ICRR 13058 Report Number : ICRR13058 IEG ICR Review Independent Evaluation Group 1. Project Data: Date Posted : 03/23/2009 PROJ ID : P050623 Appraisal Actual Project Name : Ghana Road Sector US$M ): Project Costs (US$M): 1191 1191 Development Program Country : Ghana Loan/ US$M): Loan /Credit (US$M): 220 265 Sector Board : TR Cofinancing (US$M): US$M ): Sector (s): Roads and highways (81%) Central government administration (16%) Health (3%) Theme (s): Access to urban services and housing (40% - P) Pollution management and environmental health (20% - S) Decentralization (20% - S) Other urban development (20% - S) L/C Number : C3554 Board Approval Date : 07/26/2001 Partners involved : Closing Date : 06/30/2006 06/27/2008 Evaluator : Panel Reviewer : Group Manager : Group : Kavita Mathur Peter Nigel Freeman Monika Huppi IEGSG 2. Project Objectives and Components: a. Objectives: According to the Project Appraisal Document (PAD), the development objective of the Ghana Roads Sector Development Program was to achieve sustainable improvements in the supply and performance of roads and road transport services in a regionally equitable manner. According to the Loan Agreement (LA), the objectives of the project were to: (i) finance a three year segment of the program; (ii) achieve sustainable improvements in the performance of the trunk roads, feeder roads, urban roads, and road transport services in all regions of the Borrower; (iii) strengthen the capacities for management and implementation in the road sector; and (iv) establish management systems that will ensure the upgrading and preservation of an improved road system in an environmentally, socially and financially sustainable fashion. The PAD objectives are phrased in a very general manner while in the LA an attempt was made to make them tighter without compromising the intention Therefore, for this review the objectives from LA are taken. b.Were the project objectives/key associated outcome targets revised during implementation? No c. Components (or Key Conditions in the case of DPLs, as appropriate): The project was the national program for the entire roads sub-sector over the period 2001 to 2004, to be executed by the Ministry of Roads & Highways (MRH), its two road agencies: Department of Feeder Roads (DFR) and Department of Urban Roads (DUR); and Ghana Highways Authority (GHA). The program included the following six components (of which IDA was to finance elements of components 2 through 6). The PAD states that the appraisal figures were indicative only since this is a rolling program linked to the Medim-Term Expenditure Framework (MTEF). The ICR reports actuals for the Bank financed portion of the components as the reporting for the entire program (which was financed by the Government and through parallel financing by other donors) was not feasible. Component 1: Routine Maintenance (indicative costs US$101.4 million, no Bank financing and entirely government funded) - patching of potholes; light grading; grass cutting; tree and bush clearing along the roadside; and cleaning of gutters, drains and culverts. The annual target was an average of 27,250 km of all types of roads ). Component 2: Periodic Maintenance, Minor Rehabilitation and Minor Upgrading ((indicative costs US$416.0 million, Bank appraisal estimate US$57.5 million; actual Bank contribution US$77.6 million) - spot improvement; repair and resurfacing of short stretches of roads; repair of drains, culverts and slopes; regraveling; resealing; and minor upgrading of gravel to bituminous roads. Component 3: Major Rehabilitation, Reconstruction and Upgrading ((indicative costs US$559.2 million, Bank appraisal estimate US$119.0 million; actual Bank contribution US$125.1 million) - reconstruction of heavily degraded road sections; upgrading from one surface type to another; placing asphalt concrete overlays; and repair and construction of bridges, culverts, and other structures. Component 4: Traffic Management and Safety ((indicative costs US$11.0 million, Bank appraisal estimate US$2.6 million; actual Bank contribution US$3.3 million) - strengthening the National Road Safety Commission (NRSC) and Driver and Vehicle Licensing Authority (DVLA); developing a comprehensive road safety strategy and implementation program; and setting standards for safety, reliability, and efficiency in the transport sector. Component 5: Institutional Strengthening ((indicative costs US$55.4 million, Bank appraisal estimate US$38.4 million; actual Bank contribution US$48.8 million)- policy and institutional reforms (including strengthening of environmental management, decentralization, development of a national transport strategy encompassing rural and urban transport, and road safety); studies; training; technical assistance; and provision of buildings, vehicles and equipment. Component 6 : Program Operation ((indicative costs US$48.0 million, Bank appraisal estimate US$2.5 million; actual Bank contribution US$5.8 million)- planning, management, coordination and reporting for the 4-year road development program by the participating agencies. The project components were not revised during the implementation period. However, financial allocation from the IDA credit to the different components changed. d. Comments on Project Cost, Financing, Borrower Contribution, and Dates: Project Cost & Financing: Although APLs are used for programmatic approaches in many African countries, Ghana prefers to use the SIL. The ICR reports actuals for the Bank financed portion of the components as the reporting for the entire program (which was financed by the Government and through parallel financing by other donors) was not feasible. In a meeting between IEG and the project Task Team Leader (TTL), the TTL mentioned that the total costs were same as the appraisal estimate. The TTL also mentioned that the there was parallel financing by a large number of donors. The actual credit was US$265 million, higher than the original credit of US$220 million due to exchange rate fluctuations. In SDR terms the original credit was US$175.3 million and this amount was fully disbursed. Borrower Contribution: The Borrower contributed US$978 million, significantly higher than the appraisal commitment of US$226 million. Dates: The project was completed two years behind schedule due to an initial delay of ten month while the new Government familiarized itself with the program. During this period the Bank also disbursed the US$45 million used for feeder and urban roads which was realized from exchange rate savings from the credit . 3. Relevance of Objectives & Design: The project objectives were consistent with the March 2000 Country Assistance Strategy (CAS). which aimed at reducing the incidence of poverty through increased growth and to create gainful employment opportunities.By reducing transport costs through timely maintenance, rehabilitation and reconstruction of roads; the project was expected to increase Ghana's competitiveness in foreign trade and promote linkages in domestic markets. These linkages were expected to decrease the cost of access by the poor, and particularly women, to social services, markets and economic opportunities. The project objectives remained consistent with the current CAS (2007) which aimed at improving transport links .Priorities include: achieving a better balance between investment and expenditure on maintenance; providing better links between rural areas and markets and service centers through rural feeder roads; and strengthening sector management through an integrated transport policy and strategic plan. The project objectives were consistent with Ghana’s priorities for the road sector which are reflected in the "Roads and Transport Strategy" document. The strategy stems from the Government's Road Sector Policy Letter (1996) and Letter of Sector Policy (2001). The project was developed as a programmatic approach - whereby funds were to be allocated according to economic criteria and all expenditures would be tracked in an integrated financial management system. The project was large - encompassing Ghana's entire roads program including highways, feeder and urban roads; and required coordination between several implementation agencies and a large number of development partners. The Bank intention was to develop one Project Implementation Plan for the program that would apply to all sources of funds, but this proved difficult with the large number of donors because of differing donor objectives, criteria and funding cycles. The design of the project was based on detailed technical reviews and lessons from previous highways projects in Ghana were incorporated into it. Major risks and mitigation measures were identified; adequate monitoring systems and related tools were established from the onset; financial and economic analyses were conducted; and safeguards issues were properly covered and were based on an appropriate participatory process and full disclosure. Overall, the relevance of the project was substantial. 4. Achievement of Objectives (Efficacy): Finance a three year segment of the program : substantially achieved About ninety-eight percent (98 percent) of the IDA credit was allocated to three implementing agencies to support civil works covering maintenance, rehabilitation and reconstruction, traffic management and road safety, and institutional strengthening. A satisfactory level of achievement was recorded in the key area of civil works and institutional strengthening and capacity building. Achieve sustainable improvements in the performance of the trunk roads, feeder roads, urban roads, and road transport services in all regions of the Borrower : substantially achieved. The condition of the road network improved but the planned targets were not achieved. At project closing the condition of the road network in good condition improved from 29% (baseline) to 39% but was far lower than the planned target of 59%. The condition of the road network in poor condition decreased from 44% to 32%, but the target of 12% was not met. For the network in fair condition, the target of 27% was met. Although the network condition was improved in absolute length as planned, the proportions fell short because of an increase in the network size At appraisal, the length of the road network as reported in 2002 did not fully account for a sizeable feeder roads network because the data base available was not complete. With improvements in technology, particularly GIS capability it became possible to map and monitor the available network exhaustively, resulting in an increase in reported length of the network. Also, for achieving MDG goal of Rural Accessibility Index, some inaccessible areas were added. The findings from the Impact Monitoring Study suggest substantial impacts from the project investments. These include: reduction in travel times to educational and health facilities by 14 percent and 18 percent respectively; reduction in waiting times for commuters by five times; increase in major farm produce prices by a minimum of 50 percent; and an increase of 42 percent average contact of farmers to extension service providers. While some gains have been realized in traffic management and safety, the fatality rate still remains high and efforts are continuing to reduce the number of road accidents and fatalities. Strengthen the capacities for management and implementation in the road sector : substantially achieved. To strengthen the institutional capacities for management and implementation in the roads sector the project assisted in developing external and internal training programs such as: (i) a Masters program in road transport engineering at the Kwame Nkrumah University of Science and Technology (KNUST): (ii) the twinning of the Engineering College of KNUST with the Indian Institute of Technology in Chennai, India; and (iii) a post-graduate program in road and transport engineering for the public and private sectors in West Africa sub region with support from the University of Birmingham, United Kingdom. A total of 35 engineers have been enrolled in the Masters program. The following studies were completed: (i) road fund management and financing; (ii) axle load control; (iii) domestic construction capacity; and (iv) public private partnership possibilities in the road sector. An action plan was developed and the recommendations of these studies are expected to be implemented under the Transport Sector Development Program. The capacity to formulate policies and undertake relevant studies has improved. For example, the Transport Policy was prepared internally by the MRH staff. By project closing, external consultants were no longer being used to support financial and project management. However, with respect to procurement capacity, there remain a few challenges as internal mobility of staff is quite high. So when the recipient of procurement training moves from his position, a gap is left. The ICR notes that most of the staff trained under the project have been retained within the sector as the training has been designed to solve specific sector needs. In 2006-07, about 98% of the works were carried out by contract. Establish management systems that will ensure the upgrading and preservation of an improved road system in an environmentally, socially and financially sustainable fashion : substantially achieved. The project improved capacity of MRH and GHA to plan and manage highway network through widespread training in the use of Highway Design and Maintenance (HDM) model. The Bank provided hands on training in safeguards instrument preparation to the environmental desks of GHA and DUR. For the Ghana Urban Transport Project, the safeguards documents (Environmental and Social Management Framework and Resettlement Rehabilitation Framework) were prepared by DUR and were rated good practices by the Banks Africa Safeguards Policy Enhancement (ASPEN) team. The Environmental and social assessment regulation and procedures are being incorporated in contract agreements. The MOT developed a workplace policy to guide in-house HIV/AIDS activities. 5. Efficiency (not applicable to DPLs): At appraisal, HDM-3 model was used for the Priority Trunk Road rehabilitation and maintenance program. A total of 1,078 km of road were examined. For the Feeder Roads Program the HDM model was not used, and instead the model was adapted to these low volume roads, which included transport cost savings. A total of 641 km of road were assessed. For very low volume roads, a distributional or regional weight on benefits was applied to ensure certain social/basic access objectives are captured in the analysis. For the Urban Roads Program, methodology similar to the Feeder Roads were employed with consideration of the income levels of the targeted beneficiaries. Economic Rates of return (ERRs) ranged from 15% to over 90% for the National Priority Route Program. The ERRs for the Feeder and Urban Roads Programs were well above 20%, with most over 40%. The ex-post ERRs varied between 24 percent and 167 percent for the national highway network (GHA roads), between 50 percent and 110 percent for urban roads network (DUR roads), and between 29 percent and over 100 percent for feeder roads (DFR roads). Although there were significant delays in project implementation, the ERRs of the project investments were significantly higher than the appraisal estimates. ERR )/Financial Rate of Return (FRR) a. If available, enter the Economic Rate of Return (ERR) FRR ) at appraisal and the re- re -estimated value at evaluation : Rate Available? Point Value Coverage/Scope* Appraisal No ICR estimate No * Refers to percent of total project cost for which ERR/FRR was calculated. 6. Outcome: The objectives of the project remained substantially relevant throughout the life cycle of the project and the project made a substantial contribution towards the development of Ghana’s road sector. The quality and quantity of roads in both the urban and rural areas improved considerably; financing of road maintenance was made more sustainable through appropriate road user charges; and travel time to major markets and health facilities declined. The efficacy of the project was substantial and economic rates of return were higher than estimated at appraisal. The overall outcome of the project is rated satisfactory. a. Outcome Rating : Satisfactory 7. Rationale for Risk to Development Outcome Rating: The risk to development outcome is considered moderate because although the capacity to plan and manage the roads network has considerably increased and a National Transport Policy was prepared there is moderate risk regarding the funding for road maintenance. The total inflow into the road fund has increased from US$51 million in 2002 to US$125 million in 2007. However, this is sufficient to meet 90% of routine maintenance needs and only partially the periodic maintenance needs (about 50%) of the road network. a. Risk to Development Outcome Rating : Moderate 8. Assessment of Bank Performance: Quality-at-Entry was satisfactory (see section 3). Major risks and their mitigation measures were identified; adequate monitoring systems was established at the onset; financial and economic analyses were conducted and safeguards issues were adequately covered. The Quality of Supervision was also satisfactory. The Bank undertook annual supervision with Road Sector Development Partners and Ghanaian counterparts and there was effective dialogue with the Government. The field staff allowed for more continuous monitoring and participation in the monthly government/development partner road sector meetings. Initially the monitoring of indicators was inconsistent and implementation of social safeguards was inadequate. The Bank conducted a Mid Term Review of the project in April 2005 and based on the findings of the MTR a Monitoring and Evaluation Unit within the Ministry was established. Moreover, in order to address the social safeguards issues, a resettlement audit was commissioned. The audit was completed in February 2007 and an action plan was prepared and implemented satisfactorily by April 2008 (see section 11). According to the TTL, QAG's review of AAA activities in Ghana rated only the transport sector as satisfactory and in some instances even highly satisfactory. at -Entry :Satisfactory a. Ensuring Quality -at- b. Quality of Supervision :Satisfactory c. Overall Bank Performance :Satisfactory 9. Assessment of Borrower Performance: Government Performance: The Ministry of Transportation was a strong partner in sector reform and successfully led the dialogue with the Development Partners and played a strong coordination role between all stakeholders. The organization of annual road sector development partner meetings created a basis for all stakeholders to periodically review and confirm the direction of the sector. The Borrower contributed US$978 million, significantly higher than the appraisal estimate of US$226 million.The Government Performance is rated satisfactory. Implementing Agency Performance: There were three main implementing agencies: Ghana Highway Authority (GHA), Department of Urban Roads (DUR), and Department of Feeder Roads (DFR). GHA supervised, monitored and implemented the project quite adequately. The capacity for timely resolution of implementation issues by DUR was satisfactory. Improvements were noted in financial management, governance, provision of counterpart funding, and in compliance with covenants. However, in procurement matters DUR’s performance could have been better.Although the DFR lacked the required number of staff with the requisite skills to support the project implementation, some staff of the DFR went on training tours and postgraduate training in universities within and outside to upgrade skills and knowledge in support of the project. Overall, the implementing agencies performance is rated satisfactory. a. Government Performance :Satisfactory b. Implementing Agency Performance :Satisfactory c. Overall Borrower Performance :Satisfactory 10. M&E Design, Implementation, & Utilization: M&E design is rated modest. Most indicators were output oriented, these included kilometers of roads maintained, road network condition, reduction in average travel time, compliance with axle load limitations, reduction in fatality rates, and increase in fuel levy. Baseline data was gathered and targets were set. M&E Implementation is rated substantial. The indicators were expanded informally, in discussions with government and other development partners, to reflect the emerging sector priorities and the need to measure the “outcome� impact more broadly. Moreover, indicators for measuring the impact of transport sector on achievement of the Millennium Development Goals (MDGs) were also included. Based on the Mid-term Review recommendation, a Monitoring and Evaluation Unit was established in the Ministry. Reporting was consolidated in a single quarterly report covering all major donors to the road sector. M&E Utilization is rated high. The annual sector meetings involving the Government and its development partners were used as a basis for reflection on achievement of targets and planning the way forward. The MOT, together with Ghana Statistical Service with support from DANIDA has set up a transport indicators and data management initiative. The program is expected to serve as a reliable and sustainable one-stop shop for all transport related data and performance indicators. a. M&E Quality Rating : Substantial 11. Other Issues (Safeguards, Fiduciary, Unintended Positive and Negative Impacts): Safeguards: At appraisal the project was assigned Environmental Category A. No new construction was intended except where linkage to the next level road had been identified. An Environmental Impact Assessment (EIA) of the program was undertaken. GHA Environment Unit was expected to implement and monitor environmental and social mitigation measures. A Resettlement Action Plan (RAP) was also prepared. The Environmental and Resettlement/Compensation Framework was disclosed to the public through four national broadcasts on Radio Ghana . The environmental safeguards were rated satisfactory at the mid-term review (April 2005). However, the social safeguards performance was found to be in non-compliance with Bank policy, as civil works for three contracts, out of 110, started before the completion of the RAPs; and the three contracts had outstanding compensation to be paid to project affected persons. These three contracts were: Mallam – Kasoa Road Rehabilitation Project (Accra), Teshi Link Road (Accra) and Asafo market junction (Kumasi). In order to address the outstanding compensation problem for these three contracts, a resettlement audit was commissioned and completed in February 2007. An action plan was prepared and the ICR reports that the compensation plan was implemented satisfactorily by April 2008. Fiduciary: There were no major financial accountability issues and performance of the implementing agencies in procurement was satisfactory. All contracts were awarded according to procedures and completed on time before the project closing date. Unintended Impacts: HIV/AIDS awareness/education was carried in the communities along the Anyinam-Nkawkaw road project and MOT developed a workplace policy to guide in-house HIV/AIDS activities. 12. Ratings : 12. ICR IEG Review Reason for Disagreement /Comments Outcome : Satisfactory Satisfactory Risk to Development Negligible to Low Moderate IEG has rated the risk to Development Outcome : Outcome as modest because although the road fund revenues have increased they are only partially meeting the periodic maintenance needs of the road network (see section 7 above). Bank Performance : Satisfactory Satisfactory Borrower Performance : Satisfactory Satisfactory Quality of ICR : Satisfactory NOTES: NOTES - When insufficient information is provided by the Bank for IEG to arrive at a clear rating, IEG will downgrade the relevant ratings as warranted beginning July 1, 2006. - The "Reason for Disagreement/Comments" column could cross-reference other sections of the ICR Review, as appropriate . 13. Lessons: In supporting institutional development, a long term engagement by the Bank is important along with a well coordinated joint donor program. Maintenance of the existing assets needs to be given a priority over the expansion of road networks. Countries need to devise method/criteria for planning/ prioritization of expenditures to best manage the tension between the immediacy of the political agenda (i.e expansion of the network) versus the longer term maintenance of the network. A detailed monitoring and evaluation system is critical for effective supervision and to adapt the project to address specific needs during implementation. Supervision and monitoring of works especially for rural roads that are small in dollar terms but spread over large areas proves difficult. Output and Performance Based Road Contracts can be used. A first time preparation and implementation of safeguards requires extensive training and close supervision. 14. Assessment Recommended? Yes No 15. Comments on Quality of ICR: The overall quality of the ICR is satisfactory. However, there are a number of shortcomings: the ICR reports actuals costs for only the Bank financed portion of the components and not the entire program. The TTL advised that the reporting for the entire program (which was financed by the Government and through parallel financing by other donors) was not feasible; there is little discussion on the total maintenance needs for the sector and the portion that needs to be funded through budgetary contribution; reasons for two year delay are not mentioned but were discussed during the meeting with the TTL; it does not discuss the difference in the development objectives as stated in the Project Appraisal Document and the Loan Agreement. The format of the ICR review may not be ideal for covering programmatic lending initiatives. This is particularly true when separating the achievements of the whole program as opposed to the specific project and where networks of roads of different types (highways, urban and feeder) are improved a point ERR becomes meaningless and a range of values would be more useful. a.Quality of ICR Rating : Satisfactory