Document of The World Bank FOR OFFICIAL USE ONLY Report No: 75412-KH RESTRUCTURING PAPER ON A PROPOSED PROJECT RESTRUCTURING OF ROAD ASSET MANAGEMENT PROJECT CREDIT No. 4442-KH (BOARD APPROVAL DATE: MAY 20, 2008) TO THE KINGDOM OF CAMBODIA FEBRUARY 15, 2013 Southeast Asia Sustainable Development Unit East Asia and Pacific Region This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization. ABBREVIATIONS AND ACRONYMS ADB Asian Development Bank AusAID Australian Agency for International Development AWP Annual Work Program CHM Complaints Handling Mechanism EIRR Economic Internal Rate of Return GGF Good Governance Framework HDM4 Highway Development and Management Model, Version 4 ICB International Competitive Bidding ICR Implementation Completion and Results Report IDA International Development Association IPA Independent Procurement Agency ISR Implementation Status Report MPWT Ministry of Public Works and Transport PDO Project Development Objective PIA Project Implementation Agency PRIP Provincial and Rural Infrastructure Project RAMP Road Asset Management Project RDCMU Road Data Collection Management Unit RGC Royal Government of Cambodia TA Technical Assistance Regional Vice President: Axel van Trotsenburg, EAPVP Country Director: Annette Dixon. EASTS Sector Manager: Julia M. Fraser, EASTS Task Team Leader: Siélé Silué, EASIN 2 CAMBODIA ROAD ASSET MANAGEMENT PROJECT CONTENTS Page A. SUMMARY ............................................................................................................... 6 B. PROJECT STATUS ................................................................................................. 6 C. PROPOSED CHANGES .......................................................................................... 7 3 Restructuring Status: Draft Restructuring Type: Level 2 Last modified on date : 02/15/2013 1. Basic Information Project ID & Name P106603: Road Asset Management Project Country Cambodia Task Team Leader Siélé Silué Sector Manager Julia Fraser Country Director Annette Dixon Original Board Approval Date 05/20/2008 Original Closing Date: 09/30/2013 Current Closing Date 09/30/2013 Proposed Closing Date [if applicable] 06/30/2014 EA Category A-Full Assessment Revised EA Category A-Full Assessment EA Completion Date 09/28/2007 Revised EA Completion Date N/A 2. Revised Financing Plan (US$m) Source Original Revised BORR 15.34 15.25 IDA 30.00 30.00 ADB 6.0 6.0 AusAID 4.82 4.82 Total 56.16 56.07 3. Borrower Organization Department Location Ministry of Economy and Cambodia Finance 4. Implementing Agency Organization Department Location Ministry of Public Works and Cambodia Transports 4 5. Disbursement Estimates (US$m) Actual amount disbursed as of 02/15/2013 18.67 Fiscal Year Annual Cumulative 2013 2.33 21.00 2014 9.00 30.00 Total 30.00 6. Policy Exceptions and Safeguard Policies Does the restructured project require any exceptions to Bank policies? N Does the restructured projects trigger any new safeguard policies? If yes, please select N from the checklist below and update ISDS accordingly before submitting the package. 7a. Project Development Objectives/Outcomes Original/Current Project Development Objectives/Outcomes The objective of the project is to ensure continued effective use of the rehabilitated national and provincial road network in support of the economic development in Cambodia. It will do so by improving the institutional and technical capacity of the Ministry of Public Works and Transport for road maintenance planning, budgeting and operations, and by expanding and strengthening maintenance activities. 7b. Revised Project Development Objectives/Outcomes [if applicable] 5 ROAD ASSET MANAGEMENT PROJECT RESTRUCTURIING PAPER A. SUMMARY 1. The proposed changes include: (i) a nine month extension of the Credit closing date from September 30, 2013 to June 30, 2014 to complete the ongoing project activities; (ii) a re-allocation of the project proceeds based on the disbursement forecasts; and (iii) an adjustment of IDA road maintenance target. B. PROJECT STATUS 2. The project was approved by the Board on May 20, 2008 with a Credit amount of SDR18.3 million. The Development Credit Agreement was declared effective on December 13, 2008 with an original Credit closing date of September 30, 2013. After difficulties at the start up due to failures in the procurement process, the project is now in a good dynamic to achieve its development goals. The PDO and the overall implementation performance have been rated moderately satisfactory and satisfactory, respectively based on the following progress:  The project is in a good dynamic to achieve its development goals. The road map agreed during the Mid-Term Review is being implemented by the Implementation Agency and closely monitored by the Minister of Public Works and Transports.  The implementation of the civil works is progressing smoothly. All the procurement activities under road asset management component are fully completed and the Year 1, Year 2 and Year 3 road maintenance programs which are the main activities of the project are expected to be fully completed by June 30, 2013. The Year 4 road maintenance program on National Road No.7 (one lot of 77 km) just started and will not be completed within the current Closing Date of September 30, 2013.  Good progress has been made for the capacity development component: (i) all consultancy services and training programs are ongoing; (ii) in most of the Regional Offices, the road maintenance activities are now outsourced to private sector; and (iii) the Road Safety and HIV/AIDS awareness programs are being implemented as planned. Only the Road Data Collection Management Unit (RDCMU) is not fully operational due to technical problems to transfer the data collected to HDM4 and staff turnover issue. To address the technical problem, a qualified HDM4 specialist is expected to strengthen the consultant team. 3. As of February 15, 2013, the cumulative disbursements are SDR 11.65 million (or 64% of the total allocated amount). An acceptable Action Plan to fully disburse the credit amount by the proposed closing date of June 30, 2014 has been discussed and agreed with the Borrower. There are no outstanding audits and the project is in compliance with all applicable Bank safeguards policies. C. PROPOSED CHANGES 4. Closing Date. An extension of the Credit closing date from September 30, 2013 until June 30, 2014 is proposed to enable the Ministry of Public Works and Transport (MPWT) to complete the remaining activities, notably the Year 4 road maintenance program on National Road No.7 which will not be completed within the current closing date of September 30, 2013, and to complete capacity building activities within the RDCMU. ADB and AusAID have also agreed with the Borrower to extend their projects closing date until June 30, 2014. Therefore, it is proposed that all donor financing has the same closing date and the donors agree to have a joint ICR. 5. Reallocation of the Project Proceeds. The proposed reallocation of Credit proceeds is based on the actual cost calculations for the newly proposed project period. Additional SDR470,000 will be allocated to the category 3 to allow the completion of the planning activity and to build the capacity within the RDCMU by reducing the allocations of categories 1, 2, 4 and 5 with an equivalent amount. Table 1: Reallocation of Proceeds (SDR) Current Revised % of Financing % of financing N0 Category Allocation Allocation Current Revised (SDR) (SDR) Works under Parts A(1) 1 14,630,000.00 14,420,000.00 100 100 and A(2)(b) of the Project Goods under Parts A(2)(b), 2 B(1) and B(2) of the 300,000.00 90,000.00 100 100 Project Consultants’ Services under Parts A(2)(b), 3 A(2)(c), A(2)(d), B(1), 2,430,000.00 2,900,000.00 100 100 B(2), B(3), and B(6) of the Project Training under Part B(1), 4 70,000.00 30,000.00 100 100 of the Project Incremental operating 5 Costs under Part A(2)(b) of 330,000.00 320,000.00 80 80 the Project MBPI Payments under Part C of the Project up to 6 0 0 0% 0% December 31, 2009 POC Payments under Part 7 540,000.00 540,000.00 100 100 C of the Project Total 18,300,000.00 18,300,000.00 7 6. IDA road maintenance target. The newly agreed road maintenance target for IDA Credit is 500 km instead of 800 km. IDA financing is used for the rehabilitation of the road sections that are the most degraded, and current assessment indicated that 500km of the degraded roads would need to be rehabilitated on a priority basis. The change of this target in the Document of the Credit Agreement has no impact on the results framework and will not affect the achievement of the PDO.