ICRR 12316 Report Number : ICRR12316 IEG ICR Review Independent Evaluation Group 1. Project Data: Date Posted : 02/24/2006 PROJ ID :P009524 Appraisal Actual Project Name :Dhaka Urban Transport Project Costs 234.2 124.9 US$M ) (US$M) Country :Bangladesh Loan/ US$M ) Loan /Credit (US$M) 177.0 93.1 Sector (s):Central ): government US$M ) Cofinancing (US$M) administration; Sub-national government administration; Other social services; Roads and highways L/C Number :C3163 FY ) Board Approval (FY) 00 Partners involved : Closing Date 06/30/2004 06/30/2005 Evaluator : Panel Reviewer : Division Manager : Division : Peter Nigel Freeman Howard Nial White Alain A. Barbu IEGSG 2. Project Objectives and Components a. Objectives The project was intended as the first phase of a multi year program to address the severe and complex transport problems prevailing in Dhaka. The original objectives were: 1. To improve urban transport infrastructure and services in the Dhaka Metropolitan Area (DMA) in an economically and environmentally sustainable manner . 2. To strengthen the institutional and policy framework and address long -term transport planning and coordination issues in DMA. b. Components (or Key Conditions in the case of Adjustment Loans ): 1. Infrastructure development including traffic management measures, road improvements, bus lanes and lay -bys, bus terminal rehabilitation, pedestrian facility improvements, non -motorized traffic network improvements, grade separated interchange facilities and road flood damage rehabilitation . (Original cost US$ 178.2 million; 76%; Mid-Term Review (MTR) revision US$ 96.6 million; 76.4% of revised total less contingencies . Final cost US$ 95.1 million; 79.5% of total final cost less miscellaneous costs ). 2. Vehicles and equipment support . (Original cost US$ 10.9 million; 4.7%; MTR revision US$ 5.5 million; 4.3%. Final US$ 4.5 million; 3.8%). 3. Institutional strengthening and capacity building, including project preparation, design, supervision and monitoring, financial management services and institutional development and training . (Original cost US$ 34.4 million; 14.7%; MTR revision US$ 19.0 million; 15%. Final US$ 15.1 million; 12.6%). 4. Policy support and future studies . (Costs included under item 3 above). 5. Land acquisition and resettlement . (Original cost US$ 10.7%; MTR revision US$ 5.4 million; 4.3%. Final US$ 4.9 million; 4.1%). The air quality related works in the project were pursued in coordination with another IDA financed project, the Dhaka Air Quality Management Project (AQMP). Vehicular emissions were to be reduced through enforcement of different measures, some of which were included as legal covenants . c. Comments on Project Cost, Financing, Borrower Contribution, and Dates The project's failure to show satisfactory progress in implementation (three years after approval only 16 percent of the (original) credit had been disbursed) led to a project restructuring at the MTR in February 2002; the revised scope (US$ 140.3 million) was then 60 percent of the cost of the originally designed project . However, this restructuring and the new targets were not formalized at Board level, neither were the development objectives changed . At project closing the total cost of the project was US$ 124.9 million of which IDA's share was US$ 93.1 million. US$ 106.2 million was canceled from the credit. The final project cost was 55 percent of the originally estimated project cost and 89 percent of the revised cost estimate at MTR . Project closure was extended by one year because of implementation delays including the preparation of a long -term strategic plan. 3. Relevance of Objectives & Design : The project objectives were relevant to the Bank's Country Assistance Strategy and related sector strategies at the time of the appraisal. The objectives were clear, but somewhat generalized . While this no doubt allowed for flexibility, more specific objectives in tandem with the capacity of the existing institutional entities may have been more appropriate. Improvements in transport services are included in the first objective, but there was no technical assistance sub-component to support it. The MTR indicated that the project was poorly designed; it was highly complex involving many different ministries and implementing agencies and had too many components, especially for a first urban transport operation in Bangladesh; the support for public transport service improvements was also inadequate . 70 percent of the project works was assigned to the Dhaka City Corporation (DCC), an agency with very limited institutional and financial capacity. The implementation arrangement was ineffective by giving lead implementation responsibility to the newly created Dhaka Transport Coordination Board, which lacked the authority for coordination . Although a Project Implementation Unit was established by DCC, it was created outside the mainstream . Commitment, ownership and leadership were weak and this led to a poor implementation record . Risk analysis and mitigation measures during preparation were inadequate and although no formal assessment at entry was carried out, quality at entry was clearly unsatisfactory. After the first 30 months the MTR indicated that the development objectives and implementation progress were unsatisfactory and noted that five problem flags had been raised . 4. Achievement of Objectives (Efficacy) : Since the restructuring was not formalized the ICR Review assessed the project against the original objectives, targets and components in accordance with current guidelines . To improve urban transport infrastructure and services in the Dhaka Metropolitan Area (DMA) in an economically and environmentally sustainable manner . (Modestly achieved). Only 53 percent of the originally planned physical works took place . The cutbacks included underpasses, the Jatrabari Flyover, an emission laboratory and portions of the intersection improvements, equipment procurement, flood damage rehabilitation and other improvements and facilities . The cancelation of the Jatrabari Flyover was a particularly negative factor in the achievement of the intended traffic flow improvements, but the signalization of 68 intersections did result in the overall traffic speed in central Dhaka improving from 15 to 22kph as against the original target of 30 kph. Traffic accidents and motor vehicle pollution have both decreased, while volumes of public passenger vehicles have increased . Equipment provision not subject to cancellation was largely satisfactory, although unfocused. Economic sustainability was not given sufficient attention; in the logframe (Annex 1 PAD) it does not feature, which may explain why there are no indicators covering this important matter . To strengthen the institutional and policy framework and address long -term transport planning and coordination issues in DMA. (Modestly achieved). The institutional strengthening and capacity building activities in the project were superficial and were not specifically designed to address the weak implementation capacity of the newly created Dhaka Transport Coordination Board (DTCB) or the limited institutional and financial capacity of the DCC . DTCB has suffered from frequent changes in leadership and an uncertain revenue budget status . Regarding the traffic management measures, although there is a three year maintenance arrangement in place, the concern is that the capacity and capability of the staff within the Traffic Engineering Division will not be sufficient to enable effective participation in the necessary monitoring activities associated with the operation and maintenance of the traffic signalling system . The ICR notes that there is a significant risk that if the signals are not operated and maintained effectively, they will fall into disrepair as has happened in many other developing cities . The award of the pilot bus route franchise was not effected by the end of the project and is now considered unlikely to materialize . The procurement of consultants for the important long -term transport strategic plan for Dhaka was delayed for reasons not explained in the ICR, but the result of the delay was to allow only a very short time window for the completion of the study. This led to poor quality, partial analysis and inadequate results that impacted the decision-making process because ownership was understandably weak . The Bank did try to salvage this situation and the study period was extended, but this necessitated a separate financing arrangement after the closing date . The final report was an improvement. Taking all of the above into account together with the comments on efficiency below, the outcome of the project is rated moderately unsatisfactory . 5. Efficiency : The ERR calculated at appraisal (on 52% of the physical works) was 27%. The reassessment at completion showed an ERR of 29% which is satisfactory, but for only 44% of the works since certain items were dropped or not completed. The ICR notes that the influence of some of the physical improvements could have been much higher if the quality of the designs and construction had been better . After the rehabilitation of the existing bus terminals there were complaints from both the operators and the passengers about the quality of the workmanship in the facilities . 12 pedestrian footbridges were completed mainly in the vicinity of schools, but an independent survey performed by the Center for Urban Studies showed that these bridges were not fully utilized due to a lack of enforcement . There were also significant delays in the works schedules for physical improvements and repeated design changes made it impossible to implement the flyover components in a timely manner . Procurement was generally slow and the Bank was part of this problem because it was often tardy in providing no objection decisions . The Bank could also have been more proactive in helping to resolve the logjam in the carrying out of land acquisition and resettlement procedures. In bringing the project to closure the focus appears to have been more on the completion of the physical works than on trying to strengthen the capacity of the implementing agency . The cutbacks in flood damage rehabilitation were also expected to adversely affect future maintenance costs . Overall efficiency was modest. 6. M&E Design, Implementation, & Utilization: The original project performance indicators were broad and in most cases baseline data were neither provided nor measured through the project period . Although the performance indicators were revised to be more realistic at MTR they were not formally revised, neither were the project's development objectives reviewed even though this would have been a good opportunity to do so . 7. Other (Safeguards, Fiduciary, Unintended Impacts--Positive & Negative): Land acquisition and resettlement was carried out according to Bank procedures, but the administration of these matters was extremely slow and inefficient . The successful removal of the pollutant two -stroke engine three-wheelers from the city was marred by the disregard for the recommended social measures to alleviate adverse impacts on the livelihood of affected drivers . However, this was primarily the responsibility of the AQMP project, while the urban transport project was responsible for physical infrastructure affecting non -motorized traffic. 8. Ratings : ICR ICR Review Reason for Disagreement /Comments Outcome : Satisfactory Moderately IEG rates a project as moderately Unsatisfactory unsatisfactory ( a rating which does not yet exist under the ICR's four point scale ) when it is expected to achieve its objectives with major shortcomings . See sections 4 and 5. Institutional Dev .: Modest Modest Sustainability : Likely Non-evaluable Although the sustainability of the physical assets looks reasonably likely there are serious doubts surrounding the future capability and financial robustness of the implementing agencies The overall assessment of sustainability at this stage is non-evaluable. Bank Performance : Satisfactory Unsatisfactory Project design was inappropriate to the abilities of the borrower and even after restructuring most attention was given to completing the physical works rather than to trying to assist in resolving the long-term problem. The Bank appears to have been only partially effective in resolving procurement issues, compliance with social measures, and the resolution of delays in land acquisition and resettlement. Borrower Perf .: Unsatisfactory Unsatisfactory Quality of ICR : Satisfactory NOTES: NOTES - When insufficient information is provided by the Bank for IEG to arrive at a clear rating, IEG will downgrade the relevant ratings as warranted beginning July 1, 2006. - ICR rating values flagged with ' * ' don't comply with OP/BP 13.55, but are listed for completeness . 9. Lessons: 1. Complex project designs should be avoided in a weak implementation environment . 2. Borrower ownership and leadership are essential to ensure progress where significant policy and institutional reform is envisaged. 3. Lines of authority for project management should be clearly defined . 4. Where local administrative capacity is weak a highly experienced independent engineer should be appointed . 5. Public relations and a comprehensive communication strategy are particularly important for urban transport projects. 6. To support economic sustainability measurable actions should be included as part of the project design and monitored appropriately. 10. Assessment Recommended? Yes No Why? There are likely to be many more urban transport projects in large Asian cities and it is important to learn how to improve project design and identify key criteria for success . In this case it will also be useful to follow up on this program and assess what happened after project closure and to what extent the work completed under the project was sustainable. 11. Comments on Quality of ICR: The ICR is commendably presented and well -written. The authors, however, do not appear to be aware of the procedure for rating projects which have been restructured, where this restructuring has not been formally approved by the Board. Some of the ratings seem to be overly optimistic, despite a valiant effort by the team after restructuring to get this difficult project back on track .