Document of The World Bank FOR OFFICIAL USE ONLY Report No: 20620 IMPLEMENTATION COMPLETION REPORT (27950; 22660; 22661) ONA CREDIT IN THE AMOUNT OF SDR 52.6 MILLION (US$68.7 MILLION EQUIVALENT) TO THE REPUBLIC OF SENEGAL FOR THE TRANSPORT SECTOR ADJUSTMENT/INVESTMENT PROGRAM June 22, 2000 Transport Group 2 Africa Region This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization. CURRENCY EQUIVALENTS (Exchange Rate Effective) Currency Unit = CFAF CFAF 1 = US$ 0.33 US$ I = CFAF 300 FISCAL YEAR January December ABBRENIATIONS AND ACRONYMS Vice President: Jean-Louis Sarbib Country Manager/Director: Mahmood A. Ayub Sector Manager/Director: Maryvonne Plessis-Fraissard Task Teamn Leader/Task Manager: Jean-Noel Guillossou FOR OFFICIAL USE ONLY CONTENTS Page No. 1. Project Data 1 2. Principal Performance Ratings I 3. Assessment of Development Objective and Design, and of Quality at Entry 1 4. Achievement of Objective and Outputs 5 5. Major Factors Affecting Implementation and Outcome 8 6. Sustainability 10 7. Bank and Borrower Performance 12 8. Lessons Learned 13 9. Partner Comments 16 10. Additional Information 16 Annex 1. Key Performance Indicators/Log Frame Matrix 17 Annex 2. Project Costs and Financing 19 Annex 3. Economic Costs and Benefits 23 Annex 4. Bank Inputs 26 Annex 5. Ratings for Achievement of Objectives/Outputs of Components 28 Annex 6. Ratings of Bank and Borrower Performance 29 Annex 7. List of Supporting Documents 30 Annex 8. Beneficiary Survey Results 31 Annex 9. Stakeholder Workshop Results 32 Annex 10 Transport Companies; Selected Performance Indicators 35 This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not be otherwise disclosed without World Bank authorization. Project ID: P002342 Project Name:TRANSPORTSEC.SECAL Team Leader: Jean-Noel Guillossou TL Unit: AFTT2 ICR Type: Intensive Learning Model (ILM) of ICR Report Date: June 22, 2000 1. Project Data Name: TRANSPORT SEC. SECAL L/C/TF Number: 27950; 22660; 22661 Country/Department: SENEGAL Region: Africa Regional Office Sector/subsector: TH - Highways; TP - Ports & Waterways; TW - Railways KEY DATES Original Revised/Actual PCD: 02/16/87 Effective: 02/28/92 Appraisal: 05/30/88 MTR: 02/28/95 Approval: 06/13/91 Closing: 12/31/97 12/31/99 Borrower/lImplementing Agency: GOVT OF SENEGAL/MIN OF EQUIP AND CONCERNED TRANSP PARASTATALS Other Partners: STAFF Current At Appraisal Vice President: Callisto E. Madavo Edward V. K. Jaycox, Regional V. Pres. Country Manager: Mahmood A. Ayub Katherine Marshall, Dept. Dir. Sector Manager: Maryvonne Plessis-Fraissard Peter Watson, DIVISION CHIEF Team Leader at ICR: Jean-Noel Guillossou Brigitta Mitchell, Mission Leader ICR Primary Author: Jerome F. Chevallier 2. Principal Performance Ratings (HS=Highly Satisfactory, S=Satisfactory, U-Unsatisfactory, HL=Highly Likely, L=Likely, UN=Unlikely, HUN=Highly Unlikely, HU=Highly Unsatisfactory, H=High, SU=Substantial, M=Modest, N=Negligible) Outcome: S Sustainability: L Institutional Development Impact: M Bank Performance: S Borrower Performance: S QAG (if available) ICR Quality at Entry: S Project at Risk at Any Time: Yes 3. Assessment of Development Objective and Design, and of Quality at Entry 3.1 Original Objective: The objective of the Transport Sector Adjustrnent/Investment Program, approved in June 1991, was to support the ongoing macroeconomic adjustment program, with a special emphasis on reforming the transport sector. The objectives of the reform were to: (a) reduce the cost of transport; (b) strengthen sector management including investment and maintenance programming capacity; (c) privatize the execution of works or provision of services in the sector to the extent possible; and (d) restructure remaining parastatals in the sector, which were expected to be run as conmnercial enterprises, without requiring public subsidies. Previous Bank involvement in the sector. Between 1966 and 1987, the Bank supported the development of the Senegal's transport sector through 15 operations, including 6 highway, 4 railway, 3 port and 2 aviation projects. In its country assistance review for the 1960-87 period, OED concluded that the Bank's strategy in the transport sector had been sound. Its main features were as valid in the late 1980s as they were in the mid-1960s, when they were initially formulated. The strategy focused on sound investment planning, priority to maintenance, and emphasis on economy and efficiency. Project performance was satisfactory in highways, but poor in railways. The port and aviation projects contributed to improving facilities, but traffic declined, as Dakar lost its role in the region and as a stop over from Europe to South America. Lessons from experience included the need to approach institutional change gradually, as was done for road maintenance, and defer lending when the government commitment or capability to implement reform was uncertain. The adjustment process. The transport sector operation was designed to support implementation of Senegal's adjustment program, which had been initiated in 1980. Four SALs had been extended by the Bank in support of the program. The objective of SAL IV, which was approved in January 1990, was to help restore Senegal's competitive position through reforming the tax system, reducing labor rigidities, improving the quality of public expenditure, and rationalizing the public enterprise sector. The achievements of SAL IV fell short of objectives, however. The macroeconomic framework deteriorated significantly in 1992 and 1993, and several reforms were not implemented, including reducing the wage bill and reforming the Labor Code. On the other hand, good progress was achieved in reducing subsidies to public enterprises. In 1986, the Government and the Bank reached agreement on the need for reform in the transport sector in three main areas: (i) imnproved investment planning in the sector with a target of at least 80 percent of sector expenditures earmarked for infrastructure rehabilitation and maintenance, and a major emphasis on repairing the dilapidated highway network; (ii) increased mobilization of resources from the sector through improved efficiency, cost control and revised tariff policies in the railway and port subsectors; and (iii) strengthened sector management through a series of institutional reforms, including revising the legal status and increasing the autonomy of the port, railway and civil aviation parastatals. The transport sector operation was designed to help the Government implement these reforms 3.2 Revised Objective: Not Applicable 3.3 Original Components: The transport sector operation covered the priority areas of the Government's FY91-FY95 sector expenditure program. It included an adjustment and an investment - 2 - component. The adjustment component sought to ensure that: (a) resource allocation for road maintenance would be sufficient to cover essential requirements; (b) a new railway company would be established on a sound financial basis; and (c) financial and operating targets for parastatals in the sector would be met. The adjustment component was to be disbursed in three tranches. Tranche release conditions included adequate funding for road maintenance, timely payment of invoices to contractors, and achieving agreed financial and operating targets for the railway company (SNCS), the port of Dakar (PAD), and the airline company (Air Senegal). Implementation of a 10 percent tariff increase by SNCS was a condition of credit effectiveness. Introduction of a revised tariff structure by PAD was a condition of second tranche release. Finally, agreement and initial implementation of an action plan for ASECNA-Senegal, the public agency in charge of the management of airports and air navigation facilities, was a condition of third tranche release. The investment component focused almost exclusively on rehabilitation and maintenance of existing transport infrastructure. Subprojects were identified in the Government's FY91-FY95 transport sector investment and expenditure program, including 22 in the road sub-sector, 25 in the rail sub-sector, 17 in the port sub-sector and 12 in the aviation sub-sector. The main features of this program included: (a) in the road sub-sector, the strengthening of about 860 km of badly deteriorated paved roads, periodic maintenance of 2065 km of paved and 1300 km of gravel roads, and routine maintenance on some 9000 km of the network; (b) in the rail sub-sector, the intensive maintenance of 180 km of track, the replacement of rolling stock, and spare parts and equipment for maintenance; (c) in the port sub-sector, the construction of an access road to the recently opened container terminal, and rehabilitation of over-aged utility networks; and (d) in the aviation sub-sector, the rehabilitation of runways in secondary airports, and navigation equipment at selected airports. All investment components included technical assistance to strengthen sector agencies, training and consulting services for works supervision and studies. 3.4 Revised Components: A few discrete investments were added to the project in the final years of its implementation. 3.5 Quality at Entry: The quality at entry of the transport sector operation is rated satisfactory. The operation was fully consistent with the country assistance strategy, which emphasized the need to improve the incentives system and promote a sustainable level of long-term growth. As a member of the CFA franc zone, it was not possible for Senegal to change unilaterally its nominal exchange rate, as a means to increase its external competitiveness. Accordingly, the strategy sought to reduce production costs, including in the transport sector. The project was obviously among the priorities of the Government as demonstrated by the highly satisfactory rating for project preparation by the Borrower. The operation was an integral part of the Government's expenditure program for the sector, which was co-financed by 12 donors, including IDA. The operation met the Bank safeguard policies when it was approved. It included - 3 - rehabilitation of existing infrastructure, which minimized risks of deforestation or property disturbance. The construction of a paved road funded by other financiers raised environmental concerns because it was expected to pass through a national park, which had been declared a World Heritage Site by UNESCO. A thorough investigation of the environmental impact of this project and a study on an alternative route around the park were undertaken. The measures proposed as a result were found appropriate by IDA and UNESCO. However, there was no attempt under the operation to reinforce the capacity of Senegal to manage and monitor environmental issues in its transport sector. Requirements for strengthening capacity building were identified during the preparation of the Second Transport Sector Project which is currently implementing it. The use of a hybrid format was acdequate to address the most important sector issues while providing parallel support to the investment budget. APLs did not exist at the time the project was prepared. The operation was designed as an hybrid with an adjustment and an investment component, for several reasons. First, loading SAL operations with a variety of sector reforms was deemed counterproductive, as it would risk derailing the macro adjustment process if one sectoral issue could not be resolved. Se3ond, under past projects in the sector, the Government had a tendency to focus on infrastructure construction at the expense of policy reform; policy measures attached to investment projects through covenants had not been particularly successful. Third, combining adjustment and investrment in one operation resulted in getting the attention of top decision makers to the critical sectoral reforms, beyond the technical ministries concerned. Finally, past experience under IDA credits showed that the Government did not fully fund road maintenance, once external funding was nIo longer available. By making adequate budget funding for road maintenance a condition for the release of each of the three tranches, it was expected that the Government would establish and mainitain thereafter good practices. Benefits were described in general terms. The majority of investment subprojects was estimated to have a rate of return ranging from 15 to 85 percent. Transport costs were expected to be substantially reduced, but without any indication on how much for each mode. The project was also expected to generate employment, including 3200 unskilled construction workers, 800 skilled operators and drivers, and 800 workers in ancillary maintenance tasks. Operating and financial objectives were specified for the sector parastatals, and achieving them was a condition of second and third tranche release. As was the case in the late 1980s - early 1990s when the project was prepared, the SAR did not include a clear set of performance indicators to measure outcomes. The assumptions regarding the project risks were reasonable. The main risk foreseen was the inability of the Government to live up to its financial commitments. The road rehabilitation program implied a tripling of its annual budget allocations for maintenance, which was clearly a challenge. Adjusting tariffs and compensating transport companies for losses occasioned by the provision of social services, particular]y in the railway and aviation sub-sectors, had been considerably delayed in the past. Substantial progress had been made during the preparation of the transport sector operation on those aspects, and it was expected that the hybrid nature of the credit would help the Government maintain the momentum. Also, the conditionalities of SAL IV and of the transport sector operation would be mutually reinforcing. The risks were significant in -4 - view of past experience, but were considered worth taking. 4. Achievement of Objective and Outputs 4.1 Outcome/achievement of objective: The outcome is rated satisfactory. All measures included in the adjustment component of the project were implemented. Although the conditionality related to the privatization of Air Senegal had to be waived, the company was eventually privatized at the end of the project in 1999. The reform program sought to strengthen sector management and performance, by focusing the role of Government on investment and maintenance programming, and privatizing the execution of works and the provision of services. Two outcome indicators out of four (see Annex 1) were satisfactorily met: running of private enterprises as commercial enterprises and privatization of the execution of civil works. Although the third outcome indicator (reduction of transport costs) was not monitored during project execution, it is expected that the costs were reduced on the paved network due to the length of the road network rehabilitated or maintained and the increase in resources allocated to road maintenance compared to the situation before the project was implemented. However, transport costs on the unpaved network are expected to have increased due to the lack of external resources for periodic maintenance or rehabilitation of the roads and the resulting deterioration of the road condition. Strengthening of sector management, which was the fourth indicator, has been modest. The Government decision not to subsidize public enterprises any more, had a positive impact on the management of these enterprises, making them more commercially oriented. In the Department of Public Works, privatization of road maintenance forced the department to identify much earlier in the budgetary process a program of works in order to launch tenders and award contracts and execute works within the budgetary year. This was not the case before the project started, when maintenance was executed by force account and works were decided on a day-to-day basis based on an overall budgetary envelop. The backlog of road maintenance has been reduced. Road maintenance and rehabilitation works are now fully carried out by private contractors. Economic criteria for project selection have been introduced. The ratio of funds use in the road sub-sector of 75 percent for maintenance and 25 percent for new works has been adhered to. Budget allocations to the Road Fund have steadily increased in past years, from CFAF 4.5 billion in 1993 to CFAF 13 billion in 1998 and CFAF 15 billion in 1999. However, this amount is still short of requirements for road maintenance, estimated at CFAF 20 to 25 billion per annum and external financing is still needed. Moreover, actual disbursements in 1998 and 1999 were CFAF 11.2 and 13.4 billion respectively, of which over CFAF 1 billion to cover administrative cost. Delays in paying invoices to contractors, which had been considerably reduced, have resurfaced in recent years. The 3-month limit specified in the program is now more the exception than the rule. The performance of public sector enterprises in the rail, port and aviation sub-sectors has improved. They have been granted full autonomy and have met the operational and financial targets set forth as conditions of tranche release in the adjustment component of the operation. They operate on commercial principles and no longer receive operating subsidies from the - 5 - Government, except for Air Senegal. The company was privatized in 1999 and is now expected to operate without subsidies. Improvement in management of the railway company has not been sufficient however, to ensure its long-term viability and the company is being privatized with completion of the privatization process expected by the end of 2000. Efforts were made to establish reliable management systems and databases in the road, rail and port sub-sectors, through extensive use of long term technical assistance. There has been inadequate attention, however, to the btaining of. Senegalese technicians, with the result that capacity remains weak. The capacity of the Directorate in charge of programming and supervising road works did not improve as expected, and the operation of the Road Fund lacks transparency. 4.2 Outputs by components: Road sub-sector. Actual strengthening of paved roads slightly exceeded original targets (911 km against 860 km), but periodic maintenance was much below the targets (478 km of paved roads against 2,065km; 367 km of unpaved roads against 1,300 km). The quality of works has been poor in many cases, as pointed out in a technical audit carried out in April 2000. Accordingly, the official estimate that 60 percent of the paved road network is in good condition today, against 35 percent in 1991, should be taken with caution. The unpaved road network has further deteriorated. Routine maintenance of 9,000 km is now fully carried out by private contractors, but work supervision is weak. The lo-wer output can be explained by lack of external funds (12.5% of the program was unfunded when the program was approved and remained unfunded, some donors provided their funds with delays due to the poor macroeconomic performance until the 1994 CFA devaluation). An other reason is the higher cost of works than expected due to delays between appraisal and the actual execution of the works and the deterioration of the roads in the meanwhile. Railway sub-sector. The rail telecommunication system has been upgraded and modem locomotives have been acquired (with C'anadian financing). Maintenance of infrastructure and equipment has significantly improved. Equipment for computerizing operations has been provided. On the other hand, the badly deteriorated Tambacounda-Kidira section of the railroad system (about 180 km) has not been rehabilitated due to the withdrawal of a bilateral financier, which was expected to provide about half of the funds of the railway component of the program. IDA funds were reallocated to finance the rehabilitation of nearly 25 km of the Tamba-Kidira section. Traffic on the Dakar to Bamako railroad is often interrupted because of serious infrastructure problems. In 1999 traffic was interrupted for a total of 41 days, of which 35 days due to incidents on the Malian side. A performance contract was signed between the Govermnent and SNCS, the railway company, in 1989, and again in 1996. A redundancy program has been implemented reducing the number of staff from 2167 in 1993 to 1648 in 1997. As a result, the wage bill as a share of revenue declined to under 31 percent in 1995, compared to 56 percent in 1993. Two loss-making passenger services were discontinued (Tivaouane-St. Louis and Ginguineo-Kaolack). Traffic has declined in the past five years, however, raising serious doubts as to the ability of the public company to turn the situation around .md justifying the privatization option which is being - 6 - implemented. Port sub-sector. The access road and the rehabilitation of utility networks for the port of Dakar have been completed. A number of studies have also been carried out to improve its management. Tariffs have been adjusted in 1993, and again in 1995 to take account of the devaluation of the CFA franc. Traffic has increased by 34 percent between 1991 and 1999. Aviation sub-sector. The program of works and equipment, including additional items in the revised project composition, have been completed. What remains to be done to improve safety and traffic handling capacity was identified at the end of the project and a program of action is now being implemented with support from the Bank, AFD and the US Federal Aviation Administration. The national airline company was privatized in 1999. Privatization of airport management is being discussed by donors with the Government. Passenger traffic at Dakar airport has increased by 26 percent from 1991 to 1999, and freight volume by 4 percent. 4.3 Net Present Value/Economic rate of return: The SAR estimated that the economic rates of return (ERRs) for the subprojects would range from 15 to 85 percent, based on the standard user cost-savings methodology, but did not provide any details on the economic evaluation. The basic data were not found in the archives. Because insufficient attention was paid to monitoring the project impact during its execution, no comprehensive traffic data were collected to measure the actual economic impact of the road component of the project. Traffic on a sample of roads maintained with external financing are given in Annex 3. Between 1989 and 1996, traffic has increased in a range of 50 percent to 100 percent on most roads. Traffic decreased on seven sections, which should be investigated. The changes in the economy resulting from the CFA devaluation make it also difficult to estimate the economic impact of the project separately. Annex 10 provides data on traffic in the port, civil aviation and railway subsectors. Railway traffic was decreasing during the 1991-1994 period. The 1994 devaluation had a positive impact with a 23% traffic increase between 1994 and 1995. However, the deterioration of the track and competition with the road or other corridors have resulted in a reduction of traffic of about 16 percent between 1995 and 1999. Port traffic which was decreasing between 1991 and 1994 because of the weak macroeconomic performance started to increase again after the CFA devaluation. This trend has maintained until 1999 with a total 44 percent increase since 1994. A similar trend can be found for passenger traffic at the airport of Dakar with a total 38 percent increase between 1994 and 1998. 4.4 Financial rate of return: For the same reasons explained above, a financial rate of return could not be calculated. Annex 10 of the report and the PAD of the second transport sector project provide data on the financial performance of the transport sector public enterprises. Revenues of the railway company remained constant from 1991 until the devaluation. They increased by about 20 percent after the devaluation and have remained constant since then. The net income has increased by about 50 percent since the devaluation although the traffic has - 7 - decreased by about 8 percent. Earnings before depreciation, interests and taxes (EBIT) have gone from a negative 13% in 1993 to a positive 13% in 1997. Similarly, net revenues have gone from a net loss representing 5% of revenues to a net profit of 5% during the same period. The revenues of the port of Dakar were decreasing before the devaluation which reversed the trend. Increase in revenues has not foi.low increase in traffic which reflects the port carefulness to keep tariff at a competitive level with other regional ports such as Conakry in Guinea or Abidjan in C6te d'Ivoire. The wage bill remains an issue as it tends to increase continuously, however. Overall the financial situation of the port improved under the program. Revenues increased as well as earnings before depreciation, interest and taxes (EBIT) from 27% to 34%. Net income compared to revenues improved from 4% in 1993 to 9% in 1997. The liquidity position also improved with the current ratio increasing from 1.1 to 2.1 over the same period. The debt-equity ratio decreased from 34% in 1993 to a low 23% in 1994 but increased again to 29% in 1997. Although air traffic has steadily increased since 1994, the financial situation of the airport management company has remained weak and is expected to remain as such according to the financial analysis carried out during the preparation of the second transport sector project. Privatization of airport management is expected to address this weakness. 4.5 Institutional development impact. The institutional development irapact of the project in the road sub-sector is modest. Sector management and planning remains weak. Instruments have been developed for road maintenance planning, but they are not being used efficiently. The Road Fund continues to finance activities that are unrelated to rnaintenance. Procedures are not transparent and work supervision is not up to standards. A training center for both administration staff and small contractors was to be restructured as a condition of disbursement for the road component. Technical assistance has been provided, but the center has failed to increase the capacity of small contractors or administration staff. Institutional development in the other sub-sectors has been substantial. The performance of sector enterprises and agencies has improved. They operate now according to normal business practices and are more efficient than was the case before program implementation. New management tools and computerization have been introduced and successfully transferred to staff. 5. Major Factors Affecting Implementation and Outcome 5.1 Factors outside the control of government or implementing agency: The macroeconomic situation deteriorated significantly in 1992 and 1993 as a result of a decline in the terms of trade, the over-evaluation of the currency, and the return of poor weather. Real GDP declined, the current account cLeficit increased, and the overall fiscal deficit, which had disappeared in 1991, increased to 4 percent of GDP. The authorities took steps to restore the fiscal balance, including a 15 percent reduction of the civil service payroll and removal of subsidies to public enterprises, but these measures fell short of the adjustment needed to correct growing internal and external imbalances. As a result, counterpart funding lacked for the road -8 - component, which caused delays in program implementation. Reduced economic activity resulted in lower revenues for all public enterprises operating in the transport sector, which, in turn, led to delays in implementing their restructuring plans. In addition, political unrest in the Casamance region in 1991 and 1992, and the effects of the Gulf war in 1991 led to the closure of most tourist hotels, with serious consequences for Air Senegal. The performance contract could no longer be implemented, and was suspended. Following the devaluation of the CFA franc in January 1994, traffic growth resumed, but the company was affected by two plane accidents in 1996-97, which severely curtailed its ability to operate. Political issues impacted negatively on the program. In 1991, a coalition government took office. It was more interested, however, in power sharing opportunities than in economic reform. Presidential elections in February 1993 affected implementation of the structural adjustment program, including its transport component. The program went off-track, the third tranche of SAL IV was canceled, and the credit closed. Interference in the management of parastatals, which had been significantly curtailed in 1990, became a serious problem again. Mobilizing donor support for the financing of the transport sector program took longer than initially envisaged. Support from one bilateral donor did not materialize, which delayed the rehabilitation of the Tambacounda-Kidira section of the railroad from Dakar to Bamako and postponed efficiency and security gains, which are essential for an increase in traffic on that route. Privatization of the international operation of the railways has been delayed for lack of agreement between the Governments of Senegal and Mali on the capital structure of the company to be created. 5.2 Factors generally subject to government control: Credit effectiveness was much delayed. It took almost 8 months after Board approval for the Borrower to meet all conditions for effectiveness. There were 9 special conditions of effectiveness. Publication of the decree providing for streamlined procurement and payment procedures for small road maintenance contracts took much longer than expected. The large fiscal imbalances in the early years of the credit led to accumulation of arrears, and suspension of disbursements from several sources, which in turn interrupted work implementation. Throughout program implementation, resources for implementing agencies to cover operating costs were much below requirements, making it difficult to operate efficiently and to build up capacity to replace long term technical assistance. The devaluation of the CFA franc in January 1994 had a negative impact on a nlumber of public enterprises in the non-tradable sector, including SNCS, PAD and Air Senegal. These enterprises suffered as imported input costs rose and reduced domestic demand, together with a temporary control on prices, led to pressure on revenues. This in turn delayed their ability to meet the targets set in their performance contracts, which were conditions for second and third tranche release. All conditions for second tranche release were met in late 1994, almost two years behind schedule, with the exception of that pertaining to Air Senegal. Again, conditions for third tranche release were met by the end of 1995, with the same exception. The Air Senegal -9- performance contract was suspended in 1992. Audits in 1994 recommended that the company be privatized. Taking account of the (Government decision to privatize, Bank management recommended to the Board that the conditions pertaining to Air Senegal be waived. The two tranches were released in November 1996. 5.3 Factors generally subject to implementing agency control: Implementing agencies did not establish adequate procedures for implementing and monitoring the project early on, making coordination of program implementation difficult. Decision-making was generally slow. The poor political and economic environment, which prevailed during the early years of the project, was not conducive to discipline and improved performance by public agencies and enterprises involved program implementation. 5.4 Costs andfinancing: The credit took much longer to disburse than initially envisaged. Only after the 1994 devaluation of the CFA franc did the macroeconomic framework become conducive to implementing the improvements sought in the management and performance of public enterprises in the sector. The second and third tranches were released in November 1996 only, three and two years respectively behind schedule. Disbursements for the investment component were also much delayed. The lack of a procedure manual was a major constraint for program implementation. The initial closing date of the credit was December 31, 1997, but the SAR expected disbursements to be completed by end-June 1996. Actually, by that date, only one half of the credit had been disbursed. By the initial closing date, the adjustment component was fully disbursed, but about 25 percent of the investment component of the credit remained to be disbursed. 6. Sustainability 6.1 Rationale for sustainability rating: Overall, the sustainability is ratecl likely. This is justified by the continuous effort made under the follow-up operation, the Second Transport Sector Project, to improve the sector institutional framework in order to ensure better sector management and resource allocation. Measures to be taken under the Second Transport Sector Project include the creation of a Road Agency which will manage road maintenance. The agency will be staffed with private personnel and managed under commercial rules. It will be under the supervision of a Road Board with a majority of private stakeholders. The Ministry of Equipment will have a regulatory role of defining policies and ensuring that the objectives given to the agency are reached and that the performance indicators are met. Funds for road maintenance will still come from the budget but will be managed by a Road Fund Agency with a similar private-type statute as that of the Road Agency. The Fund will also be under the supervision of the Road Board. Under the programn, the Government has provided resources for road maintenance at a level, which has increased over past years, but is still not sufficient to cover requirements for - 10- routine and periodic maintenance. Taking account of past experience in Senegal and other countries, there is always the risk that budget allocations may be lower than expected, and availability of resources untimely. This risk is modest, however, as long as the donor community continues to support the sector. The Government has agreed to consider the creation of a second-generation Road Fund, replenished with resources collected directly from users and deposited in a bank account, if the budget is no more able to provide enough resources for road maintenance. The sustainability of the port and aviation components is likely. Public enterprises in the transport sector in Senegal, with the exception of Air Senegal, operate now without subsidies. They have the capacity to maintain the infrastructure and equipment provided under the project. Government interference in their management is much less an issue now than at the early stages of program implementation. On the other hand, they continue to suffer from a slow government decision-making process and delays in being compensated for public service obligations. Moreover, their ability to finance investment out of retained earnings is limited. Privatization of airport management and of the container terminal should enhance the sustainability of investment in these two sub-sectors. The Second Transport Sector Project provides support to this privatization. To ensure sustainability of the railway component, privatization of the Dakar to Bamako operations needs to be completed rapidly. The company is not in a position to reverse the recent deterioration in performance without external support. The privatization is supported by the most important donors in the sector (IDA, AFD, BOAD) under the second transport sector project. Successful privatization of the company is a condition for Bank financing of the rehabilitation of the most deteriorated section of the railway track. 6.2 Transition arrangement to regular operations: A follow-up project was approved in March 1999. It seeks to build upon the achievements of the past operation and correct remaining deficiencies. A three-year rolling road maintenance and rehabilitation program has been prepared. Rehabilitation of the unpaved road network is included in the new program. An autonomous entity will be established to replace the Directorate of Public Works and manage road maintenance. A Road Fund Agency will be established under the supervision of a Road Board with a majority of stakeholders to ensure that it is run along well defined technical, accounting, and financial management criteria. Privatization of the international rail service between Dakar and Bamako is underway, which entails a changing role for SNCS. A new corporate strategy has been prepared. Further staff redundancies are expected and will be financed under the new project. Privatization of Air Senegal is completed. Under the new project, airport management will also be privatized. In the port sub-sector, policy changes are being made to encourage private operators to increase the supply of river transport and coastal shipping services. The debt of public enterprises in the sector will be restructured to enable them to operate satisfactorily. Several agencies are expected to collect data and monitor performance indicators. In the log-frame for the new project, however, these indicators are insufficiently quantified. This will - 1 1 - make it difficult to ascertain progress in meeting the development objectives. It would be advisable to establish a focal point that would systematically collect information on transport supply and cost, make comparisons with competitors inside and outside the region, and widely disseminate conclusions. The Government has agreed to this recommendation and is preparing its implementation. 7. Bank and Borrower Performance Bank 7. 1 Lending: The performance of the Bank in the preparation and appraisal of the project is rated satisfactory. Taking account of past experience in the sector, the Bank helped Senegal prepare a broad and ambitious program emphasizing rehabilitation of infrastructure and reform of sector policies and institutions. The Bank took tae leadership in the donor community and succeeded in building a consensus on the reform and investment program. This was a remarkable achievement, given past tendency of donors to finance construction of new infrastructure without giving enough consideration to maintenance. The comprehensive approach resulted in a complex project, which was difficult to manage, as it involved a large number of local agencies and donor organizations. This was the price to pay, however, to give momentum to a long overdue reform program. If the Bank had continued randomly funding individual projects in each sub-sector, it is likely that the reform program would not have been carried out. To make it work, the Bank put considerable emphasis on up-front actions, including institutional changes that increase the railway company and the port agency autonomy. Insufficient attention was given, however to implementation arrangements for a complex operation. A coordination unit was set up) in the Ministry of Public Works, but it had difficulty working with agencies under the supervision of other ministries. At the end of the project and for the preparation of the follow-up operation, the coordination unit was relocated in the Prime Minister's office but moved back to the Ministry of Transport when the three ministries with transport departmnents were merged following the nomination of a new government after the February 2000 elections. The absence of a procedure manual was also a serious constraint to smooth project implementation. Again, this problem has been corrected under the new project. 7.2 Supervision: Supervision is rated satisfactory. There was continuity in Bank teams. Supervision missions visited Senegal about twice a year. During project execution, the Bank was able to ensure continuity and consistency in the dialogue on policy or implementation issues although ups and downs did not create an easy environment. On the broad period covering the project execution, and preparation and launch of the second operation, the overall trend with respect to institutional or physical activities in the sector, is positive and the Bank can be commended for having a significant role vis-a-vis such achievement. Implementation of the adjustment component was difficult at the start of the project bu: was eventually successful. At the same time, physical implementation of the project became difficult and the workshops with the stakeholders have shown that these issues remained unadressed during project execution. However, the Bank managed to reach an agreement with the Government on the measures necessary to address these - 12 - implementation issues, especially in the road maintenance sector and include these measures in the follow-up transport operation. 7.3 Overall Bank performance: Overall, Bank performance is rated satisfactory. Borrower 7.4 Preparation: Preparation. The performance of the Government and public agencies concerned in preparing the operation was highly satisfactory. There was a consensus on main issues to be addressed under the operation. Detailed action plans were prepared for translating policy changes into reality. 7.5 Government implementation performance: As indicated earlier, the performance of the Government was highly unsatisfactory in the early years of project implementation. Counterpart funding was not available and Government interfered in the management of public enterprises. After the devaluation of the CFA franc in January 1994, the performance of the Government steadily improved, however. Good progress was made in the investment and adjustment components of the operation. Weaknesses remained, however, mainly in the staffing and funding of public agencies in charge of sector planning and management, and in the functioning of the Road Fund. Also, long-term technical assistance was not adequately used to strengthen local capacity. 7.6 Implementing Agency: The performance of the public enterprises in charge of sub-sector components has improved over program implementation. They are now much better equipped to implement more complex productivity-enhancement programs. The performance of a number of small contractors involved in road maintenance has not been satisfactory. This had been expected, and a training program had been designed, but poorly implemented. 7.7 Overall Borrower performance: Overall, the performance of the Government is rated satisfactory. 8. Lessons Learned Although it would be difficult to apply the lessons from this program to the entire transport sector program approach, it is recommended that a much closer look be given to the achievements of these sector programs, their benefits, strengths and weaknesses. Based on the experience in Senegal and other countries, sector programs are long and costly to prepare (often more than five years and more than one million dollars from the Bank budget without counting resources from trust funds and PPFs). Their focus is on policy reform and overall the objective of reforming the transport sector is achieved. However, if policy dialogue is strong during program preparation, the emphasis is put on implementing the investment component after the program - 13 - starts. The logical framework put in place during program preparation also disappears, with key ministries on policy dialogue and reform such as the Ministry of Economy and Finance playing a much lesser role. Donor coordination weakens as donors focus more on implementing their own component in the program. Policy dialogue starts again as soon as preparation of a follow-up program starts. Therefore, there is a need for a mechanism to ensure a continuity at a more constant level in the analysis of sector efficiency, performance, issues and reforms. This supposes more ownership at the government level as well as building local capacity to carry out this analysis. The transport sector program approach has proved to be not flexible enough. Discussions during preparation stage of the project tend to limit to sector issues. They were relevant at the time, but later on issues that are no longer relevant cannot be discarded and new issues cannot be taken in consideration. There is a need to consider what investments are essential and for which the decision for their financing and execution should not be linked to an agreement to policy reforms. Preparation of the investment component of transport programs suffers from the emphasis put on policy dialogue. If an agreement on policy reforms is a condition for executing the investment program and if reaching such agreement takes several years, it is very difficult to ensure readiness of implementation of policy reforms and execution of the investment program at the same time. Either an investment program is prepared but if the agreement on policy reforms comes later, the program becomes obsolete and has to be revised, or all efforts are concentrated on preparing policy reforms and when an agreement is reached, the investment program is not ready to be implemented. There is an additional cost for the economy, in terms of additional costs of investments and sector efficiency loss, when investments have to be postponed and transport infrastructure cannot maintained/rehabilitated/upgraded when needed. Preparation of investment programs within transport sector programs should be better integrated in the process of preparing annual public expenditure programs. Very often, a comprehensive investment program is defined as part of a transport sector program. This investment program covers a certain number of years but is rarely revised and in particular almost never updated, after a certain number of years has passed, to include the equivalent number of years to come. Assumptions regarding availability of financing should be more realistic. Very often, when a program is agreed, many donors have only expressed an interest in participating in the program, but no firm commitment. The program scope and its objectives should be reviewed annually and revised if necessary to reflect changes in availability of resources. An hybrid operation may be an adequate format when a large agenda of unresolved issues in the sector needs to be addressed. However, the timetable for implementing reforms needs to be tailored to the Government commitment and capacity to implement reforms. These need to be carefully assessed before starting the operation. Before deciding on a hybrid format, the question should be answered whether the most critical adjustment measures should not be better placed in a structural adjustment operation. If a hybrid format is chosen, the chance of success is greater if - 14 - the adjustment measures are also supported under a structural adjustment operation. Refonn and program objectives need to be consistent with the macroeconomic framework. The project sought to improve the performance of the transport sector as a means to enhance Senegal's competitiveness. In the absence of a devaluation, however, efforts at cost cutting, while indispensable, would not have been sufficient to restore economic competitiveness. As a consequence, the government may have considered that these efforts were not worth their political cost and did not push for implementing the reforms. As a result, performance in project implementation was highly unsatisfactory before the 1994 devaluation, but improved thereafter when the benefits of the reforms were considered important enough. Enough budget should be granted for program supervision by the Bank. Bank management tends to consider that supervising a program does not require much more resources than for supervising a standard investment operation. However, program supervision includes expertise in a lot more domains (sectoral but also cross-sectoral as well as fiduciary). If resources are not available, Bank involvement should be much more selective and expectations regarding Bank involvement in the sector should be revised accordingly. Technical assistance is not a substitute for weak government commitment to reform, and is not effective when the incentives framework is inadequate. The project put far too much emphasis on technical assistance, and not enough on training and capacity building. A strong administration is required to contract out and supervise implementation of a large program of road rehabilitation and maintenance. This was not the case under the project and, as a result, the establishment of an autonomous road agency is under consideration to correct this issue. The competitiveness of Senegal's transport sector is crucial for continued economic growth. A set of indicators should be developed and continuously monitored to ensure that Senegal does its best efforts to emulate the best performers worldwide. Being marginally better than the weak performers is not an option for a resource-poor country like Senegal. More attention should be paid to the definition of project objectives and performance indicators which allow to measure whether these objectives are achieved or not. An objective such as strengthening capacity is much too general and very difficult to monitor. A procedure to ernsure that these indicators are collected should be put in place before the program starts. Measuring performance also supposes that the value of the indicators are known at the beginning of the project. A set of key indicators needs to be defined based on which performance is assessed. Defining too many indicators, and the transport sector provides an ample number of them, is useless as it is impossible to assess objectively project performance when some performance targets are met and some are not. Other valuable lessons can be drawn from the Stakeholder Workshop Results (Annex 9). - 15 - 9. Partner Comments (a) Borrower/implementing agency: The Government prepared a thorough Implementation Completion Report in 1999 available in the project files. (b) Cofinanciers: Agence Francaise de Developpement (French Development Agency) indicated that it did not have comments on the draft ICR. Other cofinanciers did not provide comments. (c) Other partners (NGOs/private sector): 10. Additional Information - 16 - Annex 1. Key Performance IndicatorsALog Frame Matrix Outcome/Impact Indicator Projected in SAR/PAD Actual/Latest Estimate Public enterprises in sector run No more subsidies Subsidies have been as commercial enterprises discontinued, except for Air Senegal Reduce cost of transport No indicator in SAR No monitoring system in place Execution of works and Road maintenance works Road maintenance works are provision of services privatized contracted out now fully contracted out to the extent possible Sector management Capacity to plan investment and Modest capacity developed strengthened maintenance in place Output Indicators Indicator Projected in SAR/PAD Actual/Latest Estimate Roads Network rehabilitated and 860 km of paved road 911 km of paved roads maintained strengthened strengthened, but quality of works uneven Periodic maintenance of 2065 478 km of paved roads and 367 km of paved and 1300 km of km of unpaved roads unpaved roads Routine maintenance of 9000 Routine maintenance in place, km of roads but covers only one third of requirements Capacity to plan and manage Tools in place Capacity to plan and manage sector in place sector has remained weak Payment to contractors Reduce payment delays to less Payment delays are on average than 3 months much longer than 3 months - 17 - Railways Infrastructure rehabilitated and Rehabilitation and upgrading of Telecommunications and maintenance upgraded infrastructure and equipment locomotives upgraded, but 180 km of railroad not rehabilitated Company run as a commercial Implementation of performance Performance criteria met; entity contract subsidies discontinued, but traffic is declining Port Infrastructure rehabilitated Access road built and utilities Physical investment made rehabilitated Port of Dakar run as Implementation of performance Perfornance criteria met commercial entity contract Civil aviation Infrastructure and equipment Runways rehabilitated and Works completed and most upgraded equipment upgraded equipment procured Action plan for ASECNA Action plan agreed Action plan agreed Performance contract for Air Performance contract Criteria not met, but Senegal implemented privatization underway - 18 - Annex 2. Project Costs and Financing Appraisal Actual/Latest Percentage of Project Cost by Component Estimate Estimate Appraisal US $million I. INVESTMENT COMPONENT Road Component 345.5 216.2 62.6% Railway Component 67.5 59.6 88.3% Port Component 33.0 26.3 79.7% Aviation Component 18.0 13.3 73.9% Project Unit 0.0 1.4 Total Base Cost 464.0 316.8 68.3% Contingencies 119.0 TOTAL INVESTMENT COMPONENT 583.0 316.8 54.3%/ II. ADJUSTMENT COMPONENT 20.0 20.0 100.0% III. PROJECT PREPARATION FACILITY 1.5 0.0% | TOTAL PROJECT COST 604.51 336.8 55.71 Appraisal | Actual/Latest Percentage of Project Cost by Component Estimate I Estimate - Appraisal US $m illion I. IVSMENT (OMPfNENT Road Component 345.5 270.2 62.60% Railway Component 67.5 59.6 88.30% Port Component 33.0 26.3 79.70% Aviation Component 18.0 13.3 73.90% Project Unit 0.0 1.4 Total Base Cost 464.0 3708 68.30% Contingencies 119.0 TOTAL INVESTMENT COMPONENT 583.0 370.8 54.30% II. AnJ!lISTMENT COMPnONEN-T 20.0 20.0 100% III. PRflrCT PREPARATION EACIITTY 1.5 1.5 100% TOTAL PROJECT COST 1 604.51 392.31 64.90%1 The difference between estimate at appraisal and actual can be explained by several reasons: - US$75 million were unfunded at appraisal and remained unfunded. - Some donors did not provide the amount of resources expected at appraisal. This was particularly the case for the railway component where a donor which was supposed to provide about half of the financing withdrew and had to be partially replaced by IDA. - Actual data do not include the contribution of public enterprises as it was the case in the appraisal estimate. - 19- Project Costs by Procurement Arrangements (Appraisal Estimate) (US$ equivalent) Expenditure Category _Procurement Method 1/2 _________________ _ IC( IC NCB OTHER 21 TOTAL Road Component 22.6 (22.61 63.9 (8.3) 359.6 (9.5) 446.1 (40.4) Civil Works 22.6 (22.6) 59.8 (8.3) 346.6 (0.0) 429.0 (30.9) Equipment & Materials 0.0 (0.0) 4.1 (0.0) (0.0) (0.0) 4.1 (0.0) Cons. Services, Technical Assistance & Training 0.0 (0.0) 0.0 (0.0) 13.0 (9.5) 13.0 (9.5) Railway Component 0.0 0.0 5.5 (4.7) 72.4 (1.9) 77.9 (6.6) Civil Works (incl. ballast for track rehabilitation) 0.0 (0.0) 5.2 (4.4) 40.8 (0.0) 46.0 (4.4) Equipment & Materials 0.0 (0.0) 0.3 (0.3) 19.1 (0.0) 19.4 (0.3) Cons. Services, Technical Assistance & Training 0.0 (0.0) 0.0 (0.0) 12.5 (1.9) 12.5 (1.9) Port Component 0.0 0.0 0.0 0.0 38.4 (0.7) 38.4 (0.7) Civil Works 0.0 (0.0.0 .0 (0.0) 28.0 (0.0) 28.0 0.0 Equipment & Materials 0.0 (0.0) 0.0 (0.0) 5.9 (0.0) 5.9 0.0 Cons. Services, Technical Assistance & Training 0.0 (0.0) 0.0 (0.0) 4.5 (0.7) 4.5 (0.7) Aviation Component 0.0 0.0 0.0 0.0 20.6 (0.9) 20.6 (0.9) Civil Works 0.0 (0.0) 0.0 (0.0) 14.1 (0.0) 14.1 0.0 Equipment & Materials 0.0 (0.0) 0.0 (0.0) 5.6 (0.0) 5.6 0.0 Cons. Services, Technical Assistance & Training 0.0 (0.0) 0.0 (0.0) 0.9 (0.9) 0.9 (0.9) Total Investment Componen 22.6 J22.6) 69.4 (13.0) 491.0 (12.9) 583.0 (48.5) Civil Works 22.6 (22.6) 65.0 (12.7) 429.5 0.0 517.1 (35.3) Equipment & Materials 0.0 0.0 4.4 (0.3) 30.6 0.0 35.0 (0.3) Cons. Services, Technical Assistance & Training 0.0 0.0 0.0 0.0 30.9 (12.9) 30.9 (12.9) Adiustment Component 3' 20.0 (15.0) TOTAL PROJECT COST 603.0 (63.5) Project Preparation Facility 1.5 (1.5) GRAND TOTAL = 604.5 (65.0) 1/ Amounts in parenthesis indicate IDA share. 2/ Consultancy contracts, though internationally procured, are shown under "other". This also applies to donors other than IDA. 3/ ICB, NCB and "shopping" may apply, depending on size of contracts. - 20 - Project Costs bv Procurement Arrangements (Actual/Latest Estimate) (US$ equivalent) Expenditure Category | Procurement Method _ _I LICBiNCBLOTHER 2lTOTALi Road Component Civil Works N/A N/A N/A N/A N/A N/A N/A N/A Equipment & Materials N/A N/A N/A N/A N/A N/A N/A N/A Cons. Services, Technical Assistance & Training N/A N/A N/A N/A N/A N/A N/A N/A Railway Component Civil Works (incl. ballast for N/A N/A N/A N/A N/A N/A N/A N/A track rehabilitation) Equipment & Materials N/A N/A N/A N/A N/A N/A N/A N/A Cons. Services, Technical Assistance & Training N/A N/A N/A N/A N/A N/A N/A N/A Port Component Civil Works N/A N/A N/A N/A N/A N/A N/A N/A Equipment & Materials N/A N/A N/A N/A N/A N/A N/A N/A Cons. Services, Technical Assistance & Training N/A N/A N/A N/A N/A N/A N/A N/A Aviation Component Civil Works N/A N/A N/A N/A N/A N/A N/A N/A Equipment & Materials N/A N/A N/A N/A N/A N/A N/A N/A Cons. Services, Technical Assistance & Training N/A N/A N/A N/A N/A N/A N/A N/A Total Investment Component Civil Works N/A N/A N/A N/A N/A N/A N/A N/A Equipment & Materials N/A N/A N/A N/A N/A N/A N/A N/A Cons. Services, Technical Assistance & Training N/A N/A N/A N/A N/A N/A N/A N/A Adiustment Component3' TOTAL PROJECT COST N/A N/A N/A N/A N/A N/A N/A N/A Project Preparation Facility N/A N/A N/A N/A N/A N/A N/A N/A GRAND TOTAL IN/A N/A N/A [N/A N/A N/A N/AIN/A N/A: Not Available I/ Amounts in parenthesis indicate IDA share. 2/ Consultancy contracts, though internationally procured, are shown under "other". This also applies to donors other than IDA. 3/ ICB, NCB and "shopping" may apply, depending on size of contracts. - 21 - A praisal Estimate Actual/Latest Estimates Percentage Compo t IDAI Govt. Cofin.I Total IDA Govt. Cofm. I Total of Appraisal Investment 48.5 279.1 255.5 583.1 53.4 228.9 88.5 370.8 63.6% Adjustmnent 15.0 5.0 20.0 15.0 5.0 20.0 100.0% PPF 1.5 1.5 1.5 1.5 100.0% [Total 165.0 279.11 260.51604.6 69.9 228.9 93.5 392.31 64.9% { Category Appraisal Actual/Latest Category Estimate Estimates Civil Works 24.1 23.0 (Roads) 22.6 22.4 (Office) 0.6 0.6 Equipment 4.0 8.9 Consultant/TA 11.9 16.6 Project Unit 0.0 2.1 PPF 1.5 1.5 Unallocated 8.5 0.0 Total Investment 50.0 52.1 Adjustment 15.0 15.0 [Total 65.0 67.1 - 22 - Annex 3: Economic Costs and Benefits Traffic data during the 1984-1996 period expressed in vehicles per day. On most sections, traffic has increased in a range of 50 percent to 100 percent between 1989 and 1996. On seven sections, traffic has decreased, however, which should be investigated. Donor 1984 | 1988 1989 1993 1996 SECTIONS MAINTAINED WITH EXTERNAL DONOR FINANCING Ndiakhirat - Mbayakh BOADJIDA - 1143 1310 Rufisque - RIO x Rtes des Niayes BOAD/IDA - 1332 Diourbel - Mbacke BOADJIDA 792 955 845 1385 1590 Diourbel - Gossas BAD/BOAD/IDA 490 607 637 673 731 Touba - Darou Mousty BADEA 376 413 401 723 725 Mbacke - Mbar BID - - 356 273 303 Fatick - Kaolack BOADIIDA 1188 1348 1272 1422 1496 Fatick - Thiadiaye BOADIIDA 1006 1189 1169 1456 1493 Mbar - Kaffrine BID - - 208 161 103 Passy - Karang BAD/BOAD/IDA - - 790 509 499 Kaolack - Kafifrine UE 411 554 637 735 770 Kaolack - Gossas BAD/ROAD/IDA 574 658 752 881 696 CFN4/N5 - Passy BAD/BOAD/IDA - - 440 777 610 CFN4/N5 - Nioro BAD/BOAD/IDA 693 638 569 897 1146 Kaffrine - Koumpentoum BAD/BOAD/IDA - - 316 440 560 Khombole - Thies BOAD/IDA 630 620 711 1364 1091 Bayakh - Mboro BOAD/IDA - - 290 614 716 Tivaouane - Thies UE 589 976 1004 1762 1322 Mbour - Diam Niadio BOAD/IDA - - 1289 1516 2457 Mekhe - Tivaouane UE 599 720 657 968 1000 Tivaouane - Mboro UE 875 956 853 - 23 - Mekhe - Darou Mamane FKDEA 233 398 302 Linguere - Loumbeul UE - - 57 85 101 Kebemer - Louga UE 987 1043 1038 1396 1329 Lompoul - Kebemer BADEA 65 54 46 67 49 Ndoyene - Darou Mousty BADEA - - 160 352 305 St Louis - Ross Bethio UE - - 901 1709 1882 Ourosogui - Semme UE - - 161 236 192 Guede - Ourossogui UE - - 266 307 339 Richard Toll - Guede UE - - 265 451 355 CFN4/N5 - Ziguinchor UE 466 609 627 554 662 Senoba - CFN4/N5 UE 295 - 471 318 264 OTHER SECTIONS Rufisque - Thiaroye 5098 6491 6221 7226 7213 Thiaroye - Rufisque 5098 - 6080 6938 7305 Bargny - Rufisque 3721 3641 4931 6011 5801 Rufisque - Bargny 3721 3641 4782 5755 5704 Diam Niadio - Bargny 2900 3255 3748 4700 4741 Bargny - Diam Niadio 2900 3255 3708 3954 4662 Diourbel - Ndindi - - 70 77 110 Touba - Mbacke - - 2540 1988 2511 Mbacke - Touba - - 2540 2002 2409 Bambey - Mekhe - - 59 45 68 CFNI - Ndangane - - 152 193 158 Mbar - Gossas 121 137 162 108 128 Diam Niadio - Thies 1951 1837 2625 2873 2787 Thies - Diam Niadio 1951 1837 2625 2873 2780 CFNI - Somone - - 434 574 701 Mbour - Joal - 1216 1438 1897 - 24 - Ouarack - Dabra 286 212 233 Louga - Potou - 120 176 253 Louga - Gnith - - 500 298 351 Touba - Dahra 304 307 - 116 624 Dahra - Linguere - - 197 159 188 Darou Mousty - Darou Marnane 234 207 245 227 284 Ouarack - Ndoyene 234 207 245 269 272 St Louis - Louga 837 865 960 1314 2068 Gandiol - CFN12 - - 282 318 357 Ourossogui - Matam - - 282 255 278 CFN2 -Rosso - - 103 324 578 Tambacounda - Kidira - - 38 93 89 CFN6 x N7 - Kedougou - - 82 105 178 Kidira - Frontiere Mali - - 30 86 119 Bakel - Semme - - 34 177 138 Kolda - Tanaf - - 179 125 181 Kolda - Diana Malari 62 53 44 109 144 Kolda - Velingara - - 118 210 304 Ziguinchor - Mpack - - 67 274 192 Ziguinchor - Tanaf - - 547 374 569 Ziguinchor - Oussouye - - 337 261 618 Oussouye - Cap Skiring - - 337 47 167 Seleti - Bignona 363 413 290 Traffic data for the port, airport and railways can be found in Annex 10. -25 - Annex 4. Bank Inputs (a) Missions: Stage o Project Cyctle No. of Persons and Specialty Performne Rating (e.g. 2 Economists, 1 FMS, etc.) Implementation Development Month/Year Count - Specialty Progress Objective Identification/Preparation 10/87 2 STE, SBE 01/88 2 STE, FA 02/89 5 STE, SHE, RE, AE (Cons), DC 05/89 2 STE, SHE Appraisa/Negotiation 12/89 6 STE, SHE, 2 RE, 2 FA, 07/90 2 STE, SHE 12/90 3 STE, SHE, RE Supervision 03/92 4 STE, HE, SFA, RE S S 11/92 5 STE, RE, PE, FA, HE S S 04/93 3 PTE, SRE, HE U S 07/93 4 PTE, SRE, PE, HE U S 05/94 2 PIE, HE U S 06/94 (ARPP) U U 03/95 7 PIE, FA (Cons), TE (Cons), S S SRE, PE (Cons), HE, E 04/96 5 PTE, RA, PE/O0, POS, HE S S 06/96 (ARPP) S S 08/96 2 P;_/OO, SPOS S HS 10/96 3 POO, SRS, HE S HS 12/96 6 POO, CE, SPOS, HE, E/FA S S (Cons), E/Ec 04/97 4 EFA (Cons), POO, CE, E/Ec S S 07/97 5 POO, CONS, HE, SPOS, E/Ec S s 12/97 4 POO, CONS, HE, E/Ec S S 03/98 7 2 IS, SPS, HE, POO, CONS, PS S S 12/98 3 POO, CONS, PS S S 07/99 2 2 CONS S S 11/99 4 2 HE, OO, S S ICR STE = Sr. Trans. Economist SHE = Sr. Highway Engineer FA = Financial Analyst TE = Transport Economist HE = Highway Engineer RE = Railway Engineer PE = Port Engineer PTE = Principal Trans. Economist SRE = Sr. Railway Engineer E = Economist RA = Research Assistant PE/00 = Pr. Econ/Ops. Offr. -26 - POS = Port Opr. Spec. SPOS = Sr. Port Opr. Spec. POO = Pr. Oper. Officer SRS = Sr. Railway Spec. CE = Civil Engr. (Intern) EIFA = Engr./Fin. Analyst E/Ec = Engineer/Economist CONS = Consultant TS = Transport Specialist SPS = Sr. Port Spec. PS = Procurement Specialist 00 = Operation Officer AE = Aviation Engineer DC = Division Chief (b) Staff: Stage of Project Cycle Actual/Latest Estimate No. Staff weeks UJS$ (,OO) Identification/Preparation 193.1 448.9 Appraisal/Negotiation 103.0 252.9 Supervision 333.1* 1,208.8* ICRI Total 629.2 1,910.6 * Includes Supervision and ICR. -27 - Annex 5. Ratings for Achievement of Objectives/Outputs of Components (H=High, SU=Substantial, M=Modest, N=Negligible, NA=Not Applicable) Rating Z Macropolicies O H OSUOM O N * NA Z Sector Policies O H *SUOM O N O NA O Physical O H O SU * M O N O NA Z Financial O H OSUOM O N O NA F Institutional Development 0 H 0 SU * M 0 N 0 NA Z Environmental O H OSU*M O N O NA Social O Poverty Reduction O H OSUOM O N * NA EA Gender O H OSUOM O N * NA O Other (Please specify) O Private sector development 0 H 0 SU O M 0 N 0 NA X Public sector management 0 H 0 SU O M 0 N 0 NA O Other (Please specify) - 28 - Annex 6. Ratings of Bank and Borrower Performance (HS=Highly Satisfactory, S=Satisfactory, U=Unsatisfactory, HU=Highly Unsatisfactory) 6.1 Bankperformance Rating E Lending OHS OS OU OHU M Supervision OHS OS OU OHU Z Overall OHS OS OU O HU 6.2 Borrower performance Rating I Preparation OHS OS OU O HU F Government implementation performance O HS 0S O U 0 HU 2 Implementation agency performance O HS 0 S 0 U 0 HU Z Overall OHS OS O U O HU -29 - Annex 7. List of Supporting Documents Rapport d'achevement du Programme d'Ajustement Sectoriel des Transports. Ministere de l'Economie, des Finances et du Plan. July 1999. Missions' aide-memoire. Technical audits of the 1998-1999-2000 road maintenance programs. Project's financial audits. Second Transport Sector Project. Project Appraisal Document. Report No. 19023-SE. March 10, 1999. - 30 - Annex 8. Beneficiary Survey Results No beneficiary survey has been carried out - 31 - Annex 9. Stakeholder Workshop Results Meetings were held with representatives of road contractors, consulting firms, road transport companies and port shipping and handling companies 1. Contractors Nine companies were represented in the meeting. Main issues included the lack of adequate engineering studies, inappropriate pre-qualification of firms, the poor planning of maintenance works, deficient procurement procedures, delays in payments, and the lack of appropriate recourse. Engineering studies. Detailed engineering studies were not appropriate (too old, too cryptic, poor quality). In too many cases, conlractors had to redo the engineering studies, resulting in extra cost and delays. The problem was aggravated by the poor condition of roads. Contractors hired to do periodic maintenance had to carry out much more expensive rehabilitation instead. Recommendations. Invest in quality eng;ineering studies and supervise consultants closely. Carry out study of construction materials in Senegal and establish national standards. Classification of contractors. Pre-qualification procedures were not adequate. All enterprises were pre-qualified, even those with no capacity. Recommendation. Carry out an independent study on the capacity of existing contractors and classify them according to the nature and complexity of works to be done. Consult with the profession before finalization. Update lists regularly. This recommendation is in the process of being implemented. Planning of works. Poor planning has led to the launching of works too close to the rainy season and to excessive recourse to emergency procedures. Recommendation. Prepare multi-year maintenance programs and contracts. A three-year rolling program of road maintenance is being prepared. Procurement procedures. Selection ciiteria are not enforced rigorously. Procedures are not transparent. Too many contracts are let without call for bids. Index for price variation is not available. Recoimrendation. Apply transparent and rigorous procedures. Use price as only criterion for selection of contractors. Consider multi-year road maintenance contracts. Establish a price index in consultation with the profession. Payments. All but one firm represented in the meeting complained about unacceptable payment delays, reaching over one year in some cases. Recommendation. Pay within three months. - 32 - Recourse. Contractors have little recourse when the goverrnent is not meeting its obligations. An arbitration mechanism at the regional level would be welcome. 2. Consulting firms Thirteen firms were represented in the meeting. Major issues discussed included the role of government, insufficient allocations for preparatory studies, and promotion of local expertise. Role of government. The governnent does not do a good job in preparing terms of reference for studies or in supervising consultants. Terms of reference are often far from reality. Government has a tendency to withhold information. Government concern is too often to put a ceiling on works to be done, with detrimental consequences for sustainability. Government tends to favor contractors and to bypass consultants in charge of supervising works. Government capacity needs to be strengthened, which requires in turn that incentives be improved. Government should consider contracting out the preparation, bidding and supervision of maintenance works. Engineering studies. During project implementation, the government did not allocate sufficient funds to engineering studies, with detrimental consequences to the quality of works done on the road network. On the other hand, too much was allocated to technical assistance. Promotion of local expertise. The theme aroused considerable interest. The issues of donors' procedures, procurement methods and farming out part of the work program to local consultants were extensively discussed. Bank procedures were deemed appropriate if properly implemented. Participants recommended that donors' procedures be better coordinated. 3. Road transport operators Thirteen road transport operators participated in the meeting., including truck owners, and small bus and taxi operators. Participants had a number of complaints, including the poor quality of the road network, the high cost of operating, maintaining and replacing an over-aged vehicle fleet, unfair competition from large enterprises, excessive government controls, and the emergence of mafia behavior forcing operators to pay for protection. Small road operators suffer from the highly cyclical nature of their trade, focused on the transport of the peanut crop. Participants recommended that they benefit from tax exemptions for the renewal of the vehicle fleet for a limited period of time, as did their competitors from Burkina Faso and Mali. They requested that they be systematically informed and consulted on policy changes. 4. Port operators. Port operators agreed that port facilities and administration have significantly improved. The port of Dakar is competitive compared to Abidjan. However, it is penalized by the poor performance of the railways, and the lack of a paved road to Bamako in neighboring Mali. In the - 33 - 1970s the port of Dakar used to account for about 60 percent of the Malian traffic. It is now down to less than 30 percent. Other constraints include urban congestion around the port, and more generally in the metropolitan area. Port administration should fuirther improve. It should focus on maintaining the facilities and on further reducing cost. - 34 - Annex 10. Transport companies; selected performance indicators During the ICR mission, sector companies were requested to compile a limited list of key indicators for the period 1991-99. The information is in the tables below, as provided. Performance indicators (in millions CFAF, unless otherwise indicated) SNCS (Railways company) 1991 1992 1993 1994 1995 1996 1997 1998 1999 Passenger.km (000) 173,034 168,757 139,712 178,730 193,522 103,391 78,312 63,395 70,926 Ton.km (000) 484,982 474,459 392,632 385,964 474,679 474,252 446,375 435,157 400,569 Revenues 10,485 11,023 8,527 10,283 12,695 12,542 12,376 12,439 Value added 7,255 7,261 4,333 6,363 7,019 7,901 7,834 7,779 Operating income 2,475 3,806 1,807 3,448 4,590 4,946 5,029 6,894 Net income 1,947 3,378 1,412 2,744 3,801 4,205 4,333 5,738 Personnel 2239 2176 2196 2167 1919 1658 1648 1587 1525 PAD (Port of Dakar) Volume (000 tons) 5,355 5,310 4,980 5,007 5,500 6,028 6,168 6,438 7,193 (of which in containers) 734 872 905 1,221 Revenues 10,341 7,346 6,230 8,014 9,252 10,511 10,704 11,610 Wage bill 3,455 2,303 2,156 2,304 2,201 2,416 2,839 3,283 % wage bill/Rev. 24 31 34 34 24 23 27 28 Civil Aviation Passengers Dakar 819,328 878,769 721,501 779,211 834,218 882,197 1,014,586 1,073,103 Freight (tons) 25,355 23,765 20,438 19,526 23,051 27,372 26,651 25,604 Revenues ASECNA 4,022 4,933 5,418 5,850 7,087 7,176 (of which fees) 2,700 2,935 2,490 3,172 4,054 4,389 4,722 5,929 6,399 Air Senegal Passengers 54,938 35,695 39,148 42,597 49,952 36,485 42,404 Revenues 1,915 1,246 1,944 2,024 2,692 1,810 2,198 Net income -65 -140 -632 414 58 -1,102 -1,706 - 35 -