of the road; and rehabilitation of 14.4 km of road from Brown River to Vanapa (DBST) followed by two years of routine maintenance. 9. Preparation of Anti Sexual Harassment and Sexual Exploitation and Abuse Action Plan and implementation of 75 SH/SEA and HIV/AIDS mitigation outreach and training events 10. Upgrade to seal 25.9 km of Coastal Highway from Bogia to Awar (Madang Province) 11. Complete redesign and reconstruction of 9.5 km of the Hiritano Highway from Kerema Town to Epo in Gulf Province, to an improved safety standard (Gulf Province) 12. At least six road safety inspections/audits Objective/Outcome 2: Strengthen institutional arrangements for road maintenance, including the participation of the private sector and communities 1. Percentage of Hiritano Highway being maintained to good Outcome Indicators condition under PBC (42 percent) 1. Number of domestic companies trained in bidding and contract Intermediate Results Indicators management (nine companies received training, including the PBC contractor). Page 32 of 50 The World Bank PNG Road Maintenance and Rehabilitation Project II (P119471) 1. Extensive on-the-job training for DoWH engineers (2014–2015) including seven full-day training sessions focused on applying lessons to ongoing DoWH work 2. Eight trainings for small- and medium-size contractors 3. On-the-job training for financial management staff (2014) 4. Intensive E&S workshop for safeguards staff (2016) 5. Baseline SESs 6. PBC Options Analysis study 7. Consultations with DoWH and contractors leading to development of the hybrid OPBRC contract suitable for demonstration in PNG Key Outputs by Component 8. Preparation of the PBC bidding documents, including selection of (linked to the achievement of the Objective/Outcome 2) appropriate road sections and performance standards based on the consultations 9. PBC document and sample specifications made available for DoWH 10. Preparation of a maintenance Policy Statement 11. Preparation of staffing, responsibilities, and organogram for a PBC Unit/MMU 12. Implementation of a demonstration OPBRC on the Hiritano Highway, including demonstration of integrated maintenance 13. Market reference data generated for estimating costs of road maintenance needs for asset management 14. Road data collection through the PBC Objective/Outcome 3: enhance road-related economic opportunities for women 1. Number of person days worked (by women) as a result of project activities on highways rehabilitation (number) Outcome Indicators 2. Number of person days worked (by women) in project-related routine road maintenance activities (number) Page 33 of 50 The World Bank PNG Road Maintenance and Rehabilitation Project II (P119471) 1. Number of gender-based violence and HIV/AIDS awareness Intermediate Results Indicators workshops conducted (number) 1. Contractor’s recruiters trained in recruitment of women from local villages for employment in project road works 2. 75 SH/SEA and HIV/AIDS awareness raising events among the workforce and communities 3. Entry and exit surveys for women employed on road works Key Outputs by Component 4. Women were employed systematically in seven road (linked to the achievement of the Objective/Outcome 3) rehabilitation contracts 5. Women were employed systematically in two road maintenance contracts 6. Financial literacy training program prepared, including terms of references and printed learning materials Page 34 of 50 The World Bank PNG Road Maintenance and Rehabilitation Project II (P119471) ANNEX 2. BANK LENDING AND IMPLEMENTATION SUPPORT/SUPERVISION A. TASK TEAM MEMBERS Name Role Preparation Demetrios Papathanasiou Task Team Leader Scott Wilkinson Infrastructure Specialist Angela Nyawira Khaminwa Social Development Specialist Nanda Gasparini Social Development Specialist Evelyn Villatoro Procurement Specialist John Lowsby Team Member Gerardo F. Parco Environmental Specialist Kylee Coulson Financial Management Specialist Anil Somani Environment Team Member Supervision/ICR Tawia Addo-Ashong, Satoshi Ogita Task Team Leader(s) Eric Leonard Blackburn Procurement Specialist Moses Wasike Financial Management Specialist Thomas John Callander Social Specialist Katsuyuki Fukui Team Member Caroline Evari Team Member Rosemary Alexandra Davey Environmental Specialist Simon Kenema Social Specialist Jordan Imal Procurement Team Dean Georgakopoulos Procurement Team Page 35 of 50 The World Bank PNG Road Maintenance and Rehabilitation Project II (P119471) B. STAFF TIME AND COST Staff Time and Cost Stage of Project Cycle No. of staff weeks US$ (including travel and consultant costs) Preparation FY11 30.897 219,620.47 FY12 .200 37,956.35 FY17 0 2,316.09 Total 31.10 259,892.91 Supervision/ICR FY12 17.586 135,292.55 FY13 27.991 180,967.57 FY14 27.493 84,806.89 FY15 17.494 84,351.59 FY16 21.447 156,777.19 FY17 33.555 319,757.81 FY18 31.323 361,180.05 FY19 24.054 274,448.76 FY20 20.444 175,692.68 FY21 24.309 151,073.21 FY22 33.251 226,205.04 FY23 40.143 326,949.25 FY24 7.394 62,323.87 Total 326.48 2,539,826.46 Page 36 of 50 The World Bank PNG Road Maintenance and Rehabilitation Project II (P119471) ANNEX 3. PROJECT COST BY COMPONENT Actual at Project Percentage of Amount at Approval Components Closing (US$, Approval (US$, (US$, millions) millions) millions) Component 1 - Rehabilitation, Upgrade 46.0 121.7 264 and/or Maintenance of Roads and Bridges Component 2 - Technical Assistance for Project Management, Design 7.0 19.8 282 and Supervision Services, and Capacity Building Component 3 - Contingency for Disaster 0.0 0.0 0 Risk Response Total 53.0 141.5a 267% Note: a. SDR 4.93 million (US$6.65 million equivalent) was cancelled via restructuring in April of 2023. A further US$4.93 million that was not disbursed by the grace period has been cancelled. Exchange rate fluctuations absorbed a further US$16.4 million, including approximately US$11 million in exchange rate losses incurred by the AF credit in 2014. Page 37 of 50 The World Bank PNG Road Maintenance and Rehabilitation Project II (P119471) ANNEX 4. Counterpart Financing Table 4.1 summarizes annual cash balances of the Counterpart Financing Account based upon the project’s audited financial statements. Table 4.1. GoPNG Counterpart Funds (Papua New Guinea Kina) Year Received Expended Balance 11 2012 22,174,775 — 22,174,775 2013 10,204 5,827,145 16,357,834 2014 8,992,747 5,434,705 19,915,876 2015 22,011,191 8,994,597 32,932,470 2016 5,031,819 28,341,440 9,622,849 2017 48,988 (2,043,606) 11,715,443 2018 57,577 2,870,342 8,902,678 2019 3,235,904 7,810,674 4,327,908 2020 5,014,978 7,734,655 1,608,231 2021 2,007,635 1,298,184 2,317,682 2022 2,290,789 3,649,374 959,097 a 2023 TBA TBA Total 70,876,607 Note: a. 7,000,000 appropriated for calendar year 2023. 11 Counterpart financing carried over from the RMRP. Page 38 of 50 The World Bank PNG Road Maintenance and Rehabilitation Project II (P119471) ANNEX 5. EFFICIENCY ANALYSIS 1. RMRPII financed six rehabilitation contracts in four provinces of PNG totaling 200 km and one hybrid OPBRC contract comprising upgrading to seal 24.4 km of roads and multiple years of maintenance of 126 km of road. In total, RMRPII financed upgrading to seal 224 km of project roads. 2. Economic evaluation of the project roads undertaken during appraisal and implementation was completed using Highway Development and Management Module 4 (HDM-4) for the initial two road upgrading contracts on the Hiritano Highway, Inawabui to Bereina and Malalaua to Epo, and for ECR in Milne Bay Province; no ex ante economic evaluation is available for the remaining project roads, which were selected after Board approval of the AF in 2014. For all the projects, the HDM-4 object files used at appraisal stage could not be obtained, and key assumptions are not available. 3. Due to data limitations, economic reevaluation could be performed for only six of the project rehabilitation contracts, totaling 115 km of rehabilitation works (see table 5.9).12 Economic reevaluation used the RED model version 4 with the vehicle operating cost coefficients derived from theHDM-4 Road User Cost Model version 5.01. RED analysis accounts for road agency and road user costs based on a predicted mean IRI value over the analysis period. The analysis included the value of time of road users. Collisions costs and greenhouse gas emissions were not accounted in the analysis. 4. The ex post analysis used a 6 percent discount rate for an analysis period covering 20 years of road service while assuming a standard conversion factor (SCF) of 0.85 to convert the financial costs into economic costs. 5. Two alternatives were considered for each project: • ‘Without-project’ scenario: This is the do minimum case and assumes preservation of the existing assets through routine maintenances such as grading. • ‘With-project’ scenario: This involves upgrading the roads to paved standards with DBST surfacing and thereafter assuming some routine maintenance. The work standards are as shown in table 5.1. 6. As maintenance funding in PNG has historically been constrained, both with- and without-project scenarios cautiously assume minimum maintenance. DoWH was unable to provide maintenance spending for the project roads or typical maintenance costs. Field observation indicates that routine maintenance is regularly deferred in the project areas. Maintenance costs for both with-project and without-project scenarios were therefore estimated based on the cost of routine maintenance and shaping the gravel of Malalaua to Epo (65 km) section of the Hiritano Highway in 2013–2014 financed under RMRPII, adjusted for inflation. The analysis assumed that maintenance would be deferred in the without-project scenario and roads would need periodic shaping every third year to remain in a usable condition. As actual 12Economic reevaluation could not be carried out for three project roads due to lack of traffic data: (a) rehabilitation and upgrading to seal the Hiritano Highway from Inawabui Village to Bereina (22 km), (b) maintenance from Malalaua to Kerema (65 km) on the Hiritano Highway in Gulf Province, and (c) rehabilitation and upgrading to seal the Hiritano Highway from Malalaua to Epo (56.5 km) in Gulf Province. Page 39 of 50 The World Bank PNG Road Maintenance and Rehabilitation Project II (P119471) maintenance spending patterns are not known, the with-project scenario assumed that the maintenance costs would be 75 percent of the without-project scenario costs. 7. Ex post economic evaluation of the rehabilitation of 24.4 km of the Hiritano Highway under the hybrid OPBRC contract relied on traffic counts obtained from DoWH’s EPM. For the four remaining road works, for which ex ante economic evaluation was completed, data for the ex post evaluation were obtained from an unpublished Finnish Overseas Consultants prioritization study prepared for DoWH to evaluate road works proposed for financing under RMRPII.13 PNG Economic Analysis Findings Table 5.1. Road Works and Unit Costs Capital Maintenance Work Cost Construction Annual Cost Cost No. Road Section Type (US$, Period Stream (thousands, millions) US$/km/year) 30% Year 1; Hula Road from Gabone to Geno Upgrade 30% Year 2; 1. Junction to Hula in Central to seal 14.34 3 1.79 and 40% Province (DBST) Year 3 Upgrade 30% Year 1; ECR from Yalua to Kehelala in to seal 30% Year 2; 2. 24.82 3 1.79 Milne Bay Province (DBST) and 40% Year 3 Upgrade OPBRC Hiritano Highway: Vanapa 3. to seal 3.94 1 100% Year 1 1.79 to Veimauri (DBST) Upgrade OPBRC Hiritano Highway: Vanapa 4. to seal 4.29 1 100% Year 1 1.96 to Brown River (DBST) Upgrade Coastal Highway from Bogia to 5. to seal 12.74 1 100% Year 1 2.14 Awar in Madang Province (DBST) Upgrade Hiritano Highway from Kerema 6. to seal 13.38 1 100% Year 1 2.14 Town to Epo in Gulf Province (DBST) 8. As limited deterioration data are available within PNG, reevaluation is based upon the standard assumption of the RED model that deterioration of pavement in low volume roads is primarily attributable to environmental factors and that a stable IRI can therefore be maintained. The upgrade has been assumed to reset the IRI to 4.0. The assumed road conditions before and after improvement are provided in table 5.2, which reflects a reasonable starting roughness for improved pavement. 13Finnish Overseas Consultants (FinnOC) Ltd. May 2014. Prioritizing of Road Projects, under Road Maintenance and Rehabilitation Project II (RMRP II) Additional Financing (AF). Final Report (Draft). Page 40 of 50 The World Bank PNG Road Maintenance and Rehabilitation Project II (P119471) Table 5.2. Road Condition IRI before IRI after No. Road Section Improvement14 Improvement Hula Road from Gabone to Geno Junction to Hula in Central 4 1. 15.11 Province 2. ECR from Yalua to Kehelala in Milne Bay Province 13.26 4 3. OPBRC Hiritano Highway: Vanapa to Veimauri 12.80 4 4. OPBRC Hiritano Highway: Vanapa to Brown River 12.80 4 5. Coastal Highway from Bogia to Awar in Madang Province 13.50 4 6. Hiritano Highway from Kerema Town to Epo in Gulf Province 15.69 4 9. For the economic reevaluation purposes, each project was assessed separately given the fact that each commenced and was completed at different time frames. To this end, the costs and traffic volumes had to be rebased to different completion years as shown in table 5.3. Table 5.3. Base Years No. Road Section Design Year Base Year 1. Hula Road from Gabone to Geno Junction to Hula in Central Province 2014 2019 2. ECR from Yalua to Kehelala in Milne Bay Province 2014 2019 3. OPBRC Hiritano Highway: Vanapa to Veimauri 2018 2019 4. OPBRC Hiritano Highway: Vanapa to Brown River 2018 2021 5. Coastal Highway from Bogia to Awar in Madang Province 2014 2023 6. Hiritano Highway from Kerema Town to Epo in Gulf Province 2014 2023 10. To rebase the traffic volumes to the opening years of the project roads, the growth rates shown in table 5.4 were adopted with the generated (induced traffic) being applied after completion of the projects. Table 5.4. Traffic Forecasting Growth No. Road Section Rate15 (per Generated Traffic year) Hula Road from Gabone to Geno Junction to Hula in 1. 6%. Central Province 10% in Year 1 of upgrade; 20% in 2. ECR from Yalua to Kehelala in Milne Bay Province 6%. the Year 2; 30% in Year 3; and 3. OPBRC Hiritano Highway: Vanapa to Veimauri 7.5%. thereafter generated traffic 4. OPBRC Hiritano Highway: Vanapa to Brown River 7.5% grows at the normal growth Coastal Highway from Bogia to Awar in Madang rate. 5. 6% Province 14 Finnish Overseas Consultants (FinnOC) Ltd. May 2014. Prioritizing of Road Projects, under Road Maintenance and Rehabilitation Project II (RMRP II) Additional Financing (AF). Final Report (Draft). 15 Ibid. Page 41 of 50 The World Bank PNG Road Maintenance and Rehabilitation Project II (P119471) Growth No. Road Section Rate15 (per Generated Traffic year) Hiritano Highway from Kerema Town to Epo in Gulf 6. 6% Province 11. The rebased traffic volumes are as shown in table 5.5. Table 5.5. Rebased AADTs Design Base Design Base No. Road Section Year Year Year Year AADT16 AADTa Hula Road from Gabone to Geno Junction to Hula in 1. 2014 294 2019 393 Central Province 2. ECR from Yalua to Kehelala in Milne Bay Province 2014 318 2019 426 3. OPBRC Hiritano Highway: Vanapa to Veimauri 2018 215 2019 231 4. OPBRC Hiritano Highway: Vanapa to Brown River 2018 215 2021 231 Coastal Highway from Bogia to Awar in Madang 5. 2014 181 2023 306 Province Hiritano Highway from Kerema Town to Epo in Gulf 6. 2014 387 2023 654 Province Note: a. Obtained by forecasting the base year AADTs using the growth rates detailed in table 5.4 . 12. The assumed traffic composition for the above AADTs is as summarized in table 5.6. Table 5.6. Traffic Composition Vehicle Type Composition17 (%) Car 21 Pickup 15 Bus 42 Truck light 4 Truck medium 9 Truck heavy 6 Truck articulated 3 13. For the economic vehicle fleet characteristics, the 2016 data summarized in table 5.7 were also rebased to the various completion years. New vehicle cost, new tire cost, fuel cost, lubricant cost, and maintenance costs were rebased using changes in PNG’s consumer inflation over the years while crew cost and work time rebased using changes in PNG’s gross domestic product (GDP) per capita over the years. 16 Finnish Overseas Consultants (FinnOC) Ltd. May 2014. Prioritizing of Road Projects, under Road Maintenance and Rehabilitation Project II (RMRP II) Additional Financing (AF). Final Report (Draft). 17 World Bank. “PNG Economic Evaluation Annex Third Draft 2019-08-15.” Page 42 of 50 The World Bank PNG Road Maintenance and Rehabilitation Project II (P119471) Table 5.7. Vehicle Fleet Characteristics (2016) 18 Truck Truck Truck Truck Car Pickup Bus Light Medium Heavy Articulated New vehicle cost 21,689 34,949 36,020 125,729 217,477 230,552 37,170 (US$) New tire cost (US$) 66 181 181 236 252 324 99 Fuel cost (US$/liter) 0.87 0.86 0.86 0.86 0.86 0.86 0.86 Lubricant cost 5.01 6.71 6.71 6.71 6.71 6.71 5.86 (US$/liter) Maintenance cost 2.85 2.85 2.85 4.03 4.03 4.03 2.85 (US$/hour) Crew cost (US$/hour) 0 2.28 2.85 2.85 4.03 8.05 3.36 Interest rate (%) 6 6 6 6 6 6 6 Work time (US$/hour) 1.24 1.24 0.17 0.17 0.17 0.17 0.17 Annual utilization (km) 18,000 30,000 45,000 55,000 65,000 65,000 45,000 Annual utilization 750 1400 1900 2750 3250 3,250 1,900 (hours) Service life (years) 10 10 5 6 10 10 6 Number of passengers 3 3 1 1 1 1 19 Operating weight 1.1 2.6 7.8 15 20 45 6.5 (tons) 1 . The cost adjustment factors deduced from changes in consumer price index and GDP per capita are provided in table 5.8. Table 5.8. Cost Adjustment Factor Inflation Adjustment GDP Per Capita No. Road Section Factor19 Adjustment Factor20 Hula Road from Gabone to Geno Junction to Hula 1.22 1. 1.04 in Central Province 2. ECR from Yalua to Kehelala in Milne Bay Province 1.22 1.04 3. OPBRC Hiritano Highway: Vanapa to Veimauri 1.22 1.04 4. OPBRC Hiritano Highway: Vanapa to Brown River 1.34 1.06 Coastal Highway from Bogia to Awar in Madang 1.46 5. 1.27 Province Hiritano Highway from Kerema Town to Epo in 1.46 6. 1.27 Gulf Province 18 World Bank. “PNG Economic Evaluation Annex Third Draft 2019-08-15.” 19 Source: https://data.worldbank.org/indicator/FP.CPI.TOTL.ZG?locations=PG. 20 Source : https://data.worldbank.org/indicator/NY.GDP.PCAP.CD?locations=PG. Page 43 of 50 The World Bank PNG Road Maintenance and Rehabilitation Project II (P119471) 15. The economic reevaluation findings are provided in table 5.9. The estimated NPV for the 115 km of works is US$148.9 million; EIRR ranged from 15.9 percent to 49.8 percent. These estimates meet or exceed expectations compared to similar projects. Table 5.9. Economic Indicators21 No. Road Section Ex ante (12% discount rate) Ex post (6% discount rate) NPV (US$, IRR (%) NPV (US$, IRR (%) millions) millions) 1. Hiritano Highway from Inawabui to n.a. >17.0a n.a. n.a. Bereina in Central Province 2. Hiritano Highway from Malalaua to Epo n.a. >17.0a n.a. n.a. in Gulf Province 3. Hula Road from Gabone to Geno A = 6.5, B = 8.5 — 32.3 25.1 Junction to Hula in Central Province 4. ECR from Yalua to Divinai in Milne Bay 9.56 17.2 Province 31.7 18.4 5. ECR from Divinai to Kehelala in Milne Bay 0.55 0.6 Province 6. OPBRC Hiritano Highway: Vanapa to n.a. n.a. 3.74 15.1 Veimauri 7. OPBRC Hiritano Highway: Vanapa to n.a. n.a. 7.61 21.1 Brown River 8. Coastal Highway from Bogia to Awar in 15.97 1.5 20.3 26.0 Madang Province 9. Hiritano Highway from Kerema Town to 11.1 7.5 18.9 49.8 Epo in Gulf Province Note: a. The PAD stated that only the EIRR exceeded 17 percent. 21 Ex ante indicators for works contracts 1 and 2 on the Hiritano Highway are extracted from the PAD; ex ante indicators for works contracts 4 and 5 are on ECR and extracted from the AF Project Paper (Report No. 78410-PG). Page 44 of 50 The World Bank PNG Road Maintenance and Rehabilitation Project II (P119471) ANNEX 6. Theory of Change and Results Framework Analysis Figure 6.1. Theory of Change derived from the PAD Problem statement: Poor primary road conditions and inadequate governance and institutional arrangements for maintenance limit access to safe and reliable road transport and increases reliance on costly and/or dangerous alternatives. Activities: Outputs: Intermediate Outcomes: Outcomes: Component 1: • Improved road PDO: (i) Improve road • Road traffic and condition data • Support to DoWH’s RAMS data conditions and all- transport to project areas collected for RAMS collection prioritization weather access through providing • Forward works program prepared • DoWH completes RAMS-based work • Improved safety satisfactory physical for road upgrading and condition and safety of program planning exercise • Enhanced access maintenance needs in 10 provinces selected roads and (ii) • Upgrade to seal the Hiritano to PMVs and buses • 150 km of roads rehabilitated strengthen institutional Highway from Inawabui to Bereina • Improved NRA including improved safety and arrangements for road and Malalaua to Kerema (84 km) and DoW ability to bridges maintenance including the • Rehabilitation, upgrade, and/or plan and implement • Maintenance of selected roads participation of the maintenance of additional roads and works involving the • Communities, including women, private sector and bridges based on prioritization private sector and communities. are employed in maintenance • Road safety assessments communities • More competition • Communities involved in road works for road works and • 150 km of road upgrading works maintenance Long-term outcomes: Component 2: designed and supervised • 30 contractors trained • Road transport supports • Technical support for • Training and technical assistance rural livelihoods and welfare implementation • Improved road access • Training small/medium contractors support to NRA reduces fragility risks • Engineering training for DoW* • DoW has improved capacity for • Maintenance will sustain • Strengthening of NRA capacity M&E, RAMS, and works improved roads and improve • Before and after SESs lifecycle efficiency • Communities engaged in maintenance Assumptions: (A1) Road upgrading/rehabilitation would cost less than US$307,000 per km; (A2) DoWH can undertake a RAMS-based prioritization of the 10 project provinces with limited technical support from the project; (A3) GoPNG would support use of project resources for the NRA's capacity building needs; (A4) Maintenance funding would increase over time due to addition of several new sources of revenue to the NRA, enabling it to increase annual maintenance spending (e.g., RMRMPII would not finance maintenance implemented by the NRA); (A5) Roads improved under RMRPII would be sustained through maintenance by the NRA. Page 45 of 50 The World Bank PNG Road Maintenance and Rehabilitation Project II (P119471) Table 6.1 Results Framework Analysis PDO: The project development objectives are to: (i) improve road transport to project areas through providing satisfactory physical condition and safety in selected roads; and (ii) strengthen institutional arrangements for road maintenance, including the participation of the private sector and communities; and (iii) enhance road-related economic opportunities for women. PDO 2011–2014 Original Indicator 2014–2016 2016–2021 Objective 2021–2023 / Final Indicators Indicator # (baseline; target) (baseline; target) (baseline; target) (i) 1 Roads rehabilitated, rurala (0 Target increased to 220 km Target decreased to 185 Target increased to 224 km km; 150 km) km 2011–2014: 2 Kilometers of roads Percentage of Hiritano The indicator was not Revised to Percentage of (i); maintained to good and fair Highway maintained to a revised, but the indicator Hiritano Highway maintained 2014–2023: conditiona,22 (35%; 40%) good condition (30%; 50%) definition was revised to to good condition under PBC (i) and (ii) [Good condition was defined define good condition as (30%; 42%) as IRI of 5.0 or lower.] IRI of 4 or lower. n.a. 3 Increase in the number of Dropped for reasons of — — road users on project roads measurement and (0%; 25%) attribution 2011–2014: 4 Increase in the number of Revised to Percentage of Target increased to 40%24 Revised to: Percentage of (ii); private sector companies national (project) roads national (project) roads being 2014–2023: actively engaged in road works being maintained by private maintained by private (i) (0; 30) contractors (20%; 25%)23 contractors under PBC (20%; 39%)25 22 This was defined as “This indicator measures the percentage of the classified road network in the project area that is in goo d and fair condition depending on the road surface and the level of roughness.” It monitored actual road conditions at the project and national levels, not the levels of maintenance delivered. 23 This indicator monitored maintenance under PBC and under traditional input-based contracts, while PDO indicator #2 monitored only PBC. 24 In response to concerns by DoWH that the indicator introduced in 2014 was unclear and difficult to monitor, the 2016 Restructuring clarified that the total project network size used to calculate this percentage was 298.2 km of national project roads: (a) Central Province: Inawabui to Bereina, 17.5 km; Gamoga Village to Hula, 23.9 km; and Vanapa Bridge to Bereina Township, 112.0 km; (b) Gulf Province: Malalaua to Epo, 56.5 km and Epo to Kerema, 9.5 km; (c) Madang Province: Bogia to Awar, 25.7 km; and (d) Milne Bay Province: Goilanai Bridge to Gopaia Bridge, 26.1 km and Gopaia Bridge to East Cape Point, 27.0 km. As RMRPII did not finance NRA-financed maintenance, this was not attributable to the project and not included in results monitoring. 25 The 2021 Restructuring increased the total project network size used to calculate this percentage from 298.2 km to 326 km. This resulted in an insignificant decrease in the outcome target. Page 46 of 50 The World Bank PNG Road Maintenance and Rehabilitation Project II (P119471) PDO 2011–2014 Original Indicator 2014–2016 2016–2021 Objective 2021–2023 / Final Indicators Indicator # (baseline; target) (baseline; target) (baseline; target) (iii) 5 New: Number of person (no change) Revised baseline and target days worked (by women) in (1,122; 40,000) — project-related routine road maintenance activities (0; 1,122) (iii) 6 — — New: Number of person Number of person days days worked (by women) worked (by women) as a as a result of project result of project activities on activities that are not highway rehabilitation (Target related to routine 8,500 person-days) maintenance (0; 6,000) Note: a. Denotes core or corporate results indicator. Page 47 of 50 The World Bank PNG Road Maintenance and Rehabilitation Project II (P119471) ANNEX 7. BORROWER, CO-FINANCIER AND OTHER PARTNER/STAKEHOLDER COMMENTS This ICR was shared with GoPNG, including DoWH, Department of National Planning and Monitoring, and Department of Treasury, for comments. Officials in DoWH confirmed that GoPNG had no comments on this ICR. DoWH has prepared its own project completion report. Page 48 of 50 The World Bank PNG Road Maintenance and Rehabilitation Project II (P119471) ANNEX 9. SUPPORTING DOCUMENTS Finnish Overseas Consultants (FinnOC) Ltd. May 2014. Prioritizing of Road Projects, under Road Maintenance and Rehabilitation Project II (RMRP II) Additional Financing (AF). Final Report (Draft). World Bank Group. 2011. Papua New Guinea - Country assistance strategy (English). Washington, D.C. : World Bank Group. http://documents.worldbank.org/curated/en/509721468144547867/Papua-New- Guinea-Country-assistance-strategyWorld Bank. World Bank. 2011. Papua New Guinea - Second Roads Maintenance and Rehabilitation Project : Project Appraisal Document. Washington, D.C. : World Bank. https://documentsinternal.worldbank.org/search/14054177 World Bank. 2014. Papua New Guinea - Second Phase of Road Maintenance and Rehabilitation Project : Additional Financing and Restructuring. Washington D.C. ; World Bank Group. https://documentsinternal.worldbank.org/search/19388250 World Bank. 2016. Papua New Guinea - Second Phase of Road Maintenance and Rehabilitation Project : Restructuring. Washington, D.C. : World Bank Group. https://documentsinternal.worldbank.org/search/26362949 World Bank. 2019. Papua New Guinea - Country Partnership Framework for the Period FY19-FY23 : Vol. 2 of 2. Washington, D.C. : World Bank Group. https://documentsinternal.worldbank.org/search/31019582 World Bank. 2020. Papua New Guinea - Country Partnership Framework for the Period FY19-FY23 : Summary. Vol. 1 of 2. Washington, D.C. : World Bank Group. https://documentsinternal.worldbank.org/search/31260891 World Bank. 2021. Papua New Guinea - Second Phase of Road Maintenance and Rehabilitation Project : Restructuring. Washington, D.C. : World Bank Group. https://documentsinternal.worldbank.org/search/32999997 World Bank. PNG Economic Evaluation Annex. (unpublished manuscript, August 15, 2019). Washington, D.C. Page 49 of 50 The World Bank PNG Road Maintenance and Rehabilitation Project II (P119471) MAP Page 50 of 50