Document of The World Bank FOR OFFICIAL USE ONLY Report No. 10991 PROJECT COMPLETION REPORT LESOTHO FOURTH HIGHWAY PROJECT (CREDIT 1481-LSO) August 14,1992 Infrastructure Operations Division Southern Africa Department Africa Regional Office 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. EXCHANGE RATES Currency unit = Maloti (M) Year M per US$ 1984 1.20 1985 2.00 1986 2.22 1987 2.21 1988 2.30 1989 2.35 1990 2.53 1991 2.72 GLOSSARY OF ABBREVIATIONS AfDF African Development Fund ERR Economic Rate of Return IDA International Development Association M Maloti (Lesotho currency) MICRD Ministry of Interior, Chieftainship Affairs and Rural Development MOTC Ministry of Transport and Communications MOW Ministry of Works PCR Project Completion Report PVPS Public Vehicles and Plant Service RB Roads Branch SAR Staff Appraisal Report VOC Vehicle Operating Cost VPD Vehicles per Day KINGDOM OF LESOTHO Fiscal Year April 1 - March 31 THE WORLD BANK FOR OFFICIAL USE ONLY Washington, D.C. 20433 U.S.A. Office of Disector*General Operations Evaluation August 14, 1992 MEMORANDUM TO THE EXECUTIVE DIRECTORS AND THE PRESIDENT SUBJECT: Project Completion Report on Lesotho Fourth Highway Project (Credit 1481-LSO) Attached, for information, is a copy of a report entitled "Project Completion Report on Lesotho Fourth Highway Project (Credit 1481-LSO)" prepared by the Africa Regional Office. with Part II of the report contributed by the Borrower. No audit of this project has been made by the Operations Evaluation Department at this time. Attachment 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. FOR OFFICIAL USE ONLY PROJECT COMPLETION REPORT LESOTHO FOURTH HIGHWAY PROJECT (CREDIT 1481-LSO) TABLE OF CONTENTS Page No. PREFACE .... . . . . . . . . . . . . . . . . . . . . . . . . . . . EVALUATION SUMMARY...... . . . . . . . . . . . . . . . . . . . . . ii PART Is PROJECT REVIEW FROM BANK'S PERSPECTIVE . . . . . . . . . . . . 1 Project Identity . . . . . . . . . . . . . . . . . . . . . . . . .1 Background . . . . . . . . . . . . . . . . . . . . . . . . . . . .1 Project Objectives and Description . . . . . . . . . . . . . . . . 2 Project Design and Organization . . . . . . . . . . . . . . . . . . 3 Project Implementation . . . . . . . . . . . . . . . . . . . . . . 3 Project Results . . . . . . . . . . . . . . . . . . . . . . . . . . 4 Project Sustainability . . . . . . . . . . . . . . . . . . . . . . 6 IDA Performance . . . . . . . . . . . . . . . . . . . . . . . . . . 7 Borrower Performance . . . . . . . . . . . . . . . . . . . . . . . 8 Project Relationships . . . . . . . . . . . . . . . . . 8 Consulting Services . ........ . . 9 Project Documentation and Data ..... .........9 PART II: PROJECT REVIEW FROM BORROWER'S PERSPECTIVE . . . . . . . . . . 10 IDA's performance during Evaluation and Implementation . . . . . . 10 Government's Performance . . . . . . . . . . . . . . . . . . . . . 11 Performance of the Supervision Consultant .. . ...... . . . . 12 Effectiveness of Relationship between Government and IDA . . . . . 12 Performance of Co-financier...... . . . . . . . . . . . . . . 13 PART III. STATISTICAL INFORMATION.... . . . . . . . . . . . . . . . . 14 Related IDA/Bank Loans &Credits . . . . ........ . . . 15 Project Timetable . . . . . . . . . . . . ......... .... 16 Loan Disbursements (in US$ millions) . . . . . . . . . . . . . . . 17 Project Implementation . . . . . . . . . . . . . . . . . . . . . . 18 Project Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . 19 Project Financing . . . . . . . . . . . . . . . . . . . . . . . . 22 Project Results . . . . . . . . . . . . . . . . . . . . . . . . . . 23 Direct Benefits . . . . . . . . . . . . . . . . . . . . . . . 23 Economic Impact . . . . . . . . . . . . . . . . . . . . . . . 24 Status of Covenants . . . . . . . . . . . . . . . . . . .. . . 25 Use of IDA/Bank Resources ... . . . . . . . . . . . . . . 27 MAP IBRD 17433R (February 1984) 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. PROJECT COMPLETION REPORT LESOTHO FOURTH HIGHWAY PROJECT (CREDIT 1481-LSO) PREFACE 1. This is the Project Completion Report (PCR) for the Fourth Highway Project in Lesotho, for which Credit 1481-LSO in the amount of SDR 14.3 million (US$15.2 million equivalent) was approved on May 24, 1984. The Credit was closed on August 31, 1991, three years behind schedule. A total of SDR 14.16 million was disbursed, and the balance of SDR 0.14 million was cancelled; the last disburse- ment was made on December 31, 1991. The project was co-financed by the African Development Fund (AfDF) which provided funding in the amount of US$8.6 million equivalent. 2. This PCR was prepared by the Infrastructure Operations Division, Southern Africa Department, Africa Region (Preface, Evaluation Summary, Part I and III) and the Borrower (Part II). 3. Preparation of the PCR was initiated during the Association's final supervision mission of the Project in October 1991, and is based inter alia on the Staff Appraisal Report (SAR), the Development Credit Agreement, supervision reports, correspondence between IDA and the Borrower and internal IDA memoranda. PROJECT COMPLETION REPORT LESOTHO FOURTH HIGhVAY PROJECT (CREDIT 1481-LSO) EVALUATION SUMR 1. Objectives: The general project objectives were to lower transport costs and increase accessibility of rural areas, as well as to assist the Government in its institution-building efforts in the transport sector in line with its general policy objective of employment generation. The project was successful in meeting the main objective of improving the condition of roads while the objectives related to training of local professional staff for the Roads Branch (RB) and Public Vehicles and Plant Services (PVPS), and enforcement of Axle Load Control were only partially fulfilled. The shortfall in meeting the latter objectives was caused by Government's inability to retain the trained staff and failure to start enforcement of Axle Load Control. 2. Implementation Experience: RB of Ministry of Works (MOW) was able to exceed the originally estimated physical targets set for the regravelling and upgrading of earth roads to gravel standard. However, the rehabilitation of paved roads by contract was completed two years behind schedule and at a higher cost than estimated at appraisal. This was due mainly to changes in design standards set for the urban section of the roads and the shoulders of the rehabilitated paved roads. The Borrower was able to process procurement of works, goods and services on schedule and complied with all covenants, even though there were delays in the submission of audit reports. The Bank's project supervision performance at both the field and headquarters levels was good, and contributed to the successful completion of the project. The Bank and thp Borrower maintained a good relationship throughout the project implementation period. 3. Results: Achievements under civil works which made up 792 of the total project cost were higher than originally planned. Technical assistance personnel for RB and PVPS were put in place on time and performance was satisfactory. The supervision consultants financed by AfDF, had difficulty in completing the design of the urban section of the paved road rehabilitation component and in the submission of the progress reports in the early stages of the contract. The Government noticed a number of discrepancies and brought them to the attention of the consultant. However, to date it has received no response to its queries. The building of institutional capacity was hampered by the loss, to the private sector, of engineers trained under the project. The re-evaluated economic rate of return (ERR) of the rehabilitation component for Project I (19.5 km stretch from Maseru to Masianokeng) was estimated at 12.4Z as compared with the appraisal estimate of 16.4Z. The ERR of the rehabilitation component for Project II (88 km stretch from Leribe to Maseru) has been re-evaluated at 31.1% as compared with the original estimate of 22.7Z. The ERRs of the regravelling and upgrading components, originally estimated at 15.8Z and 16.2% respectively, have been re- evaluated at 4-:j.8Z and 16.9% respectively. 4. Sustainabilitys The sustainability of benefits derived from the project will depend ont (i) Government provision of adequate funding for road maintenance in the future; (ii) the ability of RB to retain trained staff; and (iii) the stringent enforcement of Axle Load Control, not only as a preventative measure but as a means to reducing the budgetary burden of road maintenance on Government in the long-term. 5. Findings and Lessons Learned: (i) The accomplishments of both the equipment- and labor-intensive brigades involved in the regravelling and upgrading operations of unpaved roads were commendable. However, a follow-up project would ensure that the capacity developed by the brigades under the project would have a sustained positive effect on the sub-sector. (ii) The institutional capacity of the highways sub-sector has been hampered by the loss of engineers trained under the project to the private sector. Government has attempted to provide trained engineers with incentives to remain in the public sector as part of its Civil Service Reform package. However, until this flow is stemmed the maintenance of roads will continue to be negatively affected. (iii) The importance of effective enforcement of Axle Load Control to levels applied in the design of the roads does not seem to be fully understood by concerned officials, and failure to implement such control could deprive Lesotho of the benefits of the investments made in its road infrastructure. PROJECT COMPLETION REPORT LESOTHO FOURTH HIGHWAY PROJECT (CREDIT 1481-LSO) PART I: PROJECT REVIEW FROM THE BANK'S PERSPECTIVE 1. Project Identity Name s Fourth Highway Project Credit No. 1481-LSO RVP Unit Southern Africa Department Infrastructure Operations Divlaion Country Lesotho Sector a Infrastructure Sub-sector a Highways 2. Background 2.01 Highly mountainous with rugged terrain end wintry conditions in the highlands, Lesotho depends almost exclusively on road and air transport for internal transport. The country has no navigable rivers and no railway except for a short (2 km) rail link operated by South Africa Railways from the South African border to Maseru. While the domestic air service is reasonably effective, the road network is inadequate in length and condition, particularly in the eastern region of the country. Much of the network is poorly maintained and many roads can be traversed only in the dry season, and even then only by four-wheel drive vehicles. 2.02 The road network, totalling about 5,000 km, consists of 2,500 km classified roads (800 km of which are bitumen surfaced and 1,700 km gravel surfaced) and 2,500 km unclassified roads. The Roads Branch (RB) of the Ministry of Works (MOW) is responsible for the maintenance of the 2,500 km of classified roads. The Civil Works Section of the Ministry of Interior, Chieftainship Affairs and Rural Development (MICRD), using labor employed under the Food for Work Programme and sometimes cash, is in charge of construction and maintenance of most earth tracks and foot bridges in the count&y's outback; and the Ministry of Agriculture and Marketing (MOA) is responsible for construction of about 200 km of feeder roads. -2- 2.03 In the 19609 and early 1970s, the principal focus of transport policy was on serving the main population and production centers along the north-south lowland corridor along the western border. In the mid-1970s, Government began to extend the road network to the eastern mountain areas in an effort to develop their full socio-economic potential and promote the political and administrative integration of the country. At this time, two other objectives guided the formulation of transport policy in Lesotho. Namely, (i) to increase employment generation; and (ii) to reduce dependence on South Africa. (The Labor-Intensive Construction Unit (LCU), established with IDA assistance under the Second Highway Project (Credit 619-LSO, US$5.5 million, 1976) supported both these objectives). 2.04 IDA's support for Government's policy in the highway su'osector began in 1966 with a credit of US$4.1 million (Credit 82-BL) to help finance the construction of 107 km of the main North-South road from Leribe to the Masianokeng turnoff, and a 27 km gravel road between Leribe and Pitseng. The works were completed satisfactorily for less than the estimated costs, and the savings were used to pave a further 6 km section. Including this project, IDA has financed four highway projects (Table 1), the main objectives of which have focussed on improving the condition and standard of the roads, establishing of labor and eqlipment-intensive construction brigades, institutional strengthening of RB and PVPS, training of RB and PVPS staff, provision for field office construction, purchasing and installing weighbridges, purchasing maintenance equipment and spare parts, technical assistance to RB and PVPS in civil and mechanical engineering, and consultant services for engineering design and contract supervision. The Fourth Highway Project continued the support given by IDA to the Government in developing its road network in line with its economic policy of increasing employment generation through the use of labor-intensive work methods. 3. Project Objectives and Description 3.01 Project Objectives: The objactives of the Fourth Highway Project were to lower transport costs and increase accessibility of rural areas, as well as to assist the Government in its institution-building efforts in the transport sector in line with its general policy objective of employment generation. 3.02 Project Description: The project consisted of the following components: (a) rehabilitation of two paved road sections: one urban/suburban section from about the 6 km point north of Maseru, via Maseru to Masianokeng (Project I, 19.5 km) and one rural section from Leribe to a point 6 km north of Maseru (Project II, 88 km); plus the construction of two bridges on the road from Masianokeng to Mafeteng; (b) regravelling of 360 km of gravel roads, upgrading from earth to gravel standards of 42 km, and the improvement of drainage on 123 km of gravel roads; -3- (c) procurement of traffic counters and weighbridges; and (W) technical assistance (including a study of the domestic construction industry), training and fellowships. 4. Project Design and Organization 4.01 Conceptual Foundations The project components were developed through an in-depth assessment of the priorities in the sector. The paved road component was aimed at improving the condition of the most important and highly trafficked roads. The strengthening of the institutional capacity of both the labor- and equipment-intensive brigades, staff training and technical assistance were components conceptually based on lessons learned under the previous projects. 4.02 Scope and Scales Through a feasibility study during the preparation phase, a total of 190 km of paved roads were identified as economically viable for reb lilitation. However, funds available from GOL, IDA and AfDF were sufficient to cover the renabilitation of only 107 km of the high priority roads. 4.03 Roles and Responsibilities of Institutions and Agencies: The Government agencies involved in the design and execution of the project were RB, LCU and PVPS for all road-related components and the traffic police for enforcement of Axle Load Control. All of the relevant agencies contributed to project design. 5. Project Implementation 5.01 Credit Effectiveneses The Credit was approved on May 24, 1984 and became effective on November 13, 1984, after an extension of the effectiveness date one month. Force account works and the contract for rehabilitation of paved roads were started immediately after Credit effectiveness as the processing of procurement had been carried out in advance under a Project Preparation Facility (PPF). 5.02 Implementation Schedule: The project was completed in February 1991 and the Credit was closed on August 31, 1991 (after two extensions), two and a half years after the originally scheduled date. The extensions were necessary in order to allow completion of the rehabilitation of the paved roads and to carry out bitumen paving of the gravel surfaced shoulders of the rehabilitated roads. Due to a shortage of experienced Basotho engineers, the contracts of two technical assistance engineers were extended up to the end of August 1991. 5.03 Decisions and Actions during Project Implementations The decision to bituminize the surface of the gravel shoulders of the rehabilitated paved roads was technically and economically justified due to the extensive and fast wear of the shoulders in heavily trafficked sections. The revision of pavement -4- design for the urban section with a dual carriageway was also appropriate in view of the resulting significant savings in maintenance costs and excellent riding quality. The design of the urban section of the paved road rehabilitation component was revised to include the provision of suitable run-off drainage, pedestrian foot-paths, a roundabout, and speed limit rumble strips. These changes are expected to improve safety and environmental conditions. 5.04 Disbursements: The annual disbursements under Credit 1481-LSO are given in Table 3 in Part III. By the original Closing Date, disbursements under the project amounted to 74Z of the SAR estimate. This percentage would have been higher had the bitumen paving of shoulders been included in the original engineering design and the design of the urban section been completed on time. A total of SDR 14.16 million was disbursed, and the balance of SDR 0.14 million was cancelled; the last disbursement was made on December 31, 1991. 5.05 Project Cost: Details of the project cost as provided by Government, and reviewed by the Bank, are given in Table 5 in Part III. The actual total project cost of US$32.20 million is 14Z higher than the appraisal estimate of US$28.23 million with the actual Maloti cost of 65.74 million being 94Z higher than the appraisal estimate, mainly due to exchange rate fluctuations. 5.06 Project Risks: Project risks identified during appraisal were related to those elements requiring substantial local technical and managerial inputs. These elements included: (i) the road improvement component, and, in particular, the labor-intensive road improvement operation (through LCU), and (ii) the traffic count and Axle Load Control programs. In addition, the training component of the project was considered risky since it was not certain that trained local staff would stay with M0W or even in Lesotho. Although sufficient local staff were trained abroad under the project, the turnover of those leaving RB and PVPS to join the private sector, both in Lesotho and South Africa, was considerably high. While the risk related to LCU did not materialize, those related to the traffic count program and the enforcement of the Axle Load Control made for persistent problems. Even though stationary weighbridges were installed and mobile weigh-scales were purchased two years prior to project completion, the training and establishment of Axle Load Control teams did not take place. 6. Project Results 6.01 Overall Proiect Impacts The main project objectives relating to road rehabilitation, regravelling, upgrading of earth roads to gravel surface were fully achieved. However, the improvement of drainage structures was only 50Z completed. Design standards on the urban section of the paved road rehabilita- tion component were improved and gravel surfaced shoulders were later bitumin- ized. The design improveLients were established to be technically and economic- ally jastified and have made a significant contribution towards reducing future maintenance costs. 6.02 Economic Impact: At appraisal, economic evaluation of benefits in quantitative terms was limited to the rehabilitation and improvement components which together accounted for approximately 90Z of total project costs. At appraisal, the economic rate of return for the rehabilitation of paved roads in Project I (19.5 km stretch from 6 km north of Maseru to Masianokeng) was estimated at 16.42. and that for Project II (88 km stretch from Leribe to 6 km north of Maseru) at 22.72. Justifications for these estimates rested on the expected prevention of further deterioration of the roads, the reduction of transport costs and to some degree, the avoidance of sharply higher future costs of rehabilitation and/or maintenance. The regravelling and upgrading components were originally estimated to have ERRs of 15.8Z and 16.2Z respectively. These estimates were made on the basis of anticipated vehicle operating and transport cost savings. The economic re-evaluation estimates ERRs of 12.4% for Project I, 31.12 for Project II and 40.82 and 16.92 for the regravelling and upgrading components. 6.03 Paved Roads Component: Work on the contract for rehabilitation of the 19.5 km section of paved road from 6 km north of Maseru to Masianokeng and construction of two bridges (Project I) was completed in February 1988 (17 months after the estimated completion date) at a total cost 117% above the cost estimated at appraisal (US$14.2 million). Changes in the design of the 3.8 km urban section with a dual carriageway accounted for both the increase in cost and the delay in completion of this component. These changes were made to accommodate necessary drainage features, the provision of pedestrian sidewalks and the use of asphalt concrete surfacing instead of double surface treatment. Work on the contract for the AfDF-financei paved road rehabilitation component (Project II) was completed at the same time at a cost 7.52 higher than estimated at appraisal. 6.04 Regravelling of Gravel Roads by Equipment-Intensive Brigades: The standard and quality of the regravelling work carried out was satisfactory. The equipment-intensive brigade completed 373 km exceeding the app:aisal target of 297 km by about 252 at a total cost of M 9.69 million (about US$2.89 million), 1502 higher than that estimated at appraisal. The brigades' production rate was about 55 km per year compared to the appraisal estimate of 100 km per year. This is still judged satisfactory considering the abnormally severe climactic conditions and prolonged rainy season during the first three years of project implementation. 6.05 Upgrading of Earth Surfaced Roads to Gravel Standards The labor- intensive brigade completed the SAR regravelling target of 63 km and the upgrading target of 42 km (total 105 km) in five years instead of the three years estimated at appraisal. Its production rate was 25 km per year at an average cost of M21,000 per km as compared with the appraisal estimate of 35 km per year at M23,110 per km. The work was of a lower quality and standard than that of the equipment-intensive brigade. 6.06 Improvement of Drainage: The culverting unit completed 120 culverts and 6 fords compared to the appraisal estimate of 238 culverts and 12 fords and expenditure on this component was 182 higher than the appraisal estimate. -6- 6.07 Domestic Construction Industry Study: The consultant engaged to carry out the domestic construction industry completed the study and submitted the draft final report. A strategy document on the development of the local construction industry was prepared. Implementation of the recommendations contained in this report has been proposed for inclusion in the Infrastructure Rehabilitation and Maintenance Project to be financed by IDA. 6.08 Weighbridges and Traffic Counters: Under the project, two mobile weighing scales were purchased and two stationary weighbridges were purchased and installed. Also, three vehicles were purchased for use by the Axle Load Control teams. However, two years after the weighbridges were ready for use, the mobilization and training of Axle Load Control teams had not taken place. 6.09 Fellowship and In-Country Training: A total of 43 candidates from RB, PVPS and MOW were sent abroad for training at both the undergraduate and graduate levels. RB has not been able to fill all the positions authorized under the project since several graduate civil and mechanical engineers trained under the project left MOW to join the private sector both in Lesotho and South Africa. Therefore, RB continued using technical assistance staff to carry out most of the engineering tasks under the project. PVPS, on the other hand, has been able to man all its positions locally. 6.10 Technical Assistance: Under the project RB and PVPS have each received about 200 man-months of technical assistance at a total cost of about M 5.92 million (about US$2.69 million) compared to the SAR estimate of US$1.8 million. The increase in technical assistance expenditures was necessitated by the continued shortage of experienced Basotho civil and mechanical engineers. 6.11 Purchase of Equipment: Equipment valued at US$0.73 million compared to the appraisal estimate of US$0.93 million was purchased under the project. 7. Proiect Sustainability 7.01 Economic Benefit: The sustainability of benefits derived from the project will depend on the adequate and timely maintenance of roads. Supervision missions noted that routine maintenance was not being carried out on regravelled and upgraded roads completed early on in project implementation. Also, budgetary allocations for maintenance over the course of implementation averaged only 70Z of required amounts. Under such circumstances it is unlikely that the Government will be able to retain the re-evaluated benefits over the economic life of the roads. The stringent enforcement of Axle Load Controls could be of some assistance not only as a preventive measure but as a means of reducing the future budgetary burden on Government with respect to road maintenance. -7- 8. IDA Performance 8.01 Performance in the Early Stage: At the time of project identifica- tion, the Government was carrying out investigations into the structural strength of pavements of the main paved roads. Under a PPF advance, feasibility studies and detailed engineering of the paved roads rehabilitation were carried out. The Government, assisted by a consultant completed Phase I of the detailed engineering of the selected paved roads and the Bank carried out a preappraisal mission in September/October 1983. The Credit was negotiated in February 1984, approved on May 25, 1984, and became effective on November 13, 1984. Considering the extent of the overlap between the Third and Fourth Highway projects, the time taken from preparation to Credit effectiveness was considered reasonable. Because of actions taken during the project processing period to complete the detailed engineering, preparation of procurement documents and tendering of bids for the rehabilitation of paved roads, it was possible to award contracts two months before the Credit Effectiveness date. 8.02 Supervision Performances Supervision was carried out regularly over the six years of project implementation, averaging about 1.7 missions per year with the time spent in the field averaging six days per mission. Bank missions assisted the Government in resolving critical technical issues, including the modification of design standards, assessment of the quality of works carried out and the improvement of force account brigade performance. 8.03 Main Lessons of Experience: (i) Reports from supervision missions indicated that maintenance funds had been about 70% of requirements, with most of the shortfall coming out of operating expenses rather than salaries. In the absence of adequate provision for road maintenance, it will not be possible to justify future investments in road infrastructure. A review of the organizational structure of RB as well as the introduction of an effective road maintenance performance and budgeting system is neededl/. Follow-up projects should emphasize the need to correct the problems and constraints which have adverse effects on road maintenance. (ii) The shortage of experienced Basotho civil engineers will continue to plague RB as long as there is a significant gap in remuneration between the public and private sectors, and the Government will have to continue using donor-funded expatriate civil engineers to cover the shortfall. Under such conditions, institution-building using local personnel will remain unattainable. (iii) Despite the efforts of IDA, enforcement of Axle Load Control has not been undertaken by the Government. In the absence of Axle Load Control, the Government is bound to lose the investments made in rehabilitating, regravelling and upgrading the roads in a period 1/ A pavement and maintenance management system will be put in place under the Infrastructure Engineering Project, for which negotiations were completed in early May 1992. shorter than the design life of the roads. Thus, it would seem appropriate to make the start of Axle Load Control operations a condition in any follow-up project.l/ 9. Borrower Performance 9.01 Project Preparation and Start-Up: The Government's decision to carry out an investigation of the structural strength of pavements (financed using local funds) significantly helped to speed up project preparation, as did its decision to have the procurement of the paved roads contract completed prior to Credit effectiveness. The work programs prepared by RB for regravelling and upgrading works by the equipment and labor-intensive brigades and culverting units were adequate, sound and completed on schedule. 9.02 Proiect Implementation: The performance of RB's equipment- and labor-intensive brigades was good. PVPS, supported by a technical assistance team, was able to improve the percentage of its equipment availability to 75%, compared to less than 501 prior to the input under the project, and was also able to introduce an effective management system. Even though PVPS has lost several of its staff trained under the project, it was able to maintain its level of efficiency after the departure of the technical assistance team. RB made an effort to train sufficient civil engineers under the project, but a number of trained staff were lost to the private sector. Unlike PVPS, RB had a shortage of experienced civil engineers to cope with the work load, and continued to depend on expatriate engineers. Even though weighbridges were made available under the project, the enforcement of Axle Load Control did not take place. 9.03 Decisions taken during Implementation: Because of the fast deterioration of the gravel surfaced shoulders of the heavily trafficked sections of the rehabilitated paved roads, Government requested and IDA agreed to have the shoulders bitumen surfaced. This decision was technically sound and cost effect- ive, especially since road maintenance funds were not adequate. 9.04 Road Maintenance: Budgetary allocations for maintenance were inadequate over the course of implementation [see para. 8.03 (1)]. 10. Project Relationships 10.01 Bank staff and officials of the Government involved in the implementation of the project enjoyed an amiable and highly professional working relationship. The project benefited from the high level of continuity in the supervisory staff assigned to it as well as from the vast professional experience of the individuals. 1/ Enforcement of axle load control is proposed as part of the conditionality package for the proposed Infrastructure Rehabilitation and Maintenance Project (FY94). -9- 11. Consulting Services 11.01 Supervision of the IDA-financed paved road rehabilitation contract was financed by AfDF. The detailed engineering design for the urban section of the rehabilitated paved roads and revisions to the original design were carried out by the supervision consultants. There was a protracted delay in carrying out the required revisions and as a result, the operations of the contractor were interrupted and a claim later submitted. 12. Project Documentation and Data 12.01 The Loan Agreement provided adequate guidance in project management and implementation. There were no distinguishable delays in the submission of withdrawal applications. However, this was not the case regarding the submission of both audit and consultant progress reports. - 10 - PROJECT COMPLETION REPORT LESOTHO FOURTH HIGHWAY PROJECT (CREDIT 1481-LSO) PART II: PROJECT REVIEW FROM BORROWER'S PERSPECTIVE 1. IDA'S PERFORMANCE DURING EVALUATION AND IMPLEMENTATION 1.01 Performance of IDA in the Early Stages The provision of the Project Preparation Facility (PPF), advanced by IDA during the project identification stage immensely helped Government to fast-track that process. As a result, it was possible to put the project in shape much earlier by preparing tender documents and engaging technical assistance for the RB. This cooperation and understanding from the Bank was highly appreciated by Government. 1.02 Supervision Performance The personnel assigned by IDA to supervise this project was highly experienced technically and this resulted in the timely solution of critical technical problems. From the outset, this team struck an amiable professional relationship with the RB officers who were assigned to implement the project. 1.03 Main Lessons of Experience (M) The provision of the PPF at an early stage greatly enhanced the project implementation. This practice should be continued, where necessary, in the future as it has proved beneficial in this project. (ii) The timing and frequency of the supervision missions also played a significant role on the performance of the project. It was possible to solve a lot of critical technical problems on the spot thus achieving time savings on project implementation. (iii) The amiable relationship between the RB officials and IDA's supervision staff also contributed heavily towards the successful completion of this project. 2. GOVERNMENT'S PERFORMANCE 2.01 Early Stage The Government of Lesotho greatly enhanced the start-up of the project by carrying out investigations on the structural conditions and performance of most of the paved roads in the lowlands - a greater part of which would form the project roads. This was made easier by the provision of a PPF advance before the actual start-up date of the project. Hence, the project cycle was greatly reduced. 2.02 Supervision Performance RB's performance during the supervision stage was made easier by timely and well interspersed supervision missions. Although the actual supervision was mostly carried out by expatriate personnel - provided under IDA's technical aid - a lot of local Basotho engineers were trained. Unfortunately, a large number of them left RB to join the more attractive private sector. 2.03 Main Lessons of Experience The project had two main objectives: (a) to lower transport costs and increase accessibility of rural areas; and (b) to assist the Government in its institution-building efforts in the transport sector while maximizing employment generation. 2.04 The first objective was successfully achieved. The economic impact assessment as shown by Table 6 in Part III and the latest traffic statistics on the project roads bear testimony to this fact. 2.05 The second objective was only partially realized. The institution- building effort of Government in the transport sector envisaged under the project did not materialize. During the life of the Fourth Highway Project, the Lesotho Highlands Water Project (LHWP) which is being run along the lines of a private concern came into being. This project had lucrative attractions to graduate engineers, most of which were trained under the Fourth Highway Project. This resulted in the wholescale movement of most of RB's local Basotho engineers, (who were in great demand) to join LHWP. 2.06 PVPS, however, was quite successful in this regard. Before the start of this project PVPS had hardly any Basotho engineers. At the conclusion of the project, PVPS was fully manned by Basotho engineers and technicians. 2.07 A measure of employment generation was achieved under the project. The project helped to cement the Labour Construction Unit (LCU) firmly on its - 12 - feet by giving it a sustainable programme and a financial base to employ more labourers. The LCU is now a full-fledged branch of MOW and no longer under the auspices of RB. 2.08 On the basis of the foregoing points, the main lessons of experience on this project can be summarized as followss (i) The disparity between the private sector and the Government on the factor of remuneration for engineers and technicians if ignored will incessantly plague any Government effort to strengthen its engineering workforce. (ii) The contribution of the private sector in the transport industry be it in construction or maintenance cannot be overemphasized. Under this project, it was discovered that it was more efficient to run privately engaged plant and equipment than it was to run the Government fleet. Under the Domestic Construction Industry Study, it was recommended that the privatization of a larger part of the maintenance effort in the road sector be undertaken. Government is preparing to undertake this effort. (iii) The Fourth Highway Project was, to a large extent, coordinated by expatriates due to the wholescale movement of local engineers to LHWP and the private sector. The two expatriate personnel assigned to this project for coordination had to be engaged up to the completion date of the project in August 1992. As a result the few local engineers that remained behind did not get as much exposure as these expatriates due to some work exigencies in some other projects and activities of RB. Perhaps the GOL would be well advised to try to address the problem of the unabating movement of Basotho engineers from the civil service. 3. PERFORMANCE OF THE SUPERVISION CONSULTANT 3.01 The performance of the consultant engaged from the feasibility study stage up to the post-construction stage, was less than satisfactory. A number of discrepancies were observed and put forward to the consultant to address, but to date the consultant has not responded to these queries. 3.02 As a direct consequence of the consultant's performance in the Engineering Report, contract documents and in the actual supervision process the contract price was substantially increased. 4. EFFECTIVENESS OF RELATIONSHIP BETWEEN GOVERNMENT AND IDA 4.01 The relationship between the Goverment and IDA has been very amiable, as indicated earlier. This warm relat,onship, especially with staff assigned to supervise this project facilitated its successful completion. - 13 - 5. PERFORMANCE OF CO-FINANCIER 5.01 The co-financier for this project was the African Development Bank. The African Development Fund (ADF) component of the project consisted of the rehabilitation of the Maseru to Leribe road (88 km) and consultancy services for its supervision, as well as that for the Maseru to Masianokeng road (under IDA funding). 5.02 The performance of the ADB on this component was very good and the relationship between GOL and ADB remained cordial over the course of implementa- tion. - 14 - PART III. STATISTICAL INFORMATION - 15 - TABLE 1 Related IDA/Bank Loans & Credits Credit Title Purpose Year of Status Approval First Highway Construction of 107 km main 1966 Satisfactorily Project, Cred- north/south roadt 27 km of completed at it 82-BL (US- gravel road. lower than esti- $4.1 million) mated cost. Second Highway Construction to all-weather 1976 The PCR states Project. Cred- gravel standard of a 147 km that the project it 619-LSO section of road link; es- was partly suc- (US$5.5 mil- tablishment of Labor Con- cessful mainly lion) struction Unit. because of high turnover of trained Basotho Engineers. Third Highway Paving of 24 km road; im- 1979 Completed satis- Project, Cred- provement of gravel and factorily in it 884-LSO earth roads through equip- 03186. (US$9.0 mil- ment and labor-intensive lion) regravelling brigades; con- struction and equipping of regional offices; Construc- tion and equipping of PVPS; TA and fellowships; and engineering design and con- tract supervision. - 16 - TABLE 2 Prolect Timetable ITEM PLANNED REVISED ACTUAL Identification 04/81 - 04/81 Preparation 12/82 - 12/82 Preappraisal 03/83 - 03/83 Appraisal 06/83 - 06/83 Negotiations 03/84 - 03/84 Board Approval 05/24/82 - 05/24/84 Credit Signing 07/09/84 - 07/09/84 Credit Effectiveness 09/09/84 10/09/84 10/09/84 Project Completion Date 12/87 12/89 02/28/91 Credit Closing Date 06/30/88 06/30189 08/31/91 * 17 - TABLE 3 LOAN DISBURSEMENTS (in US$ millions) Bank Fiscal Appraisal Actual Actual Z of Year Estimate Appraisal 1985 4.996 2.232 45 1986 9.035 6.077 67 1987 12.410 10.133 81 1988 15.210 11.306 74 1989 11.981 79 1990 15.512 89 1991 17.797* 101 * Exchange rate: SAR: SDR 1.000 - US$1.063 Actual: SDR 1.000 - US$1.260 - 18 - TABLE 4 Proiect Implementation Indicators Appraisal Estimate Actual Indicator 1 Rehabilitation of 19.5 km of 100 Z by 03/87 bitumen roads and construction of two bridges by 10/86 Indicator 2 Improvement of gravel/earth roads: (i) Equipment-intensive 126 Z by 06/91 brigade 297 km by 06/88 (ii) Labor-intensive brigades 100 X by 06/91 105 km by 06/88 (iii) 238 Culverts and 12 fords 93 culverts and by 06/87 6 fords by 06/87. Indicator 3 -- Bituminization of 15 km gravel shoulders. Indicator 4 Procurement and installation of 100 2 stationary weighbridges and traffic counters Indicator 5 Procurement of equipment 78 2 Indicator 6 Technical Assistance 120 Z Indicator 7 Domestic Construction Industry Study 80 z Indicator 8 Training and TA for PVPS and RB 100 % TABLE 5 - 19 - Proiect Cost and Financing A. Project Cost (1) Appraisal Estimate MS CAL FOREIGN TOTAL LOCAL FOREIGN TOTAL - --(M million) - - (US $ Million) - A. Rehabilitation of Paved Roads 0) Detailed EnZneerlna/ - .375 .375 .313 .313 0) Construction * Project I, Mautanokeng-Maseru 1.265 5.152 6.417 1.054 4.293 5.347 (19.5 km) . Prolect U. MaseruLriba (88km) 1.556 6.550 8.106 1.297 5.458 6.755 - Project A, Tooaing and Lekoant lana Brdges .500 1.100 1.600 .417 .917 1.334 ilI) Construction Supervision .164 .716 .880 .137 .597 .734 TOTAL REHABILrTATION 3.485 13893 17.378 2.90 11.578 14.4 §. Improvement of GravelEarth Roads ) Equipment Intensive Briade - Equipment Purchase .027 .581 .608 .023 .484 .507 - Operatng Costs 1.m 1.590 3.216 1.355 I.325 2.680 Sub-Total 1.653 2.171 3.824 1.378 1.809 3.187 0) Labor Intensive Brioade * Equipment Purchase .005 .102 .107 .004 .065 .089 - Operating Costs 1.358 .474 1.832 1.131 _M 1.527 Sub-Total 1.363 .576 1.93 1.135 .480 1.616 Ill) Cuivertina Brnado - Equipment Purchase .007 .152 .159 .000 .127 .133 * Operating Costs .441 .292 .733 .368 .243 611 Sub-Total .448 .444 .892 .374 .370 .744 TOTAL IMPROVEMENT 3.44 3.191 6.65 2.8 2.659 5.545 C. Traffic Counters and .022 .222 .2J44 .018 .15 .:m Welahbrides Purchase D. Technical Assistance - Domestic Construction Indusby Study .085 .085 .071 .071 * Technical Assistance 400 1.728 2128 333 1.43 1.769 TOTAL TECHMCAL ASSISTANCE .400 1.813 2.213 .333 1507 1.840 E. Trainina 23 1.482 .1.69 .197 1.218 1.415 BASE COST (March 1984 Prices) 7.607 20.581 28.188 6.339 717 23.486 ,1 Acual Cost financed under PPF. - 20 - TABLE 5 Appraisal Estimate ITEMS LOCAL FOREIGN TOTAL LOCAL FOREIGN TOTAL -(M Million -(US S Million)-- F. Contincencles ) Physical 10% of A (l) .332 1.280 1.612 .276 1.066 1.342 I) Price A. B, C, and Ej/ 1.451 3.011 4.462 1.190 2.528 3.718 I) Extrg20% of ProjeotN .311 1.621 .29 1.092 1.351 Sub-Total 2.094 5.601 7.695 1.725 4.686 6.411 TOTAL PROJECT COST INCLUDING TAXES 9.701 26.182 35.880 8.064 21 83 29.897 TOTAL PROJECT COST EXCLUDING TAXES 7.701 26.182 33.883 6.400 21.834 28.234 1/ Expected price Increase (%): 1984 1985 1986 1987 1988 Foreign 7.5 7.0 6.0 6.0 6.0 Local 13S 13.0 12.0 12.0 12.0 S/Extra contingency for Project U of Rehabliftaion Works. - 21 - TABLE 5 A. iroject Costs (2) Actual ACTUAL J ITEMS LOCAL FOREIGN TOTAL LOCAL FOREIGN TOTAL (M Million) (US $ Milon) A. Rehabilitation of paved roads ) Detailed Engineering 0.375 0.375 - 0.313 0.313 0) Construction Project I 7.120 15.624 22.744 4.545 9.975 14.520 Construction Project I 4.875 7.484 12.359 2.183 3.512 5.685 I) Construction Supervision 0.924 4.184 5.108 0.411 1.941 2.352 Iv) Bituminization of Shoulders Project I and 1 0.750 0.750 1.500 0.268 0.268 0.536 TOTAL REHABILITATION 13.669 28.417 42.086 7.407 16.009 23.416 9.1 Imorovement of Gravel/Earth Tracks I) Equipment IntensIve Brigade: Equipment Purchase 0.043 0.822 0.865 0.021 0.216 0.237 Operating Costs 4.410 4.410 8.820 1234 1.235 2.469 U) Labor intensve Brigade: Equipment Purchase 0.110 0.193 0.303 0.005 0.092 0.097 Operating Costs 1.853 1.853 3.706 0.78 0.78 1.860 III) Culverting Brigade: Equipment Purchase 0.002 0.100 0.102 0.002 0.047 0.049 Operating Costs 0.475 0.475 0.949 0.247 0.217 0.434 TOTAL IMPROVEMENT 6.893 7.853 14.745 2.259 2.587 4.848 C. Traffic Counters and Weighbridaes 0.028 0.252 0.280 0.008 0.057 0.063 D. Two Premix Machines for Rehab. BIt 0.038 0.339 0.377 0.009 0.008 0.017 E. Roads Training Aids 0.008 0.008 0.012 0.001 0.004 0.005 F. Technical Assistance ) Domestic Construction industry Study 0) Technical Assistance (To PVPS & RB) - 0.120 0.120 0.056 0.056 0.540 5.258 5.798 0.212 2.269 2.481 TOTAL TECHNICAL ASSISTANCE 0.540 5.378 5.918 0.212 2.325 2.537 G. Training 0.300 2.024 2.324 0.135 0.913 1.048 TOTAL COST 214 44.269 85.742 10.029 21.903 81.932 Average rate of Exchange - US$1 - M 2.02 1 Provided by Govemment - 22 * TABLE S B. Pro ect Financing (US Milulion) Project Component Planned Actual IDA AfDF GOL IDA AfOF GOL A. Rehabilitation of Paved Roads * Detailed Engineering 0.313 - * 0.313 * Project I 5.600 0.990 11.886 2.098 . Project U * 8.229 1.750 4.670 1.025 * Project A 1.417 0.250 - Supervision Project I 0.283 - 0.050 * Supervision Project U 0.375 0.042 - 2.444 0.352 . Supervision Project A 0.142 0.025 . Bitumenlsatlon of Shoulders - 0.456 - 0.080 - - 0.200 Subtotal A 7.755 8.604 .107 12.75 7.114 8.55 S. Improvement of Gravel and Earth Roads - Procurement of Equipment 0.729 - * 0.360 * 0.036 * Equipment Intensive Brigade 1.600 - 1.650 1.235 * 1.234 . Labor Intensive Brigade 0.894 - 0.997 0.780 - 0.780 * Cuverting Brigades 0.375 0.375 0.217 -0.217 Subtotal B 3.598 3.022 2.592 2.267 C. Welhbridges and Traffic 0.204 - 0.0683 Counts D. Technical Assistance 2.042 - * 2.537 E. Training 1.575 1.048 * Total Project Costs (Including 15.174 8.604 0.129 18.995 7.114 5.822 taxS) - 23 - TABLE 6 Project Results A. Direct Benefits Indicators Appraisal Estimate Actual on Closing Date 1. Rehabilitation of 107.5 km 107.5 paved Roads 2. Construction of two 2 2 bridges 3. Regravelling of gravel 360 km 436 km roads 4. Upgrading from Earth 42 km 42 km to gravel 5. Improvement of 238 culverts and 120 culverts and Drainage 12 fords by 06188. 6 fords. 6. Weighbridges 2 2 - 24 - TABLE 6 B. Economic Impact ECONOMIC RATE OF RETURN ESTIMATE ESTIMATE COMPONENT AT APPRAISAL AT COMPLETION Rehabilitation of Paved Roads Project I (19.5 km stretch from 6 km north of Maseru to Masianokeng) 16.4Z 12.4Z Project II (88 km stretch from Leribe to 6 km north of Maseru) 22.7Z 31.1Z Regravelling 15.8Z 40.8Z Upgrading 16.2Z 16.9z - 25 - TABLE 7 Status of Covenants Covenant Section Status The Borrower shall employ consultants and experts whose 3.02 Complied with. qualifications are satisfactory to IDA. The Borrower shall (1) insure imported goods; and (ii) 3.03 Complied with. ensure that all proceeds are used exclusively for the purpose of the Project. The Borrower shall furnish IDA with plans, specifications, 3.04 Complied with. reports and contract documents for the Project. He shall maintain records and procedures adequate to monitor the project. He shall enable the Association representative to examine the goods and services financed out of the proceeds of the Credit. The Borrower shall furthermore, on a quarterly basis and within 30 days of the calendar quarter concerned, provide all such information as the Association shall reasonably request concerning the Project. The Borrower shall prepare a Project Completion Report 3.04 Complied with. not later than 6 months after the Closing Date. The Borrower shall ensure that land and land rights 3.05 Complied with. necessary for the execution of the Project are acquired in a timely fashion. The Borrower shall consult with IDA during the preparation 306 Complied with. of the 1986-90 Development Plan. The Borrower shall () undertake to construct Part B, 3.07 Complied with. Improvement of Gravel and Earth Roads, according to the programs set out in Schedule 4 of the Agreement; (Ii) Starting March 31, 1985, submit for IDA's approval, annual work programs for the bridges; and (i) carry out the works in accordance with this program. The Borrower shall not later than December 31, 1985, 3.08 The Consultant services complete a study on the Construction industry In Lesotho ended at draft final report (Part D (2)). stage. The Borrower shall maintain records and accounts that 4.01 Complied with, but with adequately reflect the financial status of the Project He significant delay. shall, for each fiscal year, provide IDA with audited accounts not later than six months after the end of such year. - 26 - TABLE 7 Covenat Section Statu The Borrower shall cause its road system to be adequately 4.02 There is a bacldog of maintained. He shall make budgetary allocations for road routine and periodic maintenance for FY84/85 of not less than M. 4,400,000 maintenance due to and shall thereafter make annual budgetary allocations at inadequate allocation of least equal to such amount in real terms. . funds for operating costs and as a result, roads are showing deficiencies. The Borrower shall cause its road maintenance equipment 4.03 Complied with. to be adequately maintained. - 27 - TABLE 8 Use of IDA/Bank Resources Missions Stage of Project Month/year Number of Days in Specialization Cycle Persons Field Represented Through Identification 04/81 1 10 HE Preparation 11/81 1 6 HE Preappraisal Appraisal 09-10/83 3 24 EC/HE/TE Negotiations 03/84 5 - LO/EC/HE/LC Supervision 1 10/84 2 9 HE/BE 2 06/85 1 8 HE 3 12/85 1 6 HE 4 06/86 1 6 HE 5 12/86 2 6 HE/HE 6 11/87 1 6 EC 7 02/89 1 10 HE 8 03/90 1 7 HE 9 10/91 1 5 HE HE - Highway Engineer EC - Economist TE - Technical Educator LO - Loan Officer LC - Lawyer BE - Bridge Engineer MAP SECTION 万