The World Bank BF-Transport Sector Modernization and Corridor Trade Facilitation Project (P156892) REPORT NO.: RES52211 RESTRUCTURING PAPER ON A PROPOSED PROJECT RESTRUCTURING OF BF-TRANSPORT SECTOR MODERNIZATION AND CORRIDOR TRADE FACILITATION PROJECT APPROVED ON JANUARY 12, 2017 TO BURKINA FASO TRANSPORT WESTERN AND CENTRAL AFRICA Regional Vice President: Ousmane Diagana Country Director: Clara Ana Coutinho De Sousa Regional Director: Ashish Khanna Practice Manager/Manager: Aurelio Menendez Task Team Leader(s): Monica Augustina Cristina Moldovan, Cheick Omar Tidiane Diallo The World Bank BF-Transport Sector Modernization and Corridor Trade Facilitation Project (P156892) ABBREVIATIONS AND ACRONYMS DPO Development Policy Operation ESIA Environmental and Social Impact Assessment GoBF Government of Burkina Faso IDA International Development Association IP Overall Implementation Progress PAMOSET Transport Sector Modernization and Corridor Trade Facilitation Project in Burkina Faso PIU Project Implementation Unit PDO Project Development Objective RTFCC Regional Trade Facilitation and Competitiveness Credit SOFIGIB Interbank Guarantee Company of Burkina Faso The World Bank BF-Transport Sector Modernization and Corridor Trade Facilitation Project (P156892) BASIC DATA Product Information Project ID Financing Instrument P156892 Investment Project Financing Original EA Category Current EA Category Partial Assessment (B) Partial Assessment (B) Approval Date Current Closing Date 12-Jan-2017 30-Jun-2022 Organizations Borrower Responsible Agency Burkina Faso Project Development Objective (PDO) Original PDO The proposed PDO is to improve the efficiency and safety of transport services on the Burkinabe section of the Ouagadougou (BurkinaFaso) - Abidjan (Ivory Coast) road transport corridor. OPS_TABLE_PDO_CURRENTPDO Summary Status of Financing (US$, Millions) Net Ln/Cr/Tf Approval Signing Effectiveness Closing Commitment Disbursed Undisbursed IDA-59410 12-Jan-2017 03-Mar-2017 29-Jun-2017 30-Jun-2022 20.00 16.73 3.71 Policy Waiver(s) Does this restructuring trigger the need for any policy waiver(s)? No The World Bank BF-Transport Sector Modernization and Corridor Trade Facilitation Project (P156892) I. PROJECT STATUS AND RATIONALE FOR RESTRUCTURING A. Update on overall project implementation 1. The Transport Sector Modernization and Corridor Trade Facilitation Project in Burkina Faso (PAMOSET) along the Abidjan Ouagadougou Corridor supports the objectives of the Regional Trade Facilitation and Competitiveness Credit (RTFCC) Development Policy Operation (DPO), together with a similar project in Cote d’Ivoire. The RTFCC DPO series directly supports joint efforts by the Burkinabé and Ivorian Governments to reduce trade and transport costs, in order to improve the competitiveness of the tradable sectors of the economy. The US$25 million PAMOSET project is financed through an IDA Credit of US$20 million and counterpart funding of US$5 million. 2. The PAMOSET Project Development Objective (PDO) is to improve the efficiency and safety of transport services on the Burkinabe section of the Ouagadougou – Abidjan road transport corridor. The main project activities are: (i) the institutional support of transport operators and government technical services to comply with the new reform related to the professionalization of the transport sector, (ii) the renewal of about 150 old heavy cargo trucks, (iii) the modernization of customs and trade facilitation, and finally (iv) the improvement of road safety along the corridor. Progress towards achieving the PDO is rated Moderately Unsatisfactory because, with one month until project closing, the remaining timeline for the implementation of the truck fleet renewal mechanism under Component 2 – and the renewal of the 150 trucks - is not sufficient. Similarly, the overall Implementation Progress (IP) is rated Moderately Unsatisfactory because of the delays related to the progress of the renewal of the vehicle fleet, the recruitment of the scrapping operator and the implementation of recommendations from the road safety inspection. 3. The capacity building activities under Component 1 - Institutional strengthening and capacity building support for public and private sector participants in the transport sector have been implemented. The main activities for the subcomponent " support to transport operators" are finalized, with multiple training activities already executed (e.g. training in Morocco, Cote d’Ivoire and France for representatives of the General Directorate of Land and Maritime Transport, Burkina Shippers’ Council, and Chamber of Commerce and Industry – Burkina Faso). Moreover, the validation of the legal framework and the signature of the regulatory texts for the elaboration of the technical training repositories, which represent the key activity of this component, was done in May 2022. Following this, 698 certificates were awarded to participants (transport firm managers and drivers) which completed the trainings based on the recently approved curriculum. 4. Component 2 - Development of a heavy cargo truck renewal scheme, which holds 64 percent of the project's budget (including the counterpart funds), has experienced delays in the operationalization of the truck fleet renewal scheme in the first years of implementation due to the availability of studies to set up the truck fleet renewal mechanism as well as the identification of a vehicle scrapping operator. Key advancements that were achieved to date are: (i) the availability of a manual (final version) defining the set-up and procedures of the truck fleet renewal mechanism, (ii) a convention is signed between the Government of Burkina Faso (GoBF) and the Interbank Guarantee Company of Burkina Faso (SOFIGIB) in order to facilitate access to credit for operators to purchase new trucks to replace old ones, (iii) in June 2020, the disbursement of the US$10 million IDA financing for the first loss guarantee, (iv) the selection of truck dealers for the provision of new/used truck, and (v) in October 2021 the launch of the truck fleet renewal mechanism. Moreover, to meet the deadline for the scrapping of 150 vehicles, in the beginning of 2021 the GoBF has identified CIM-METAL as the scrapping operator to be included in the project, for which an environmental and social audit for CIM-METAL operations was finalized in May 2022. This is in addition to identifying a potential site for vehicles scrapping beyond the implementation timeline of the PAMOSET, for which environmental and social studies were carried out, validated by the National Bureau of Environmental Assessments and reviewed by IDA. Remaining activities on the critical path are: (i) the The World Bank BF-Transport Sector Modernization and Corridor Trade Facilitation Project (P156892) availability of the scrapping premium to be paid by the government (the down payment for the truck loan), and (ii) the signing of a convention between GoBF and CIM-METAL. 5. Component 3 - Support to customs modernization and trade facilitation on the Burkinabe section of the Corridor is advanced as the interconnection of the customs administrations of Burkina Faso and Cote d’Ivoire of their information systems has been effective in February 2019 thanks to the technical assistance of the project. The technical assistance has provided financing for the operationalization of the Automated System for Customs Data (ASYCUDA) of the two countries, including transfer of knowledge to customs information communications technology (ICT) staff, and the bilateral meetings between the two customs. 6. Several activities financed under Component 4 - Road safety on the Burkinabe section of the Corridor have progressed well, despite initial delays in finalizing the purchase of equipment and delays in the recruitment process of consultants to carry out relevant studies. All the terms of reference, as well as the training and sensitization campaign budget have been reviewed and authorized by the World Bank for implementation. Many trainings and sensitization campaigns have been undertaken, and the equipment for road accident monitoring has been purchased and most of it installed and operational. However, there were substantive delays with the final version of the report summarizing the analysis done and recommendations of the road safety inspection. This activity one of the key ones for the road safety component, and was carried out on the Burkinabe section of the Ouagadougou- Abidjan road corridor in 2020. B. Rationale for restructuring The World Bank BF-Transport Sector Modernization and Corridor Trade Facilitation Project (P156892) 7. Based on the implementation support missions over the past year, it was assessed together with the implementing agencies that several changes are needed to meet the PDO, namely: (i) to extend the implementation timeline for the truck fleet renewal activity by 6 months to account for the approximately 4 months suspension of disbursements due to political instability, (ii) to better align the PDO indicators with the project funded activities, (iii) to reallocate part of the funding between disbursement categories. 8. Political Instability. The implementation of the project was negatively affected by the military coup of January 2022 which tigered OP 7.30. Disbursements were paused for about 4 months and no government was in place for about 2 months to take a decision about the project. Because of the political instability mentioned before, it took a long time to renew the mandate of the committee in charge of examining the applicants’ files and verifying the eligibility criteria for transporters for the fleet renewal program. Therefore, an additional 6 months is needed to complete the 2 remaining activities which are crucial for the project to meet its development objectives, as specified by the June 16, 2022 request from the Ministry of Economy and Finance. 9. Fleet Renewal. The fleet renewal mechanism has been officially launched on October 25, 2021. However, 6 months after the launch of subscriptions, only 38 firms submitted their applications, of which one application was approved by a commercial bank. In addition to the overall political instability, the cause of this low participation seems to also be linked to one of the criteria for accessing the program, as well as delays in the processing of the requests. The April-May 2022 technical mission held several meetings with the various actors involved in the renewal process (SOFIGIB, DGTTM, SP/PST), and participated in the working lunch with transport operators organized on May 5, 2022, led by the Minister in charge of Transport. Based on the analysis data on the weaknesses of the program, several corrective measures were agreed to be implemented until end July 2022 (among which the recruitment of a consulting firm to assist transporters with the business plan and the required documentation, revising the procedure manual to increase the credit ceiling) to ensure that the PDO will be satisfactorily achieved within an additional 6 months. 10. PDO Level Indicators change. The current project road safety activities which are focused on sensitization, acquisition of radars and installation of traffic signs are not sufficient to impact the number of fatalities along the Burkinabe section of the corridor which is the most trafficked corridor of the country. The road safety audit using iRAP methodology has concluded that most of the sections of the corridor are rated between 5-star and 4-star which are not recommended for a corridor, and it would take major investments to reduce the road safety risk and improve most of the sections to 1-2 stars. Given that the project budget and type (technical assistance) is not adequate to implement the audits recommendations, the project will only focus on activities which can be implemented within 6 months to improve road safety measures along the corridor. Similarly, the project does not have any activities which will impact the “Average cost of transporting a 40 foot container by road from Ouagadougou to Abidjan”, and it was agreed that the indicator will be dropped. 11. In light of this, on March 3, 2021, IDA received a request from the Ministry of Economy, Finance, and Development of Burkina Faso to restructure the project to: (i) reduce the national counterpart funding amount from US$ 5 million to US$ 3 million, which represents the amount strictly necessary for the scrapping mechanism1, (ii) reallocate approximately US$ 1.9 million (approximately Euros 1.6 million) from Category 2 to Category 1; and (iii) adjust the results framework. II. DESCRIPTION OF PROPOSED CHANGES 1A request was made on May 31, 2022 by the Ministry of Transport to the Ministry of Economy to allocate the full counterpart funding for the PAMSOET. Based on the request of the Project Implementation Unit on June 23, 2022, the change in the amount of the national counterpart funding was not considered for the present restructuring. The World Bank BF-Transport Sector Modernization and Corridor Trade Facilitation Project (P156892) 12. Change in Project Closing Date. This restructuring paper seeks the approval of the Country Director for a proposed 6-month extension of the closing date from June 30, 2022, to December 31, 2022. 13. Change in the Results Framework2. In view of GoBF March 2021 request, and as agreed during the March - April 2021 virtual implementation support mission, some of the indicators and targets will be revised to better align them with the activities under the project, and to more accurately reflect implementation progress. The proposed changes as detailed in the Results Framework in the project datasheet. Specifically, this restructuring paper seeks the approval of the country director to: a) drop the PDO level indicator “number of fatalities on the Burkinabe portion of the corridor (number)” and add a new PDO level indicator “percentage of missing traffic signs replaced per section on the Burkinabe portion of the corridor”. This PDO indicator is proposed to be deleted because the activities financed under the project do not have a direct immediate impact on the death rate on the corridor. b) drop the PDO level indicator “average cost of transporting a 40 foot container by road from Ouagadougou to Abidjan (US$) (Amount(USD))”. This PDO indicator is proposed to be deleted because there are too many factors that can influence this indicator and there are no direct activities in the project that can contribute to reduce the cost of transporting a 40 foot container in the corridor. 14. Reallocation of funds between disbursement categories. This restructuring paper also seeks the approval of the country director to reallocate approximately US$ 1.9 million (approximately Euros 1.6 million) from Category 2 of Eligible Expenditures to Category 1. During the implementation of the project, additional studies and activities not initially foreseen under Sub-component 2A: Technical assistance required to put in place an operational framework for a truck fleet renewal program as well as for the recovery and recycling of decommissioned trucks and under Sub-component 2C: Support operation of technical committee for the implementation of the financial mechanism and for management of old unsafe trucks scrapping scheme, proved necessary for the substantial achievement of the PDO. To ensure continuation of activities under Component 2, funds totaling US$ 1.9 million (approximately Euros 1.6 million; the exact amount is as indicated in Client connection) currently available from Category 2 (Goods, non-consulting services, consultants’ services, Training, and Operating Costs for Part 2(b-ii) under the project) will be reallocated to Category 1 (Goods, non-consulting services, consultants’ services, Training, and Operating Costs for the Project except Part 2(b-ii)). Savings on Category 2 expenditures were gained as all studies and technical assistance to support the establishment of a truck renewal scheme were completed, hence a part of funds previously allocated for that activity (equivalent to US$12.17 million) can now be used to fund other project activities under Component 2. 15. The Financing Agreement for Burkina Faso is therefore amended to include: (i) the reallocation of funds between disbursement categories; and (ii) the extension of the closing date by 6 months. 2The preliminary findings of the Implementation Completion Report for the PAMOSET – Transport Sector Modernization and Corridor Trade Facilitation Project (P156900) in Cote d’ Ivoire, listed as a missed opportunity the fact that the project did not use project restructuring to better align the results indicators framework (which is similar to the one for the present project in Burkina Faso). The World Bank BF-Transport Sector Modernization and Corridor Trade Facilitation Project (P156892) 16. This is the second request for project restructuring, and the first closing date extension request. There are no changes to the PDO or safeguard category, and the project does not require any policy waivers. The Task Team thus confirms that the requirements of paragraph 42 of the BP10.00 have been met, and specifically that, (a) the project development objectives continue to be achievable; (b) the performance of the Borrower remains satisfactory; (c) the Bank and the Borrower agree on actions that will be undertaken by them to complete the Project. 17. Based on the request of March 3, 2021, a restructuring dated January 2022 had been initiated and approved by the World Bank management, but was not signed for several months due to the political situation in country and absence of government, as described in the para 8 above. Consequently, the January 2022 restructuring is considered as dropped and replaced by the present restructuring which includes only (i) an extension to the project closing date, (ii) the reallocation of funds between disbursement categories, and (iii) changes to the results framework. III. SUMMARY OF CHANGES Changed Not Changed Results Framework ✔ Loan Closing Date(s) ✔ Reallocation between Disbursement Categories ✔ Implementing Agency ✔ DDO Status ✔ Project's Development Objectives ✔ PBCs ✔ Components and Cost ✔ Cancellations Proposed ✔ Disbursements Arrangements ✔ Disbursement Estimates ✔ Overall Risk Rating ✔ Safeguard Policies Triggered ✔ EA category ✔ Legal Covenants ✔ Institutional Arrangements ✔ Financial Management ✔ The World Bank BF-Transport Sector Modernization and Corridor Trade Facilitation Project (P156892) Procurement ✔ Implementation Schedule ✔ Other Change(s) ✔ Economic and Financial Analysis ✔ Technical Analysis ✔ Social Analysis ✔ Environmental Analysis ✔ IV. DETAILED CHANGE(S) OPS_DETAILEDCHANGES_LOANCLOSING_TABLE LOAN CLOSING DATE(S) Original Revised Proposed Proposed Deadline Ln/Cr/Tf Status Closing Closing(s) Closing for Withdrawal Applications IDA-59410 Effective 30-Jun-2022 31-Dec-2022 30-Apr-2023 OPS_DETAILEDCHANGES_REALLOCATION _TABLE REALLOCATION BETWEEN DISBURSEMENT CATEGORIES Financing % Current Allocation Actuals + Committed Proposed Allocation (Type Total) Current Proposed IDA-59410-001 | Currency: EUR iLap Category Sequence No: 1 Current Expenditure Category: GDS,NCS,CS,TRG,OC expt Part2(b) 9,915,304.05 5,502,342.89 9,915,304.05 100.00 100.00 iLap Category Sequence No: 2 Current Expenditure Category: GDS,NCS,CS,TRG,OC for Part2(b) 8,384,695.95 8,384,695.95 8,384,695.95 69.00 69.00 Total 18,300,000.00 13,887,038.84 18,300,000.00 . The World Bank BF-Transport Sector Modernization and Corridor Trade Facilitation Project (P156892) . Results framework COUNTRY: Burkina Faso BF-Transport Sector Modernization and Corridor Trade Facilitation Project Project Development Objectives(s) The proposed PDO is to improve the efficiency and safety of transport services on the Burkinabe section of the Ouagadougou (BurkinaFaso) - Abidjan (Ivory Coast) road transport corridor. Project Development Objective Indicators by Objectives/ Outcomes RESULT_FRAME_TBL_PDO Indicator Name PBC Baseline Intermediate Targets End Target 1 2 3 4 5 Improve efficiency of transport services on Burkinabé section of Ouaga-Abj road transport corridor Average cost of transporting a 40 foot container by road from 3,800.00 3,800.00 3,800.00 3,500.00 3,500.00 3,350.00 Ouagadougou to Abidjan (US$) (Amount(USD)) Rationale: This PDO indicator is proposed to be deleted because there are too many factors that can influence this indicator and there are no direct activities in the project Action: This indicator has that can contribute to reduce the cost of transporting a 40 foot container in the corridor. been Marked for Deletion This indicator will be replaced by “ Number of transport companies professionalized through the project” which is a more accurate indicator to show the outcome of the project regarding to professionalization of transport sector. Average transit time to Ouagadougou after exiting 72.00 72.00 72.00 65.00 60.00 50.00 border post (Niangologo) with CI (Hours) (Hours) Action: This indicator has Rationale: been Marked for Deletion The World Bank BF-Transport Sector Modernization and Corridor Trade Facilitation Project (P156892) RESULT_FRAME_TBL_PDO Indicator Name PBC Baseline Intermediate Targets End Target 1 2 3 4 5 This PDO indicator will be replaced by “Time required to cross the border at Niangologo (hours)” (which was previously an intermediate results indicator). This is because too many factors can influence the average transit time on the corridor and it would be difficult to notice the progress due to the project. Direct project beneficiaries(Number) 0.00 3,000.61 3,000.75 3,000.89 4,030.00 4,170.00 4,170.00 (Core) (Number (Thousand)) Rationale: Action: This indicator has End target date updated to December 31, 2022 been Revised Female beneficiaries (Percentage) sub Type: 0.00 0.00 50.19 50.18 50.16 50.14 50.14 Supplemental (Core) (Percentage) Rationale: Action: This indicator has End target date updated to December 31, 2022 been Revised CO2 emissions reduction per annum by scrapping 150 trucks and replacing 0.00 0.00 0.00 0.00 0.00 0.00 8,000.00 them with an equivalent number of new trucks (tCO2) (Tons/year) Rationale: Action: This indicator has End target date updated to December 31, 2022; intermediate targets updated based on the new planning. been Revised Number of transport 0.00 0.00 0.00 0.00 0.00 72.00 150.00 companies professionalized The World Bank BF-Transport Sector Modernization and Corridor Trade Facilitation Project (P156892) RESULT_FRAME_TBL_PDO Indicator Name PBC Baseline Intermediate Targets End Target 1 2 3 4 5 through the project (Number) (Number) Rationale: Action: This indicator is Replaces the PDO Indicator “Average cost of transporting a 40 foot container by road from Ouagadougou to Abidjan (US$)”. Intermediate targets updated New based on the new planning. Border Crossing time at Niangologo (CI/BF border) 10.00 10.00 10.00 10.00 3.00 3.00 3.00 (Hours) (Hours) Rationale: Action: This indicator is This is a more accurate indicator to show the outcome of the project New Improve safety of transport services on Burkinabé section of Ouaga-Abj road transport corridor Number of fatalities on the Burkinabe portion of the 80.00 50.00 Corridor(Number) (Number) Rationale: Action: This indicator has This PDO indicator is proposed to be deleted because the activities financed under the project do not have a direct immediate impact on the death rate on the been Marked for Deletion corridor. Missing/damaged traffic signs replaced per section 0.00 0.00 0.00 0.00 0.00 0.00 53.00 on the Burkinabe portion of the corridor (Percentage) Action: This indicator is Rationale: New This is a more accurate indicator to based on the activities of the project. The World Bank BF-Transport Sector Modernization and Corridor Trade Facilitation Project (P156892) RESULT_FRAME_TBL_PDO Indicator Name PBC Baseline Intermediate Targets End Target 1 2 3 4 5 PDO Table SPACE Intermediate Results Indicators by Components RESULT_FRAME_TBL_IO Indicator Name PBC Baseline Intermediate Targets End Target 1 2 3 4 5 6 Institutional strengthening and capacity building support for public and private sector participants in the transport sector Instructors trained in accordance with new 0.00 0.00 15.00 40.00 65.00 90.00 90.00 standards (Number) Rationale: Action: This indicator has End target date updated to December 31, 2022 been Revised Percentage of heavy vehicles fleet managers trained in accordance 0.00 0.00 0.00 15.00 30.00 50.00 50.00 with new standards of training (Percent) (Percentage) Rationale: Action: This indicator has End target date updated to December 31, 2022 been Revised Heavy vehicles fleet managers awarded a CPC 0.00 0.00 0.00 0.00 0.00 200.00 200.00 (Number) The World Bank BF-Transport Sector Modernization and Corridor Trade Facilitation Project (P156892) RESULT_FRAME_TBL_IO Indicator Name PBC Baseline Intermediate Targets End Target 1 2 3 4 5 6 Rationale: Action: This indicator is This is a more accurate indicator to show the outcome of the project New Development of a heavy cargo truck renewal scheme Number of new long haul trucks put in service 0.00 0.00 0.00 0.00 0.00 0.00 150.00 (Number) (Number) Rationale: Action: This indicator has End target date updated to December 31, 2022; Intermediate targets updated based on the new planning. been Revised Support to customs modernization and trade facilitation on the Burkinabe section of the Corridor Border Crossing time at Niangologo (CI/BF 10.00 10.00 10.00 10.00 10.00 3.00 3.00 3.00 border) (Hours) Action: This indicator has Rationale: been Marked for This intermediate indicator will replace the PDO Indicator “Average cost of transporting a 40 foot container by road from Ouagadougou to Abidjan (US$)”. Deletion Electronic transmission of transit document collected by Burkinabé customs is provided in No No No No Yes Yes Yes real-time to CI Customs(Yes/No) (Yes/No) Action: This indicator has Rationale: been Revised End target date updated to December 31, 2022 The World Bank BF-Transport Sector Modernization and Corridor Trade Facilitation Project (P156892) RESULT_FRAME_TBL_IO Indicator Name PBC Baseline Intermediate Targets End Target 1 2 3 4 5 6 Customs clearance time at destination 10.00 10.00 10.00 10.00 10.00 6.00 6.00 (Ouagadougou) (Hours) Rationale: Action: This indicator has End target date updated to December 31, 2022 been Revised Identified operators to be certified as AEO in place No No No No Yes Yes Yes (Yes/No) Rationale: Action: This indicator has End target date updated to December 31, 2022 been Revised Partnerships with CSOs/CBOs established to provide feedback on progress in addressing No No Yes Yes Yes Yes Yes illegal practices on the Burkinabe section of the Corridor (Yes/No) Rationale: Action: This indicator has End target date updated to December 31, 2022 been Revised Decrees to implement the AEO status are No No No No No No Yes available (Yes / No) (Yes/No) (Yes/No) The World Bank BF-Transport Sector Modernization and Corridor Trade Facilitation Project (P156892) RESULT_FRAME_TBL_IO Indicator Name PBC Baseline Intermediate Targets End Target 1 2 3 4 5 6 Rationale: Action: This indicator is Indicator better aligned with the project activities. New IO Table SPACE The World Bank BF-Transport Sector Modernization and Corridor Trade Facilitation Project (P156892)