Document of The World Bank Report No: ICR00003195 IMPLEMENTATION COMPLETION AND RESULTS REPORT (IDA-42120) ON A CREDIT IN THE AMOUNT OF SDR 93.2 MILLION (US$ 135 MILLION EQUIVALENT) TO THE REPUBLIC OF IRAQ FOR A EMERGENCY ROAD REHABILITATION PROJECT November 25, 2014 GTIDR Republic of Iraq Middle East North Africa Region CURRENCY EQUIVALENTS (Exchange Rate Effective: November 25, 2014) Currency Unit = SDR 1.00 = US$ 1.46 US$ 1.00 = 0.68 FISCAL YEAR September 1 – August 31 ABBREVIATIONS AND ACRONYMS AM Aide-Mémoire CD Country Director CMU Country Management Unit CPS Country Partnership Strategy DP Disbursement Plan EA Environmental Assessment EMP Environmental Management Plan ERL Emergency Recovery Loan ERR Economic Rate of Return EIRR Economic Internal Rate of Return ERRP Emergency Road Rehabilitation Project ESIA Environmental and Social Impact Assessment ESSAF Environmental and Social Screening and Assessment Framework FM Financial Management FMR Financial Management Report FRR Financial Rate of Return GOI Government of Iraq GDRB General Directorate of Roads and Bridges HDM-4 Highway Development and Management Model IBRD International Bank for Reconstruction and Development ICR Implementation Completion and Results Report IDA International Development Association IEG Independent Evaluation Group IO Intermediate Objective IQ Republic of Iraq ISN Interim Strategy Note ISR Implementation Supervision Report REPUBLIC OF IRAQ Emergency Road Rehabilitation Project CONTENTS Data Sheet A. Basic Information B. Key Dates C. Ratings Summary D. Sector and Theme Codes E. Bank Staff F. Results Framework Analysis G. Ratings of Project Performance in ISRs H. Restructuring I. Disbursement Graph 1. Project Context, Development Objectives and Design ............................................... 1 2. Key Factors Affecting Implementation and Outcomes .............................................. 5 3. Assessment of Outcomes .......................................................................................... 13 4. Assessment of Risk to Development Outcome......................................................... 21 5. Assessment of Bank and Borrower Performance ..................................................... 22 6. Lessons Learned ....................................................................................................... 24 7. Comments on Issues Raised by Borrower/Implementing Agencies/Partners .......... 26 Annex 1. Project Costs and Financing .......................................................................... 28 Annex 2. Outputs by Component ................................................................................. 29 Annex 3. Economic and Financial Analysis ................................................................. 33 Annex 4. Bank Lending and Implementation Support/Supervision Processes ............ 37 Annex 5. Beneficiary Survey Results ........................................................................... 39 Annex 6. Stakeholder Workshop Report and Results................................................... 40 Annex 7. Summary of Borrower's ICR and/or Comments on Draft ICR ..................... 50 Annex 8. Comments of Cofinanciers and Other Partners/Stakeholders ....................... 54 Annex 9. List of Supporting Documents ...................................................................... 55 MAP A. Basic Information IQ - Emergency Road Country: Iraq Project Name: Rehabilitation Project ID: P087735 L/C/TF Number(s): IDA-42120 ICR Date: 11/25/2014 ICR Type: Core ICR Lending Instrument: ERL Borrower: REPUBLIC OF IRAQ Original Total XDR 93.20M Disbursed Amount: XDR 74.39M Commitment: Revised Amount: XDR 93.20M Environmental Category: A Implementing Agencies: General Directorate of Roads and Bridges (KRG-GDRB) State Commission for Roads and Bridges (SCRB) Cofinanciers and Other External Partners: B. Key Dates Revised / Actual Process Date Process Original Date Date(s) Concept Review: 08/25/2005 Effectiveness: 10/15/2007 10/15/2007 01/25/2010 Appraisal: 02/07/2006 Restructuring(s): 07/13/2012 Approval: 06/29/2006 Mid-term Review: 03/21/2009 Closing: 06/30/2010 06/30/2014 C. Ratings Summary C.1 Performance Rating by ICR Outcomes: Moderately Satisfactory Risk to Development Outcome: Substantial Bank Performance: Moderately Satisfactory Borrower Performance: Moderately Satisfactory C.2 Detailed Ratings of Bank and Borrower Performance (by ICR) Bank Ratings Borrower Ratings Moderately Quality at Entry: Moderately Satisfactory Government: Unsatisfactory Implementing Quality of Supervision: Moderately Satisfactory Moderately Satisfactory Agency/Agencies: Overall Bank Overall Borrower Moderately Satisfactory Moderately Satisfactory Performance: Performance: ITF Iraq Trust Fund KRG Kurdistan Regional Government MIM Master Implementation Manual MOCH Ministry of Construction and Housing MOF Ministry of Finance MS Moderately Satisfactory MU Moderately Unsatisfactory NPV Net Present Value PDO Project Development Objective PMT Project Management Team RAM Road Asset Management S Satisfactory SCRB State Commission for Roads and Bridges SM Sector Manager TA Technical Assistance TCP Transport Corridors Project TOR Terms of Reference TSMP Transport Sector Master Plan UN United Nations WB World Bank SDR Special Drawing Rights XDR Special Drawing Rights (currency) Vice President: Inger Andersen Country Director: Ferid Belhaj Practice Manager: Marc Juhel Project Team Leader: Ibrahim Khalil Dajani ICR Team Leader: Omar Raja Wahab C.3 Quality at Entry and Implementation Performance Indicators Implementation QAG Assessments Indicators Rating Performance (if any) Potential Problem Project Quality at Entry Yes None at any time (Yes/No): (QEA): Problem Project at any Quality of Yes None time (Yes/No): Supervision (QSA): DO rating before Moderately Closing/Inactive status: Satisfactory D. Sector and Theme Codes Original Actual Sector Code (as % of total Bank financing) Central government administration 2 2 Rural and Inter-Urban Roads and Highways 98 98 Theme Code (as % of total Bank financing) Conflict prevention and post-conflict reconstruction 33 33 Improving labor markets 17 17 Injuries and non-communicable diseases 17 17 Rural services and infrastructure 33 33 E. Bank Staff Positions At ICR At Approval Vice President: Inger Andersen Christiaan J. Poortman Country Director: Ferid Belhaj Joseph P. Saba Practice Marc H. Juhel Hedi Larbi Manager/Manager: Project Team Leader: Ibrahim Khalil Dajani Mohammed D. E. Feghoul ICR Team Leader: Omar Raja Wahab ICR Primary Author: Sanne Agnete Tikjoeb F. Results Framework Analysis Project Development Objectives (from Project Appraisal Document) The project development objective is to improve the condition of road assets by rehabilitating highly damaged segments of the country's highway and rural road networks, reestablishing critical river crossings, and restoring the capacity to manage and maintain road assets. Revised Project Development Objectives (as approved by original approving authority) The PDO was not revised. (a) PDO Indicator(s) Original Target Formally Actual Value Values (from Revised Achieved at Indicator Baseline Value approval Target Completion or documents) Values Target Years Improved capacity both at SCRB and KRG-GDRB measured by the development Indicator 1 : of road asset management tools and their effective use. Development of road asset Road asset management tools Value No established road asset management and their use to quantitative or management systems at systems developed produce adequate Qualitative) SCRB and KRG-GDRB. and in use by the maintenance and SCRB and GDRB. rehabilitation programs. Date achieved 06/06/2006 06/30/2010 06/30/2014 Comments (incl. % Target achieved. achievement) Indicator 2 : % of population in the targeted villages with access to an all-weather road. 100% of Value population in the quantitative or 0% targeted villages 100% Qualitative) have access to an all-weather road. Date achieved 06/06/2006 06/30/2010 06/30/2014 Although the target for this indicator has been met, it is considered a weak Comments indicator since its wording does not reflect the significant downward revision of (incl. % the rural roads rehabilitated target. Section 2.3 discusses the adequacy of this achievement) indicator in detail, and its limitations have been considered in assessing the Project’s achievement of outcomes. Indicator 3 : Average reduction in travel time for villagers to reach markets/services. Value 50% reduction in 41% reduction in quantitative or 0% travel time. travel time. Qualitative) Date achieved 06/06/2006 06/30/2010 06/30/2014 Comments (incl. % Target largely achieved. achievement) (b) Intermediate Outcome Indicator(s) Original Target Actual Value Formally Values (from Achieved at Indicator Baseline Value Revised approval Completion or Target Values documents) Target Years Indicator 1 : Roads rehabilitated, Non-rural Value (quantitative 0 km 338.5 km 268.5 km 194.3 or Qualitative) Date achieved 06/06/2006 06/30/2010 06/30/2014 06/30/2014 Revised target value result of Level II restructuring in June 2012. Comments 155.8 km completed under Part A out of 230 km revised target (original target (incl. % 300 km) achievement) 38.5 km under Part B, meeting the target. Indicator 2 : Roads rehabilitated, Rural Value (quantitative 0 km 225 km 115 km 119.3 km or Qualitative) Date achieved 06/06/2006 06/30/2010 06/30/2014 06/30/2014 Revised target value result of Level II restructuring in June 2012. Comments 37.7 km completed under Part A out of 40 km revised target (original target 150 (incl. % km). achievement) 81.6 km completed under Part B, exceeding target by 6.6 km. Indicator 3 : Bridge replacements Value (quantitative 0 3 4 3 or Qualitative) Date achieved 06/06/2006 06/30/2010 06/30/2014 06/30/2014 Comments Revised target value result of Level II restructuring in June 2012. 3 bridges (incl. % replaced under Part A of the project. achievement) Indicator 4 : Road asset management Maintenance management capacities are satisfactory (with No road maintenance and Road asset road rehabilitation Value management strategies. management and village-access- (quantitative No road asset systems developed road programs or Qualitative) management system in and in use by the developed). Road place. SCRB and GDRB. assets management systems are in place and operational. Date achieved 06/06/2006 06/30/2010 06/30/2014 Comments (incl. % Partial duplicate of PDO-level indicator 1. achievement) Indicator 5 : Transport Sector Master Plan Value Transport Sector (quantitative No plan No plan Yes Master Plan or Qualitative) Completed. Date achieved 06/06/2006 06/30/2010 06/30/2014 06/30/2014 Comments (incl. % This indicator added as a result of the Level II restructuring in June 2012. achievement) Indicator 6 : Local employment created Value 310,000 person- (quantitative 0 person-days Not included. No target days or Qualitative) Date achieved 06/06/2006 06/30/2010 06/30/2014 06/30/2014 Comments Number of temporary employment generated. No target was set for this indicator (incl. % which was added during implementation. achievement) Indicator 7 : Direct project beneficiaries Value (quantitative 0 Not included. No target 300,000 or Qualitative) Date achieved 06/06/2006 06/30/2010 06/30/2014 06/30/2014 Comments Measured as population with improved access due to the project in Central and (incl. % Southern Governorates only (Part A). No target was set for this indicator which achievement) was added during implementation. Indicator 8 : Female beneficiaries Value (quantitative 0% Not included. No target 50% or Qualitative) Date achieved 06/06/2006 06/30/2010 06/30/2014 06/30/2014 Comments (incl. % Supplemental indicator to direct project beneficiaries. achievement) G. Ratings of Project Performance in ISRs Actual Date ISR No. DO IP Disbursements Archived (USD millions) 1 10/10/2006 Satisfactory Satisfactory 0.00 2 12/19/2006 Moderately Satisfactory Moderately Satisfactory 0.00 3 06/21/2007 Unsatisfactory Unsatisfactory 0.00 Moderately Moderately 4 12/18/2007 0.00 Unsatisfactory Unsatisfactory Moderately Moderately 5 05/03/2008 0.00 Unsatisfactory Unsatisfactory Moderately Moderately 6 11/07/2008 9.25 Unsatisfactory Unsatisfactory 7 04/15/2009 Moderately Satisfactory Moderately Satisfactory 19.02 8 07/22/2009 Moderately Satisfactory Moderately Satisfactory 27.56 9 09/29/2009 Moderately Satisfactory Moderately Satisfactory 34.05 10 01/22/2010 Moderately Satisfactory Moderately Satisfactory 43.81 11 10/05/2010 Moderately Satisfactory Moderately Satisfactory 63.32 12 02/12/2011 Moderately Satisfactory Moderately Satisfactory 69.45 13 08/29/2011 Satisfactory Satisfactory 72.94 14 03/11/2012 Satisfactory Satisfactory 81.60 15 04/28/2012 Satisfactory Satisfactory 84.05 16 12/23/2012 Satisfactory Satisfactory 89.95 17 06/25/2013 Satisfactory Moderately Satisfactory 95.52 18 12/27/2013 Moderately Satisfactory Moderately Satisfactory 101.41 Moderately 19 07/01/2014 Moderately Satisfactory 107.54 Unsatisfactory H. Restructuring (if any) ISR Ratings at Amount Board Restructuring Disbursed at Restructuring Reason for Restructuring & Approved Restructuring Date(s) Key Changes Made PDO Change DO IP in USD millions Extension of the credit's closing date from June 30, 2010 until 01/25/2010 N MS MS 46.46 June 30, 2012 and reallocation of credit proceeds under Part B of the project. Extension of the credit's closing date from June 30, 2012 until 07/13/2012 N S S 87.31 June 30, 2014 and revision of key performance indicators and project scope. I. Disbursement Profile 1. Project Context, Development Objectives and Design 1.1 Context at Appraisal 1. Once regarded as having one of the Middle East’s most comprehensive transportation systems, Iraq’s transport infrastructure at the time of appraisal had suffered from more than two decades of neglect, underinvestment, conflict, and war. In 2003, the invasion of Iraq led to further destruction of critical infrastructure and entailed years of on-going fighting, leaving many areas of the country extremely dangerous. As a result, Iraq faced enormous challenges in reconstructing its transportation networks and facilities, as well as in re-establishing key transport services. 2. Iraq’s 42,000 kilometer road network is classified as national highways, primary roads, secondary roads, village access roads, and special purpose roads (military and border roads). Although some 85 percent of the network was paved, damages sustained during numerous conflicts, inadequate repairs, and deferred maintenance had rendered much of the network to fair or poor condition. 3. With the exception of municipal roads in urban areas, responsibility for constructing and maintaining the classified road network lies with the Ministry of Construction and Housing (MOCH), and specifically, the State Commission for Roads and Bridges (SCRB). In the northern Governorates under the Kurdistan Regional Government (KRG), there is a regional Ministry of Construction and Housing and a General Directorate of Roads and Bridges (GDRB) that mirror the structure of the MOCH and the SCRB. This arrangement has been in place for more than ten years. 4. Increasingly, the SCRB and the GDRB had developed and relied on in-house capacity to design most of the country’s roads and bridges. In the 1970s, there were a number of private consulting firms in all fields of engineering, but due to a change in policy requiring ministries to rely on in-house expertise and parastatal consulting corporations, the quality and capacity of the private sector deteriorated to the extent that it no longer offered services in the transport sector. Similarly in the road construction industry, the capacity and capabilities of the private sector had been depleted due to years of war and increased reliance on parastatal corporations. 5. The key challenges in the road sector at the time of appraisal are summarized below:  Loss of key road assets: Most of the country’s nearly 42,000 km road network was developed in the 1970s and 1980s, and little new construction had taken place since. Although some 85 percent of the network was paved, maintenance had consistently been deferred.  Deterioration of village access roads: There had been a pronounced deterioration of village access roads to the extent that reconstruction, rather than rehabilitation, was needed along much of the rural road network. This had diminished access to markets and social services in many rural areas, and contributed to isolation.  Bridges critical to Iraq’s road network: The topography of Iraq, with two major river systems along which most cities are located, makes bridges a vital part of the road network. Many of the country’s more than 1,000 bridges had suffered damage, and several key river crossings were never provided with replacement bridges. Instead, temporary floating bridges were put in place, such as the 69 pontoon bridges located in the central and southern part of Iraq. 1  Weakened capacity to manage road network: Historically, capacity to manage the country’s network of roads had been strong and adequate. However, reliance on outdated procedures and equipment had eroded skills and abilities.  Rapidly expanding vehicle fleet: Due to extensive reliance on land transport and demand that had been suppressed for more than a decade, the size of Iraq’s vehicle fleet was expected to continue increasing rapidly, which would cause traffic to grow significantly. 6. The preservation of road assets was identified by the Government of Iraq (GoI) as a priority, and support for a project to rehabilitate key segments of the network and prepare overall road rehabilitation and rural access programs was expressly requested to be part of the first IDA allocation of US$500 million to Iraq since 1979. As per the GoI’s declaration that 17 percent of donor support be earmarked for projects determined by the Kurdistan Regional Government, the KRG explicitly requested that its share of the IDA allocation be concentrated in roads (US$45 million) and power. 7. The rationale for significant IDA involvement in rehabilitating Iraq's highway and rural road infrastructure was the comparative advantage in addressing immediate needs, while at the same time strengthening the policy and institutional framework for the sector's long-term sustainability. In addition, there was a significant financing gap in the sector in the short- to medium-term based on the UN/WB Joint Needs Assessment (2003). 8. As such, the proposed project was fully consistent with the World Bank’s Second Interim Strategy Note (ISN) for Iraq (2005), which emphasized the need for rapid rehabilitation of critical infrastructure services and institutional support as pre-requisites for long-term sustainable recovery. The civil works and subsequent maintenance activities associated with the project would also create some much needed local employment opportunities in the near-term. The Bank's reconstruction efforts put a premium on early, but selective engagement, flexibility in design and implementation, capacity restoration, and close monitoring and evaluation. 1.2 Original Project Development Objectives (PDO) and Key Indicators (as approved) 9. The objective of the Emergency Road Rehabilitation Project (ERRP) is “to improve the condition of road assets by rehabilitating highly damaged segments of the country’s highway and rural road networks, reestablishing critical river crossings, and restoring the capacity to manage and maintain road assets.” In the Technical Annex, it is emphasized that given the project’s emergency nature, outputs, rather than outcomes, will be used to measure success in achieving objectives. Table 1: Original Key Performance Indicators GOAL KEY INDICATOR Sector Level Build capacity to manage the enormous Trained and well-functioning road sector institutions reconstruction efforts, which addresses poverty are managing road assets and operations through employment generation, kick-start economic activity and restoring essential Key bottlenecks in the road networks removed infrastructure and services Vision for developing the road sector prepared Policy and analytical work to help transition from central planning to market economics 2 PDO Level The project development objective is to improve Network of high quality and well-maintained roads the condition of road assets by rehabilitating improve reliability of transport and access to markets highly damaged segments of the country's highway and services and rural road networks, reestablishing critical river crossings, and restoring the capacity to Access between villages affected by project manage and maintain road assets investments improved, and time taken for villagers to reach closest markets and services reduced (improved accessibility) Training of staff provided and capacity increased in road agencies Intermediate Level Part A Parts A and B A. 1 Highway Rehabilitation Program: Emergency A.l, B.1) 300 km of key regional links rehabilitated to rehabilitation of 300 km bitumen standard in the fifteen central and southern of pavement on critical road corridors provinces and upgrading the Erbil - Altun Kopri Road (38.5). A.2 Village Access Roads: Rehabilitate 150 km of access roads A.2, B.2) Programming and implementation arrangements defined for highways and village access A.3 Bridge Replacements: About three roads. At least 225 km of village access roads key bridges upgraded to more constructed, providing improved access between appropriate standards villages (75 km in KRG Governorates, and 150 km in central and southern Governorates) A.4 Road Asset Management: Equipment and procedures, Road A.3) At least three bridges improved on critical road Rehabilitation Program, Village sections Access Road Program are functional. A.4) Maintenance management capacity satisfactory A.5 Project Management: Provision of international expertise, capacity A.4, B.3) Asset management system in place and building initiatives, office and operational communication equipment, and vehicles A.5) Adequate institutional arrangements in place for Part B project implementation and sufficient project’s funds B.l Erbil-Altun Kopri Road: (38.5 km) widening will be allocated for project management support and and rehabilitation capacity building activities B.2 Village Access Roads: Rehabilitate B.4) sufficient project’s funds will be allocated for 75 km of access roads project management support and capacity building activities* B.3 Road Asset Management: Equipment and procedures, Road A5, B.4) Annual audits carried out showing no Rehabilitation Program, and Village irregularities Access Road Program are functional Training programs carried out. B.4 Project Management: Provision of international expertise, capacity building initiatives, office and communication equipment, and vehicles * Key indicator B.4 was incomplete in the Technical Annex. 3 1.3 Revised PDO (as approved by original approving authority) and Key Indicators, and reasons/justification 10. The project development objective was not revised. 11. The indicators tracked since ISR 1 are worded differently from the key indicators listed in the Technical Annex, but they are similar in scope (see section F in the Data Sheet). According to the first ISR, the PDO indicators stated in the Technical Annex had been “reformulated to allow for better collection and reporting.” These changes were not formally revised and it is not clear whether they were discussed with the Borrower as there is no mention of the issue in the Aide Memoire (AM). 12. The key performance indicators were formally revised during the second restructuring on June 29, 2012 to reflect realistic results considering the available funds from the credit and the increase in unit prices of construction material since project appraisal (corrective restructuring). At the same time, the project scope was expanded at the request of the Borrower to include the preparation of a Transport Sector Master Plan, which formed part of the 2013-2016 Country Partnership Strategy (CPS) between Iraq and the Bank (opportunistic restructuring). A new key indicator was established to track the implementation of this supplementary activity. 13. The two core indicators Roads Rehabilitated Non-Rural and Roads Rehabilitated Rural formed part of the PDO-level indicators until June 2013 (ISR 17), after which they were included as intermediate indicators. No formal revision to this end preceded the change. However, the ICR team notes that these standard Bank-wide core indicators are usually included as intermediate output indicators, and not as PDO-level outcomes indicators. 14. The last three indicators did not form part of the original results framework, nor were they formally revised to be included in the results framework. They were introduced in a Bank- wide exercise to incorporate core indicators in on-going projects. No targets were set for these indicators as they were added during implementation. They first appeared in June 2013 (ISR 17). 15. The evolution of the results framework follows that of the project. In the Technical Annex, it is noted that outputs, rather than outcomes, would be used in measuring progress towards project objectives. However, the Technical Annex also mentioned the option of including PDO-level outcome indicators at a later stage. This happened shortly after approval when the PDO-level indicators were revised to allow for better tracking of project outcomes (see section 2.3 for a discussion of each indicator). The final results framework is thus defined by its roots in an emergency operation with mostly output-based indicators, yet adjusted to reflect a standard results framework with outcome-based indicators. Overall the framework was adequate in tracking progress towards project objectives. 1.4 Main Beneficiaries 16. In the Technical Annex the project beneficiaries are briefly described as road users throughout Iraq. Other project benefits included promoting the country’s economic integration, facilitating trade, and supporting reconstruction efforts across all sectors. Although the project was essentially an emergency operation, substantial benefits would be derived from attempts to address medium- to long-term policy and institutional issues, and by developing a vision for how road sector assets should be managed and developed beyond the emergency stage. In addition, civil works and subsequent maintenance activities would provide local employment opportunities. 4 1.5 Original Components (as approved) Part A – Components for the 15 Central and Southern Governorates (US$90 million) A1 Highway Rehabilitation Works A2 Village Access Roads A3 Bridge Replacements A4 Road Asset Management and Road Rehabilitation Programming A5 Project Management Support Part B – Components for the Northern Governorates in Kurdistan Region (US$45 million) B1 Rehabilitation and Upgrading of Erbil-Altun Kopri Road B2 Village Access Roads B3 Road Asset Management and Road Rehabilitation Programming B4 Project Management Support 1.6 Revised Components 17. The components were not revised. 1.7 Other significant changes 18. The project was restructured twice. The first restructuring on January 25, 2010 was a level 2 restructuring to (a) extend the closing date from June 30, 2010 to June 30, 2012 to allow for the implementation of the Um Qasr – Al Zubair highway rehabilitation sub-project under Part A (82 km), and (b) to reallocate funds between expenditure categories for Part B to cover escalating construction costs in the Works category. 19. The second restructuring on June 29, 2012 was also a level 2 restructuring to (a) extend the closing date from June 30, 2012 to June 30, 2014 to complete on-going works and technical assistance (TA) components for Part A, (b) revise the key performance indicators to reflect realistic results for road and bridge rehabilitation, and (c) to modify the project scope to include a requested supplementary activity to prepare a Transport Sector Master Plan. 20. It is important to note that in 2010 a change in mandate of the implementing agency for Part A, the SCRB, meant that the responsibility for village access roads now fell under each Governorate, which would be financing rehabilitation of village access roads from their own funds going forward. As a result, all remaining village access road sub-projects for Part A were cancelled as was the development of a road asset management (RAM) system for rural roads to be implemented at SCRB. 2. Key Factors Affecting Implementation and Outcomes 2.1 Project Preparation, Design and Quality at Entry 21. Citing the experience of other projects in the Iraq portfolio, the ERRP was carefully designed to deliver emergency assistance while developing the institutional capacity of the implementing agencies and enabling the development of a shared vision for the transport sector across ministries and agencies. 22. The project was well conceptualized and prepared. A detailed assessment of the Iraqi transport sector underpinned the structuring of the project, which sought to strike a careful balance between generating results on the ground and providing essential policy advice. Adopting 5 a flexible design allowed for the sequenced implementation of sub-components, giving priority to existing SCRB/GDRB designs for simple road improvements, while bringing in the services of international engineering firms to prepare more complex investments following project launch. This approach was adopted to prevent early implementation delay and to allow for an early review of the project scope given the difficulty in predicting project cost in areas where prices are affected by security risks, difficult mobilization, and supply/demand imbalances. 23. The Bank’s recent experience in Iraq had highlighted the importance of Iraqi ownership and commitment for effective project implementation. At the time of project preparation, a total of nine projects financed by the Iraq Trust Fund (ITF) were under implementation, only one of which was Bank-executed. Based on experience gained through the ITF-financed projects, the ERRP project adopted a similar approach utilizing the concept of the Project Management Team (PMT). In the PMT model, staff from various departments in the implementing agency was seconded on a full-time or part-time basis to implement the project. This approach, which had proved successful in previous projects and which was being adopted by other donor agencies, would permit the capacity and skills developed during the project to be reintegrated into the MoCH upon project completion. 24. The project was designed to be implemented in two parts with a PMT for the Central and Southern Governorates and a PMT for the Northern Governorates in KRG, under one financing agreement. Both SCRB and GDRB showed early commitment to the project by appointing key members to each PMT. The PMT staff members were to include Project Managers, senior technical staff, procurement specialists, financial management specialists, accountants, environmental focal points, and administrative support staff. According to the Technical Annex, the initial PMTs worked closely with Bank staff to complete project preparation at the appraisal and negotiations stage and received early training in the Bank’s fiduciary requirements. 25. Given the relatively weak capacity of each implementing agency, the project was designed to rely on international consultant services for the key tasks of providing project management support and construction supervision and delivering technical assistance. This was intended to accelerate the implementation process while building the capacity of the SCRB and GDRB and to avoid early implementation delay. 26. Project readiness was in an advanced stage with detailed engineering designs for three non-rural road works packages of about 100 km combined as well as three bridge replacements prepared by SCRB and ready for tendering. Similarly, detailed engineering designs and tender documents for Erbil-Altun Kopri highway were well advanced. This showed a high level of ownership and commitment from SCRB and GDRB at an early stage. Sub-projects were identified based on a number of criteria, which took into account current condition, security situation, accessibility, traffic, and other governorate priorities. 27. At the time of appraisal, the main risks to achieving project development objectives were identified as delay in ratification leading to delay in effectiveness and implementation, changes in MoCH senior staff leading to lower commitment, deterioration of political and security situation, escalating prices, difficult Bank supervision, and unfamiliarity with Bank procedures. Central to mitigating these risks was early and close follow-up by Bank staff, securing endorsements from senior and middle management, dispersing sub-projects geographically across governorates to minimize security risks, generous provision for price contingencies, and putting in place sound implementation arrangements with trained PMTs, particularly related to procurement and financial management, relying on independent supervision agents when needed. 6 28. The services provided by a Fiduciary Monitoring Agent (FMA) were to be utilized to support Bank supervision of project implementation and conduct spot inspections. The role of the FMA had been defined in the Master Implementation Manual (MIM) guiding all projects in Iraq following the re-engagement in 2004, and would report directly to the Country Management Unit (CMU). This arrangement would prove to be critical for monitoring progress in the absence of the ability of the Bank team to conduct site visits in the field. 29. To diminish financial management risk, transactions were simplified using direct payments to contractors and suppliers for eligible expenditures above US$ 20,000 as the primary tool for financing project activities. FM arrangements included hiring of an external auditor to review statement of expenses, while intensive training was provided to the PMTs, even prior to project implementation. 30. Based on the Environmental and Social Screening and Assessment Framework (ESSAF) applicable to emergency operations in Iraq, the project was classified as a safeguards category “A” given the extensive work planned for the replacement of bridges with concrete structures (A3) and the rehabilitation and widening of Erbil-Altun Kopri Highway (B1). While maintaining fundamental operational policy requirements, the ESSAF affords sub-projects with minimum impact a fast-track approval process, with environmental assessments and resettlement instruments prepared during early implementation rather than prior to approval. The project triggered two safeguard policies: Environmental Assessment (OP/BP 4.01) and Involuntary Resettlement (OP/BP 4.12). No land acquisition and resettlement was anticipated at the preparation stage. 31. In hindsight, despite the fact that many of these risks were effectively mitigated, early delay in implementation due to the prevailing country context at the time and issues regarding financial management, procurement, and safeguards still arose during the implementation phase (see Section 2.2 and Section 2.4). 32. However, given the Bank’s experience with infrastructure reconstruction projects and institution building in conflict-zones, the Bank was in a good position to assist the GoI in rehabilitating the road sector and to support the SCRB and GDRB in implementing the project successfully. 2.2 Implementation 33. Given the complex country context, project implementation was delayed and not fully completed. Yet, in spite of the challenging operational environment, the project was able to disburse approximately 85 percent of project funds by the time of project closing. This compares favorably to other completed IDA projects since WB reengagement in Iraq in 2004: An emergency loan to the education sector (P096234) disbursed 62 percent in total, while an emergency loan to two KRG hydropower plants (P099059) disbursed 96 percent due to the more stable operating environment in Kurdistan. 34. Despite a high degree of project readiness and client commitment at the preparation stage, the project experienced early implementation delay partly due to delay in ratification by Parliament before effectiveness could be declared (ISR 1) and partly due to delay in tendering sub-projects under Part A (ISR 2). On the former issue, ratification was stalled due to the overall country context at the time. The Bank team was supported by the CD, who sent a letter to the MoF urging the GoI to take action towards credit signing and effectiveness. Meanwhile, the GDRB was proactive in completing the tendering process for the Erbil-Altun Kopri road segment 7 before all project activities came to a complete hold due to the extensive delay. The project was declared effective on October 15, 2007, 15 months after Bank approval, following which the project was re-launched and the PDO and IP ratings were upgraded to MU. 35. On the latter issue, the SCRB postponed launching several key tender packages and slowed down preparation of other sub-projects. Contrary to their GDRB counterparts, the PMT in SCRB was not empowered to proceed with project preparation in advance of Credit signing. This resulted in a complete freeze of project activities planned for the Southern and Central Governorates, which only resumed following project effectiveness. At that time, the PMT still lacked critical human resources and adequate office facilities. By March 2008, the SCRB designated a full staff team to the PMT (ISR 5), and in January 2009, a budget was allocated to cover PMT’s operational expenses (ISR 7). 36. A mid-term review supervision mission was carried out on March 21-28, 2009 in Amman, Jordan. At the time, commitments for Part A equaled 18.5 percent of funds allocated to SCRB, whereas funds allocated to GDRB for Part B were fully committed. The mid-term review included a review of the project’s financial management reports, internal controls, procurement plans, and disbursement projections, both for Part A and for Part B, and all were found acceptable. Key outstanding issues related to the severely delayed contracting of an independent auditor for Part A and to the urgent need for further documentation of social safeguards procedures in accordance with Bank policies for Part B. The overall implementation progress for the project was upgraded to MS. 37. The first restructuring was approved on January 25, 2010 to extend the project closing date until June 30, 2012 and to reallocate funds between expenditure categories for Part B. For Part A, a new sub-project investment had been prepared for the rehabilitation of the double-lane Um Qasr –Al Zubair highway, which would allow for the full commitment of funds under Part A. The rehabilitation period for this road segment of 41 km in each direction (i.e. 82 km in total) was estimated to be 20 months. For Part B, the price escalation for construction material such as fuel, cement, steel, and bitumen, necessitated a reallocation of funds between categories to cover the higher costs for remaining works on the Erbil-Altun Kopri highway segment. The request reflected the advanced implementation of activities under Part B and the fact that some planned expenditures had been funded by GDRB’s own budget, including an additional 18 km of village access roads in extension of project-funded roads under component B2, and the nesting of a RAM system into an on-going GDRB activity to develop a Road Master Plan for the Kurdistan region. 38. The second restructuring was approved on June 29, 2012 to extend the project closing date until June 30, 2014, to revise the key performance indicators, and to revise the project scope. The Bank discussed the need to restructure the project with the Client in October, 2011. The Borrower’s letter of request to restructure the project was received in May, 2012. At the time, the project was 65 percent disbursed with a satisfactory rating for both development outcome and implementation progress. Under Part A of the project, 74 km of non-rural roads and 37.7 km of rural roads had been rehabilitated, and three floating pontoon bridges had been replaced. For Part B, project implementation was complete and the GDRB had submitted a draft ICR. 39. The extension was required to allow for the completion of on-going infrastructure activities under Part A, to implement the RAM system, for which services had yet to be contracted for SCRB, and to extend the scope of the TA component to include a supplementary activity to help prepare a national Transport Sector Master Plan. The national TSMP was identified as a priority in the 2013-2016 CPS between the GoI and the Bank. Three of the main performance indicators for Part A were revised to realistically reflect the targets to be achieved by 8 the Credit closing date. This involved: (1) downgrading the target for rehabilitation of non-rural roads from 300 km to 230 km due to an increase in unit prices for construction material since project appraisal, (2) downgrading the target for rehabilitation of rural roads from 150 km to 40 km due to a change in mandate for SCRB resulting in the cancellation of remaining rural roads sub-projects, and (3) upgrading the target for bridge replacements from 3 bridges to 4 bridges to reflect actual works under contracts awarded. 40. Project implementation was inevitably marked by the stark contrasts between the operating environment in the Central and Southern Governorates and that of the Northern Governorates in KRG. The heightened security risks in the Central and Southern Governorates, which experienced prolonged periods of violent conflict, insurgent fighting, and elevated military campaigns coupled with unstable political leadership, negatively impacted the mobility, capacity development, and efficacy of SCRB. In comparison, the relatively stable political and operating environment in the KRG enabled GDRB to develop significant capacity in project management and to attract international expertise to ensure smooth implementation of the project. This country context duality led to two very different implementation processes and different project outcomes. As summarized in the bullet points below, several key implementation challenges, which should be considered in light of the above, affected the planned outputs:  Low empowerment of SCRB-PMT: Due to a lack of advanced funding to cover operational expenditures and due to a lack of designated technical staff on engineering, procurement and safeguards issues, the SCRB-PMT lacked the ownership and commitment at the project management level to prevent significant implementation delay in the early stages of project implementation. The issue was resolved when SCRB appointed additional PMT members and the GoI allocated an operational budget.  Increasingly difficult operating environment due to the worsening security situation: The effect of security issues on the project cannot be overstated. First, it disrupted or delayed the progress of tendering packages and performing rehabilitation works as different areas of the country became inaccessible due to insecurity. Second, it proved difficult to attract qualified international bidders for the technical assistance components as international consulting firms were reluctant to come to Baghdad. Third, price contingencies were inadequate to cover the rising cost of sourcing construction material. Fourth, the difficult operating environment and depletion of resources caused several contractors to underperform on their responsibilities, leading to work sites being vacated or sub- contracted without prior approval.  Attracting international expertise: The delay in contracting consultant services for the TA components was caused by the reluctance of international consultant firms to operate in Baghdad due to the security risks. The lack of a competitive environment meant that sometimes no bids were received. This led to several rounds of tendering of large TA components with revised TORs. The issue was resolved when the TA components were launched under separate SCRB and GDRB contracts and when the activities under each component were combined to raise the total award amount. This issue mostly affected Part A of the project: the RAM system was not adopted until the end of the project, construction supervision services were never contracted (except for Um Qasr – Al Zubair and al-Daraji Bridge) but instead undertaken by SCRB in-house staff members, and the lack of project management support significantly delayed the tendering of road works.  Price escalation of construction material: The cost of construction material rose as the country situation worsened, while adding further expenses for security related costs. In the case of GDRB, this was mitigated by extra funding from GDRB’s own budget. 9 However, in the case of SCRB this lead to poor contractor performance and to the reduction in target value for road rehabilitation.  Poor contractor performance: Considering the difficult operating environment, it is notable that most contractors performed satisfactory. However, despite close follow-up from the SCRB-PMT and the Bank, and despite formulating joint action plans for completion, several contractors were unable to fulfill their contracts. As of project closing date, the outstanding works negatively affected by contractor performance are the rehabilitation of Um Qasr – Al Zubair (82 km) and al-Daraji Bridge (245 meters). The delay in tendering consultant services to supervise the construction work, even as works contracts were awarded, left a void in terms of capacity building and technical assistance that was planned as part of the sequenced design to proceed from simple to more complex sub-projects. In the case of SCRB, the complete TA component was only fully implemented shortly before project closing. These issues were partly addressed through post-construction quality control measures, such as expert reviews of bridge designs.  Change of mandate governing rural roads: Due to a change in SCRB’s mandate, which delegated the responsibility for rural road maintenance and rehabilitation to each Governorate, the remaining work under component A2 was cancelled as was the development of a RAM system for rural roads to be implemented in SCRB (component A4). However, even prior to this decision, the rehabilitation of village access roads was severely challenged by a deteriorating security environment in remote areas. 41. By end of 2010, the GDRB had completed all works financed by the project. The RAM system was installed and operational by 2012. As noted by one SM, the advanced progress in KRG was consistent with Bank experience in other sectors. 42. By project closing date, the SCRB had disbursed roughly three fourths of the funds allocated to Part A of the project. SCRB has expressed commitment to completing remaining works using national funds and has requested funding from MoP. The Bank has not received a timeline for the completion of remaining works. 43. It is worth noting that the project evolved over time from being an emergency operation at the time of preparation to being closer to a standard project by the time of closing. This is common for this type of project, which is prepared for a post-conflict country, extended several times, and implemented over eight years. Particularly at the time of the second restructuring when the national Transport Sector Master Plan was added, it became obvious that the project had reached beyond its initial emergency stage with urgently needed road rehabilitation to responding to Client demands by engaging in on-going dialogue with the GoI and showing flexibility in embracing a new activity. 2.3 Monitoring and Evaluation (M&E) Design, Implementation and Utilization 44. As an emergency operation, monitoring activities were originally arranged to focus on project outputs, rather than outcomes. Monitoring of overall progress towards the PDO as well as of project management issues and milestones was entirely the responsibility of the implementing agencies. Both SCRB and GDRB were to send quarterly progress reports and financial reports to the Bank. From the Bank’s side, the team relied on independent supervision agents (FMAs) to visit project sites when prevented from conducting field trips during missions. 45. In general, the output indicators established in the Technical Annex, as well as the outcome indicators included in the ISRs, were adequate in tracking progress towards the 10 achievement of the PDO. However, vague wording of the PDO and the PDO-level indicators was raised as a critique by participants in the ICR stakeholder workshop:  The PDO aims to “improve the condition of road assets”. This rather vague wording implies that any improvement of the road assets is a fulfillment of the PDO;  The first PDO-level indicator assesses the “Improved capacity both at SCRB and KRG- GDRB measured by the development of road asset management tools and their effective use.” The emphasis on effective use was never defined and thus monitoring of this indicator has focused on the “development of road asset management tools”, i.e. RAM systems. It may be understood that “effective use” refers to “training in RAM operation completed”; however, no targets for the number of trainings completed or number of people trained were established;  The second PDO-level indicator tracks the “% of population in the target villages with access to an all-weather road.” Since the indicator was defined as a percentage, rather than a number, the target fluctuates with the revision of km rehabilitated and is therefore less meaningful than intended. Originally, the target was a number equal to 100 percent of the population “living in villages of at least 50 households within 1 km along a stretch of 225 km of rural roads”, according to the definition of rural accessibility discussed in AM from November, 2010. However, as the target of rural roads rehabilitation was adjusted downwards to 115 km, fewer people were to gain access to an all-weather road. However, this is not reflected in the outcome of this indicator, and neither is the overachievement of the revised rural roads target. The indicator only relates to the target for rural roads rehabilitated, which was not achieved under Part A against the project’s original target due to the change in mandate governing SCRB;  The third PDO-level indicator measures the “Average reduction in travel time for villagers to reach markets/services.” However, a multitude of factors may influence the speed with which a villager can reach markets and services, such as mode of transport, condition of vehicle, traffic, time and day of the week, weather, security level, etc. For the same reason, the tracking of this indicator in effect refers specifically to the reduced travel time on the rehabilitated road segments. 46. It is worth noting that the Transport Corridors Project (TCP) follow-on operation has incorporated lessons learned from the ERRP, and specifically addresses the above short-comings by having a clearly defined PDO with closely aligned and measurable indicators. For example, the TCP has set a numerical target for the rural population to gain access to an all-weather road. Similarly, reduction in travel time is targeted to specific road segments. 47. Improving Iraq’s capacity to manage road assets was an integral part of the project, and the on-going monitoring activities of road assets using the systems adopted under the project help inform decision-making and resource allocations on a regular basis in each of the implementing agencies. The sustainability of this monitoring system depends in large part on regularly updated information from the field, which is currently challenging in certain parts of the country. The TCP follow-on operation will continue to strengthen the operation of RAM systems thereby building the institutional capacity to properly monitor road assets beyond the implementation of the ERRP. 2.4 Safeguard and Fiduciary Compliance 48. During implementation, compliance with the Bank’s safeguards and fiduciary policies represented significant challenges for both SCRB and GDRB given the immediate post-conflict 11 conditions with weak institutional capacity and resource availability, lack of familiarity with Bank policies, and the delay in assigning technical staff and hiring safeguards specialists to support project implementation. 49. A Safeguards Audit Report was carried out by an external consulting firm and submitted to the Bank in January 2014. The report covered seven sub-projects on highway rehabilitation and bridge replacements. The report concluded that there were significant short-comings in complying with Bank safeguards policies affecting most sub-projects, particularly related to: (1) Preparation of appropriate safeguards documentation according to EA classification (2) Post-construction preparation and disclosure of safeguards documents (3) Missing or incomplete resettlement instruments (4) Lack of or limited public consultations 50. While the Bank team worked with the PMTs to develop action plans for compliance and to provide on-going safeguards training throughout the project life-cycle, delayed and incomplete reporting still affected the project. Among the measures applied in an effort to meet minimum safeguards requirements were post-construction technical reviews of bridge designs, ex-post ESIAs to verify that no harm was done to PAPs, and ex-post obtainment of signatures for voluntary donation following land acquisition. 51. The Bank’s safeguards policy on Cultural Heritage (OP/BP 4.11) was invoked when a mosque was in the right of way of constructing the Al Majd Bridge. The contractor built a new Mosque at his own expense on land donated by a local resident. 52. Overall, both PMTs were largely in compliance with the Bank’s fiduciary policies. Non- compliance with the Bank’s fiduciary requirements related to two key issues. First, SCRB’s severe delay in contracting an external auditor to review financial statements placed the project at risk of suspension of disbursement. The issue was resolved when SCRB submitted an audit report for the period from effectiveness to October 31, 2009 in November 2010 (seven months overdue). Second, lack of due diligence on the part of SCRB and the FMA led to the undetected presence of sub-contractors on the project site without prior clearance. This issue was resolved when SCRB issued a notice of cancellation to the contractor due to the contractor’s inability to meet its obligations under the contract. The Bank has also recently contracted an international auditing firm to audit the contractor’s project files to review the performance of the contractor against the payments made by the Bank under the ERRP. 2.5 Post-completion Operation/Next Phase 53. SCRB and GDRB both have the technical skills and financial means to conduct proper maintenance of project rehabilitated roads segments as part of their regular work program, even though heightened security concerns makes regular maintenance challenging in certain parts of the country. Lack of adequate road service, such as operation of weighing stations to control the access and overload of heavy axel vehicles to appropriate roads, may jeopardize the proper management of road assets. These are some of the challenges facing SCRB, in particular, in the post-operation phase (see section 4 for further discussion of risks to development outcomes). 54. The use of installed RAM systems as a planning tool in SCRB and GDRB bodes well for the sustainability of institutional capacity built at each of the implementing agencies. However, the system needs regular updating in order to be a reliable decision-making tool, and SCRB expressed concern that some areas of the country are currently too unsafe for staff members to collect the needed data. This activity will be resumed as areas become more accessible again. 12 Meanwhile, the development of a 5-year rehabilitation program is currently guiding near-term investments in the road sector at both SCRB and GDRB. 55. A newly approved Transport Corridors Project (TCP), which is currently awaiting ratification by the Iraqi Council of Ministers, builds directly on the experience and achievements of the ERRP. Sustaining and further developing local capacity is ensured by grandfathering the same PMT model and staff members into the new project. 56. The road sector in general enjoys support at the ministerial level (MoCH), where the budget envelope for road maintenance has steadily increased. At the political level, the project has succeeded in building attention to critical transport issues with the development of a national Transport Sector Master Plan. The Bank is now supporting the GoI to develop other priority areas of the transport sector, such as rail and air. 3. Assessment of Outcomes 3.1 Relevance of Objectives, Design and Implementation 57. Rating: Substantial 58. The project is based on a proper diagnosis of development priorities, which remain highly relevant today. Using a flexible design and implementation plan, the project objectives are as relevant today as they were at project start. This bodes well for the recent approval of the follow- on Transport Corridors Project, which builds on the progress achieved in the ERRP project. 59. The need to rehabilitate critical segments of the road network and restore the institutional capacity to maintain road assets was a high priority for the GoI at the time of appraisal, and remains so today. The project came on the heels of a major war and decades of sanctions and neglect causing widespread damage to roads and bridges and depleting ministries and transport facilities of equipment, machinery, furniture, and supplies. Ultimately, road users were poorly served and rural isolation increased as access to markets and services diminished. 60. On this basis, the project was prepared as an emergency operation with the specific objective of rehabilitating damaged roads and bridges and restoring institutional capacity. As the network of highways and village access roads continues to improve both in terms of rehabilitating deteriorated roads and strengthening maintenance capacity at the relevant agencies, in part due to the successful outcomes of this project, much work remains to be done. As such, the operation has stayed highly relevant to achieving country development objectives throughout the lifespan of the project. 61. The transport sector is one of the key sector priorities outlined by the GoI in the latest National Development Plan for 2013-2017. The Plan aims to support development in Iraq’s countryside by ensuring acceptable levels of infrastructure and services. This entails building and rehabilitating roads and bridges as a means to reduce trip times, accidents, and costs and to contribute to Iraq’s economic independence. 62. The first Country Partnership Strategy (CPS) between the GoI and the World Bank for the period 2013-2016 also provides evidence of continued high project relevance. Pillar 1 draws attention to the need for “supporting improvements in institutional capacity and governance […] with focused attention on governance issues at the sector level”, while Pillar 3 aims to “[…] help 13 Iraq to improve delivery of its core public services through a combination of existing infrastructure investments and institutional capacity building.” 63. The delivery of a national Transport Sector Master Plan for Iraq was a key element of the CPS and was funded as part of the ERRP. The 20-year TSMP was developed as a collaborative effort between the MoCH and the MoT. Road rehabilitation is identified as a priority in TSMP and forms part of the project activities in the follow-on TCP operation. 64. It is worth noting that the same PMT model will be used to implement the TCP project, and that the current PMT members will be grandfathered into the new PMT. This is a demonstration of continuously relevant implementation arrangements and helps ensure that the new project further develops the capacity built in the ERRP. 65. However, the outcome indicators were vaguely worded, even if adequate in tracking progress towards achieving objectives. In addition, the reliance on international consulting firms to assist in capacity building and construction supervision proved to be a challenging design element, which did not serve the project as well as it should have due to the reluctance of consultants to travel to Baghdad. Given the current country context, a similar design element could be expected to have a similar outcome in the foreseeable future and thus has not remained relevant over time. 3.2 Achievement of Project Development Objectives 66. Rating: Moderately Satisfactory 67. The project partially achieved the stated development objective of “improving the condition of road assets.” It did so by rehabilitating 194.3 km of highly damaged segments of the country's highways (57 percent and 72 percent of original and revised targets, respectively) and 119.3 km of rural road networks (53 percent and 104 percent of original and revised targets, respectively), replacing 3 temporary bridges with concrete structures at critical river crossings (100 percent and 75 percent of original and revised target, respectively), and restoring the capacity to manage and maintain road assets by developing and implementing Road Asset Management systems in SCRB and in GDRB (100 percent of target). The project provided 100 percent of the population in the targeted villages with access to an all-weather road. Finally, the project reduced travel time by 41 percent on average for rehabilitated non-rural and rural road segments under Part A and Part B, combined (82 percent of target). As such, the project largely fulfilled the PDO-level outcome indicators (Table 2). Table 2: Achievement of PDO-level Outcome Indicators Indicator Target Achieved Outcome PDO Level Improved capacity both at Development of road asset -RAM for non-rural roads in SCRB and KRG-GDRB management tools and place and operational at SCRB measured by the development their effective use to -RAM for rural and non-rural of road asset management produce adequate roads in place and operational at tools and their effective use maintenance and GDRB rehabilitation programs % of population in the target 100% 100% villages with access to an all- weather road 14 Average reduction in travel 50% 41% time for villagers to reach markets/services 68. Given the project’s emergency nature, the Technical Annex emphasized that outputs, rather than outcomes, would be used to measure success in achieving project development objectives. Yet, ever since the first ISR a number of outcome indicators have been included in the results framework. The following discussion of project achievements towards the development objectives is divided in two sections: (a) Rehabilitating roads and bridges and (b) Restoring the capacity to manage and maintain road assets. In each section, outputs and outcomes are considered together. To aid the discussion, please refer to Annex 2, which lists project outputs by component. a) Rehabilitating Roads and Bridges 69. Under Part A of the project in the Central and Southern Governorates, the project rehabilitated a total of 155.8 km of highway and 37.7 km of rural roads, representing 68 percent and 94 percent of revised targets, respectively, and installed three out of four planned bridge replacements (see Table 3). Table 3: Achievement of outputs for Part A Original Revised Achieved Achieved (% Achieved (% PART A Target Target (Km) original target) revised target) Roads rehabilitated, Non-Rural 300 km 230 km 155.8 km 52% 68% Roads rehabilitated, Rural 150 km 40 km 37.7 km 25% 94% Bridge replacements 3 bridges 4 bridges 3 bridges 100% 75% 70. Price volatility of construction material and political instability in Iraq and abroad has obstructed the work of several contractors due to a number of interrelated factors, such as insufficient supply, limited cash flow, cuts in labor cost, etc., which combined has caused great delays and occasional termination of contracts. 71. Current shortcomings are related to two contracts with on-going work: First, the double- lane Um Qasr –Al Zubair highway segment of 82 km, which had 25 km completed and open to traffic on the northbound by September 2014 according to spreadsheets received by the ICR team from the PMT; and second, the 245 meter long Al Daraji bridge, which was 35 percent complete as of June 15, 2014 according to the latest Financial Quarterly Report for Q2 submitted on August 14, 2014. 72. By the project closing date, total commitments stood at 94 percent of project allocations, demonstrating the intent to complete works given more time. Beyond planned disbursements for Q3, the SCRB has committed additional funds from its own budget towards the completion of on- going works and the fulfillment of set targets. The national budget is awaiting parliamentary approval. 73. Under Part B of the project in the Northern Governorates of KRG, the project rehabilitated a total of 38.5 km of highway and 81.6 km of rural roads, representing 100 percent and 109 percent of set targets, respectively (see Table 4). 15 Table 4: Achievement of outputs for Part B Original Revised Achieved Achieved (% Achieved (% PART B Target Target (Km) original target) revised target) Roads rehabilitated, Non-Rural 38.5 km 38.5 km 38.5 km 100% 100% Roads rehabilitated, Rural 75 km 75 km 81.6 km 109% 109% 74. Given the price escalation for construction material, funds were reallocated between disbursement categories to cover the works of the Erbil-Altun Kopri highway segment (component B1). For the same reason, project funding for village access roads only covered 63.6 km. To meet the target, GDRB completed an additional 18 km village access roads in extension of project rehabilitated rural roads as part of its own work program, thereby exceeding the target with 6.6 km. 75. Based on the above, the two core project indicators, which are tracked across all Bank- financed roads projects, were partially achieved (Table 5). In total, 194.3 km of non-rural roads and 119.3 km of rural roads were rehabilitated under the ERRP. While this achievement would be unsatisfactory against the original targets, as shown in Table 5 below, a late restructuring of the key indicators improved project achievement: The project rehabilitated 72 percent of the revised target 268.5 km of non-rural roads and 104 percent of the revised target 115 km of rural roads. Table 5: Achievement of core indicators Original Revised Achieved Achieved (% Achieved (% Core Indicator Target Target (Km) original target) revised target) Roads rehabilitated, Non-Rural 338.5 km 268.5 km 194.3 km 57% 72% Roads rehabilitated, Rural 225 km 115 km 119.3 km 53% 104 % 76. Two PDO-level outcome indicators are associated with the development objective of rehabilitating roads and bridges and both relate to the importance of providing rural populations with access to markets and services. 77. Outcome Indicator: % of population in the target villages with access to all-weather road. According to the latest ISR, the project provided 100 percent of the population in the target villages with access to an all-weather road. This indicator relates specifically to rural accessibility and therefore to the achievement of rural roads rehabilitated. See section 2.3 for a discussion of this indicator. 78. Outcome Indicator: Average reduction in travel time for villagers to reach markets/services. On average, the project reduced travel time on rehabilitated road segments by 41 percent for non-rural and rural roads under Part A and Part B, combined. This is nine percentage points short of the target 50 percent reduction in travel time (82 percent achieved). The measure of travel time reduction on rehabilitated roads is standard across Bank-projects in the road sector, and it is generally understood that this outcome indicator can be positively linked to the rehabilitation work funded by the project. 79. The ICR team was provided with the latest travel times for each road segment by the PMT for Part A (non-rural roads only) and the PMT for Part B (rural and non-rural roads). Based on this, the ICR team calculated the reduction of travel time for each road segment and across all roads to derive at a single number representing the average travel time reduction (see Table 14 in Annex 3 for a full analysis). For non-rural roads, travel time was reduced 45 percent on average 16 for Part A and Part B. For rural roads, only data for Part B was available, which showed that travel time was reduced by 33 percent. On average, travel time was reduced by 41 percent for rural and non-rural roads under Part A and Part B, combined. b) Restoring the Capacity to Manage and Maintain Road Assets 80. Improving the capacity to manage and maintain road assets is an objective, which is reflected both in the PDO and in the PDO-level outcome indicators. This speaks to the importance of restoring institutional capacity and implementing an operational system to guide and monitor the priorities for maintenance work. It also encompasses the larger objective of developing a shared vision for the wider transport sector in a national perspective. As mentioned in the beneficiary section, substantial benefits would be derived from addressing medium- to long-term policy and institutional issues, and by developing a vision for how road assets should be managed and developed beyond the emergency stage. The TA activities address these aspects of the project, even if their cost may not be reflective of their relative importance. 81. The two key outputs for the fulfillment of this objective are a Road Asset Management system and a national Transport Sector Master Plan. First, as part of establishing a RAM system, an extensive database with road characteristics and conditions and traffic counts was completed. Based on this, appropriate maintenance and rehabilitation strategies can be selected within agreed budget constraints. A 5-Year Road Rehabilitation Program was prepared using the RAM system, which also identified capacity reinforcement needs for its implementation. Finally, detailed designs and environmental and social assessments for a selection of priority roads to be included in the first year of the Road Rehabilitation Program were prepared. 82. At SCRB, the RAM system was fully installed shortly before project closing and covers non-rural roads. Five staff members from SCRB head office and four staff members from the SCRB field offices have been trained in using the HDM4 software, which supports the RAM system. At GDRB, a RAM system has been installed since 2012 and covers primary, secondary, and rural roads. Six staff members received training in RAM operation. According to the GDRB representatives at the ICR stakeholder workshop, the RAM system is regularly being used to plan future maintenance work for inclusion in the following budget cycle. 83. The completion of a national Transport Sector Master Plan has provided decision makers with a structured plan to develop an integrated multi-modal transport system for Iraq over the next 20 years. The report includes the strategies, policies, and tools needed to implement this plan. Within it, it contains a short-term plan for a 5-year period with urgently needed ‘fast-track’ investment projects for both the road sector as well as for rail, water, and air transport sectors. 84. The TSMP was developed across relevant ministries and agencies thereby leveraging strategic cooperation and commitment as the foundation for a successful outcome. By developing a shared vision for the transport sector at the national level, the TSMP has built significant capacity in the GoI as a tool for guiding future investments and policy directions. By improving its strategic national transport system, Iraq will not only help facilitate regional integration, but also offer an alternative transport corridor for international logistics and trade between East Asia and Europe. 85. These achievements fulfill the PDO objective and PDO-level indicator of restoring the institutional capacity to manage and maintain road assets. This outcome can be positively linked to the installation of road asset management systems in the implementing agencies and to the 17 broader dialogue on a national level to develop a shared vision for the transport sector guiding decision-makers in their capacity to develop policies and direct funding to development priorities. 3.3 Efficiency 86. Rating: High 87. An ex-post economic evaluation of the ERRP rehabilitation works was done measuring the economic benefits of reducing vehicle operating costs and travel time costs on the project- funded roads segments (see Annex 3 for a full analysis). Vehicle operating costs and travel time costs were estimated for the without project-alternative and the project-alternative using the Highway Development and Management Model (HDM-4) and considering the average vehicle fleet characteristics of Iraq. 88. The overall economic internal rate of return (EIRR) of the program is 52 percent. All project roads generated a satisfactory EIRR higher than the 12 percent discount rate threshold referenced in the Technical Annex. This is due to the high level of traffic on the roads, and the high impact of the road works on travel times and roughness reduction. Some of the project roads even generated an EIRR higher than 100 percent due to very high traffic on those roads (average 16,962 vehicles per day). At project appraisal, no ex-ante economic evaluation of the proposed investments was done, thus, it is not possible to compare the ex-post economic evaluation results with project appraisal estimates. 3.4 Justification of Overall Outcome Rating 89. Rating: Moderately Satisfactory 90. The achievement of project outcomes must be understood in the security context prevailing in Iraq throughout the project implementation period. Although the ERRP was financed by an IDA Credit, and not by the ITF, the following quotation from the Independent Review of the ITF1 is also relevant for the ERRP: “Providing assistance to countries in crisis, especially crises as extreme as the one in Iraq, is challenging. Intervening in these turbulent circumstances cannot be held to the same rigorous account as intervening in more peaceable circumstances where the complexities may be significant but insecurity and extreme social tensions are less pervasive.” With continuing security concerns, the country context in the Central and Southern Governorates of Iraq throughout the project implementation period has been extremely challenging. Following project approval in 2006, when conditions were expected to improve in the aftermath of the 2003 invasion of Iraq, they in fact deteriorated even further in many parts of the country with continued sectarian violence and insurgent fighting and periodic surges in military campaigns. That GDRB in KRG operated under very different, more stable conditions is evident in their timely implementation and meeting of originally set targets. 91. Given that the project indicators were formally revised, the ICR team undertook a split evaluation of the achievement of project outputs and outcomes against original and revised targets, weighted by the actual disbursement rate before and after the second restructuring in June 2012 (see Annex 2 for a full methodology and analysis). The team found that the overall achievements were moderately satisfactory against both the original and revised targets, implying 1 Independent Review of the Iraq Trust Fund—Final Report—GHK Consulting in association with Stars Orbit Consultants and Management Development—December 21, 2011. 18 that the late restructuring kept the overall rating at MS even though the project was rated satisfactory at the time of the second restructuring. 92. Under the circumstances with a number of external obstacles affecting the project, including the hostile operating environment particularly in rural areas, the unwillingness of international consulting firms to operate in Iraq, and the change in mandate for SCRB, it is quite remarkable that the project managed to disburse 85 percent and include an additional task of technical assistance in the development of a national Transport Sector Master Plan. It is worth reiterating here that while the cost for works are typically the most expensive, the importance of building and restoring Iraq’s capacity to manage and maintain road assets should carry equal weight in the overall assessment of outcomes. 93. In arriving at an overall outcome rating of moderately satisfactory, it is noted that: a) the project enjoyed a high degree of relevance of objectives and implementation with some short- comings in the design; b) the achievement of project development outputs and outcomes was moderately satisfactory given the short-comings in meeting both original and revised targets for road rehabilitation and bridge replacement under Part A of the project; and, c) the ERRP generated a 52 percent economic internal rate of return on the investment, greatly exceeding the appraisal stage benchmark, and is therefore considered highly efficient. 94. At the time of the last ISR, the DO rating was downgraded from MS to MU due to delays in receiving information on reduced travel times. It was agreed to revisit the DO rating in the ICR after the information was available. The ICR team, having received the information on travel time, which positively confirms a 41 percent average reduction in travel time across roads rehabilitated, asserts the moderately satisfactory achievement of the targeted development outcome of an average 50 percent reduction in travel time. 3.5 Overarching Themes, Other Outcomes and Impacts (a) Poverty Impacts, Gender Aspects, and Social Development 95. In the literature, it is well documented that access to good quality roads has significant economic, social, and environmental benefits. Improving road services and reducing transportation costs can connect farmers more easily to markets and contribute to economic development in rural areas while supporting regional integration. According to the Borrower ICR prepared by the GDRB, the project has accelerated farm activities and industrial development in the project area as a growing number of local residents settle along the rehabilitated roads. At the community level, access to low cost transport can improve health and education outcomes, such as reduce maternal mortality and increase school participation rates. While these impact measures may not form part of the project objectives or indicators, the benefits manifest themselves over time and have the potential to reduce poverty and engender development. 96. Three measures were tracked by the Bank project team, which did not form part of the results framework (Table 6). Table 6: Additional measures tracked throughout implementation Measure Result Local employment created 310,000 person-days Direct project beneficiaries 300,000 villagers in Central and Southern Governorates Female beneficiaries 50% of direct beneficiaries 19 97. In the Technical Annex, it was expected that civil works and subsequent maintenance activities would provide local employment opportunities. Throughout implementation, the Bank project team tracked the number of employment person-days that the project generated. According to the latest ISR, 310,000 person-days of local labor were purchased as part of the works contracts financed by the project. 98. Based on the final number of rural access roads rehabilitated, the Bank project team estimates that 300,000 villagers in Central and Southern Governorates directly benefitted from the project-financed rehabilitation works, providing them with access to an all-weather road. It is generally assumed that 50 percent of those direct beneficiaries are women. 99. These results are likely to have significant positive impacts at the local level. However, without targeted social indicators or an impact assessment, it is not possible to assess the actual impact of the project at this level. In an effort to capture such impacts, the TCP follow-on operation includes specific indicators tracking the number of fatalities on roads rehabilitated and person-days of employment created. (b) Institutional Change/Strengthening 100. The ERRP has effected institutional change at the agency and political level with potential long-term impacts for institutional development. At the agency level, a deeper understanding of the purpose for giving due attention to safeguards measures at the design stage has taken root. According to participants in the ERRP ICR stakeholder workshop the “government is keen on adopting policies that are similar to those applied in the ERRP.” In GDRB, for example, an EMP/ESIA is now required for all new roads funded. At the political level, the project has succeeded in building attention to critical transport issues. The development of a Transport Sector Master Plan has benefitted not only the road sector, which is experiencing a surge in maintenance budget, but also other sectors, such as aviation and railway. The Bank is now supporting the GoI to develop these priority areas of the transport sector. (c) Other Unintended Outcomes and Impacts (positive or negative) 101. As part of the rehabilitation of the Um Qasr – Al Zubair highway segment, there was a need for higher quality asphalt that would hold up to heavy traffic even at the peak of the summer season in 50 degrees centigrade heat. The challenge was to source high-quality bitumen to be mixed into the asphalt shortly before application. An analysis performed by an international consultant firm concluded that reforming the oil refineries to produces better bitumen as part of the project was not a viable option, and neither was importing bitumen from the Gulf countries as bitumen does not transport well. From this gap in the supply chain, arose the opportunity for a local entrepreneur to produce a high-quality polymer to be mixed in the bitumen for better road performance. The company now successfully sells and distributes high-quality polymer to other roads projects in Iraq. As a testimony to the success of the piloting of such asphalt under ERRP, Basra Governorate has made it mandatory to use high-performing asphalt on all road construction and maintenance work. 3.6 Summary of Findings of Beneficiary Survey and/or Stakeholder Workshops 102. An ICR Stakeholder Workshop was held in Beirut, Lebanon on September 22-23, 2014. The workshop was attended by key members of the PMT for Part A and Part B, respectively, as well the Bank project team and the ICR team. The discussion centered around six key topics: (1) 20 Project design, (2) World Bank Supervisory and support role, (3) Borrower performance in project execution, (4) procurement and contractor / consultant issues, (5) compliance with World Bank policies, and (6) sustainability and post-operation phase (see Annex 6). The bullet points below summarize the key lessons learned:  A number of factors were identified that could have enhanced the design at the preparation stage. This includes: wording the indicators for improved monitoring and evaluation; including generous price contingencies to cover rising security costs and price escalation of construction material; and in a fragile environment with on-going conflicts relying more on local and regional consulting firms willing and able to do site visits;  The Bank’s safeguards training modules should be made available to all relevan t parties, including local SCRB engineers who are in a position to observe safeguards issues on-the- ground on a regular basis;  Continued needs assessments are essential for successful follow-on operations, even in cases where the project management unit is grandfathered into the next generation project with the same team;  A number of proactive measures were identified to better attract international expertise, such as: reduce the security risk by allowing international consultants to work from home and apply creative measures to relay on-the-ground information; combine components to raise the contract award; identify potential consultants beforehand and invite them to submit bids. 4. Assessment of Risk to Development Outcome 103. Rating: Substantial 104. In general, the SCRB and the GDRB have the technical skills and financial means to maintain the roads network, including the segments rehabilitated under ERRP. The budget for road maintenance has increased for both SCRB and GDRB, showing the current political will to invest in the road sector. Furthermore, the implementation of RAM systems in SCRB and GDRB has greatly improved Iraq’s institutional capacity to manage and maintain road assets. 105. A number of external factors place the project outcomes at significant risk of not being sustained. These mainly relate to the inherent security risks affecting Iraq at the time of writing this ICR and the foreseeable future. However, there are also a number of other factors importing the risks to development outcomes as discussed below. Table 7 shows the ICR team’s best assessment of the risk to development outcomes for Part A and Part B. Table 7: Risk to development outcomes for Part A and Part B Outcome Part A Part B Rehabilitation of roads and bridges High Moderate Capacity to manage and maintain road assets Substantial Moderate 106. Particularly for Part A, the risk to development outcomes is elevated. Concerning the risk to rehabilitated roads and bridges, the risk relates primarily to axel load control, which is a key element of sustaining any investment in the road sector. For a long time there has been an institutional void in assigning responsibility for operation of the weighing stations, which is leading to a lack of enforcement to control the access and overloading of heavy axel vehicles, particularly from the country’s southern ports of entry. This is a key risk factor for premature damage of rehabilitated roads. However, as of November 2014, the MoCH has ordered that all weighing stations be operated by each Governorate, thereby removing the responsibility from 21 SCRB. Furthermore, the heightened security level is cause for concern as there have been recent reports of bombing of weighing stations. 107. Concerning the restored capacity to manage and maintain road assets, the risk lies in the need for continued updating of the RAM database to remain relevant as a planning and decision- making tool. Currently, it is too dangerous for SCRB staff to visit certain areas of the country to collect data to update the RAM system because of security issues affecting those areas; putting the RAM system at risk of becoming obsolete. One mitigating factor is the follow-on Transport Corridors Project, which will strengthen the continued updating and use of the databases, which in-turn will help to sustain and institutionalize the benefits of the RAM systems. 108. For Part B, the risk to development outcomes is considered moderate given the more stable political situation and the lower level of security concerns. GDRB enjoys a high degree of institutional support and has experienced a significant increase in the maintenance budget. These factors support the long-term flow of net benefits to road users. 5. Assessment of Bank and Borrower Performance 5.1 Bank Performance (a) Bank Performance in Ensuring Quality at Entry 109. Rating: Moderately satisfactory 110. At the project preparation stage, the Bank team employed due diligence in basing the project on solid sector analysis with rigorous risk mitigation measures to address the weak institutional capacity of the implementing agencies and other obstacles (security, absence of Bank field supervision, etc.). The Bank team worked closely with the client to advance project readiness. The sequenced implementation design allowed for flexibility in the identification of road and bridge sub-projects, and some sub-projects had detailed engineering designs and tendering packages ready prior to approval to kick-start implementation. Provisions for procurement, financial management, and safeguards were all adequate at the design stage. However, short-comings at the preparation stage relate to the wording of the outcome indicators, which were vague even considering that the ERRP was an emergency operation. Furthermore, the reformulated outcome indicators were added post-appraisal without formal restructuring. Overall, though, the indicators were adequate in tracking progress towards project objectives, and the Technical Annex did allow for the subsequent introduction of outcome indicators. In addition, it is apparent that the Bank team overestimated the extent to which international consulting firms were willing to operate in Iraq. Given the recent reengagement with Iraq as a client country, the Bank team did foresee the risk of ratification delay; however, beyond allowing for retroactive financing of project related expenses, it is not clear what further measures the Bank team could have taken to bridge the gap from project approval to effectiveness. (b) Quality of Supervision 111. Rating: Moderately satisfactory 112. The Bank project team undertook 19 supervision missions in 7 years, or 2.7 missions per year: a rate above the required two missions per year, though many of the missions took place outside of Iraq due to the security situation. Such proactive supervision demonstrates a high level of commitment from the Bank’s side, but it also proved necessary to support the PMTs in the 22 implementation process. Throughout the project, the Bank team consistently worked with the PMTs to develop action plans for compliance and meeting key milestones for outputs and outcomes. Furthermore, the FMA arrangement was effective in monitoring and reporting the project’s progress. Regardless, there were project short-comings in meeting Bank safeguards and fiduciary requirements relating to the preparation of proper safeguards documentation, lack of or limited consultation processes, and ex-post disclosure procedures. While the responsibility for compliance is clearly borne by the Client, there is no apparent explanation for the Bank team allowing the project to continue despite on-going lack of compliance. This is supported by the reportedly low frequency of mission participation by the project-assigned safeguards specialists and the inadequate attention to safeguards issues in the ISRs as compliance is rated S or MS throughout the project period. On a positive note, the Bank team delivered high quality technical assistance to the PMTs by reviewing and amending TORs, tender documents and project deliverables, particularly for the RAM systems and the Transport Sector Master Plan. This was confirmed by members of both PMTs, who expressed great satisfaction with the Bank’s performance throughout the project in the ICR stakeholder workshop. (c) Justification of Rating for Overall Bank Performance 113. Rating: Moderately satisfactory 114. The overall rating for Bank performance is moderately satisfactory. The Bank’s performance during project preparation was moderately satisfactory given the due attention afforded to government development priorities, sector analysis, flexibility in design, implementation arrangements, and risk mitigation measures in procurement and financial management issues. The Bank’s performance during project supervision was moderately satisfactory due to the short-comings in proactively resolving Client’s non-compliance with safeguards and fiduciary requirements. Regardless, the Bank project team demonstrated a high level of commitment with 19 supervision missions and supported the PMTs with high quality technical assistance. The continued partnership between the Bank and the PMTs in the TCP follow-on operation is a demonstration of the trust developed for continued country engagement. 5.2 Borrower Performance (a) Government Performance 115. Rating: Moderately unsatisfactory 116. The significant ratification delay by the GoI placed the project at risk of cancellation. The project was declared effective 15 months overdue, following which the project was re-launched. The delay in ratification caused significant implementation delay, particularly for Part A of the project, and partly affected the need for project restructuring. Ratification delay was not specific to the ERRP, but rather common for other IDA projects in Iraq as well.2 While it is not clear what caused the ratification delay, it may be difficult to assume that it relates to low GoI commitment. Most likely, it is a result of the overall country context at the time. 117. Following effectiveness, the GoI has performed satisfactorily, showing a high level of commitment to the transport sector in general. Under the TCP follow-on operation, the 2 Effectiveness of the emergency education sector loan was delayed 23 months, the KRG Dokan and Derbandikhan emergency hydropower project was delayed 10 months, the emergency electricity project was delayed 9 months, and the emergency water sector project was delayed 15 months. 23 partnership between the GoI and the Bank will continue to evolve and the Bank is now supporting the GoI in other areas of the transport sector as well, such as air and rail. (b) Implementing Agency or Agencies Performance 118. Rating: Moderately satisfactory 119. At project start, SCRB lacked the financial and technical empowerment to advance project implementation in spite of ratification delay. High turnover of PMT staff members depleted the skills and capacities built through training sessions on procurement, financial management and safeguards. The delay in assigning engineering and other technical staff as well as contracting an environmental specialist and independent auditor to support the PMT further delayed implementation and weakened overall compliance with Bank policies. However, it is noticeable that out of 23 works contracts, only a few contracts experienced poor contractor performance, which led to work sites being vacated or sub-contracted. This is due to committed PMT staff members willing to take on a steep learning curve to familiarize themselves with Bank procurement policies, coupled with a high-level of Bank support. Given the overall challenging operating environment, it is commendable that the SCRB has shown high commitment to the project since the initial period of inadequate staffing and resource allocation, and partly achieved target objectives disbursing three-fourths of the funds allocated to Part A. 120. GDRB delivered Part B of the project on-time and within budget, using its own funds to meet project targets when price adjustments for construction material impacted the achievement of actual outputs. GDRB demonstrated a high level of commitment since project approval with the tendering of several roads sub-projects in advance of project effectiveness. Nesting the development of RAM systems under another KRG-funded activity was a creative solution to mitigate the effects of higher costs for works. Low turnover of PMT staff members has retained the capacity built at the PMT, even though short-comings in safeguards compliance also affected Part B of the project. The GDRB met all project objectives for Part B. (c) Justification of Rating for Overall Borrower Performance 121. Rating: Moderately satisfactory 122. The overall rating for Borrower performance is moderately satisfactory due to the overall outcome rating being moderately satisfactory. Despite a challenging implementation environment with a number of external factors affecting the project, it is noteworthy that the project largely achieved the PDO and PDO-level indicators with short-comings in road and bridge rehabilitation under Part A. This is attributable to two dedicated and competent PMTs supported by a committed GoI and by a responsive Bank team. 6. Lessons Learned Fact Finding Lesson Recommendation Effectiveness was Partly because Timely ratification is Closer relations between the delayed 15 months, ratification was important to avoid Bank and the GoI as well as a necessitating the delayed, the implementation more visible presence of the project to be re- project needed two delay. PMTs in Baghdad may help launched as project extensions and to overcome ratification delay activities had come was not fully in the TCP follow-on 24 Fact Finding Lesson Recommendation to a complete stop. disbursed at operation. project closing. During the The price Generous price Bank teams should consider restructuring it was contingencies contingencies are building in price necessary to revise were inadequate to necessary to control contingencies both at the the targets and cover the cost overrun in an project and component level. reallocate between escalating costs environment where disbursement for construction sourcing and categories. material. mobilizing material is challenging. The implementation The unwillingness More attention should Proactive measures include: arrangements relied of international be paid to attract (a) reduce the security risk by on international consulting firms to much-needed allowing international consulting firms to operate in Iraq international consultants to work remotely deliver critical delayed project expertise by reducing and apply creative measures support services implementation the security risk and to relaying on-the-ground related to and weakened increasing the interest information; (b) combine construction compliance with level of bidders. components to raise the supervision and Bank policies. contract award; and (c) technical In a fragile identify potential consultants assistance. environment with on- beforehand and invite them to going conflicts it may submit bids. be more practical to rely on local and Engage with local and regional consulting regional consulting firms with firms willing and able the linguistic and cultural to conduct visits to understanding of the local project sites. project context. Non-compliance Client supervision In a challenging The Bank’s safeguards with Bank was inadequate operating modules should be made safeguards policies due to a number of environment, it is available to all relevant affected many reasons, including important to be able parties, including local works sub-projects lack of familiarity to rely on local agents engineers, who are in a financed by the with safeguards to monitor safeguards position to observe ERRP. policies and issues in the absence safeguards issues on-the- difficulty of Bank-led ground on a regular basis. supervising supervision missions. progress on the In the follow-on TCP ground. operation, the TORs for the FMA have been broadened to include reporting on safeguards compliance. Significant delay in When a new High level Bank teams should processing Minister of commitment is proactively engage payments to Construction and crucial for effective ministerial-level support to contractors led to Housing was project ensure smooth disbursement delay. installed in implementation, implementation. This is December 2010, particularly in fragile particularly important in the issue was operational fragile operational 25 Fact Finding Lesson Recommendation brought to his environments marked environments. attention. by conflict. Following this, the average time for processing payments was significantly reduced and disbursement picked up. The inclusion of the This late addition Remaining flexible, Operations in fragile national Transport of an important engaging in countries should be designed Sector Master Plan, and continuous dialogue, with the flexibility to allow which was added comprehensive and showing the project to evolve over during the second technical readiness to adjust to time while ensuring that restructuring in assistance new circumstances objectives are directly June 2012, came deliverable was should be a top relevant to changing priorities late in the project made possible by priority when on the ground. implementation the close dialogue implementing period. between the Bank projects in Iraq. team and the GoI and the readiness of the team and Bank to respond to client demands. 7. Comments on Issues Raised by Borrower/Implementing Agencies/Partners (a) Borrower/implementing agencies 123. The ICR team has no comments to the Project Completion Report received from the GDRB. The Bank team did not receive a Borrower ICR from SCRB. 124. The draft ICR was shared with both PMUs. GDRB had no further comments. The SCRB submitted comments on the draft ICR in track changes (saved in internal project files in WBDocs). SCRB’s main points related to:  Third restructuring: According to SCRB, the project was restructured on January 16, 2014 to reallocate funds between disbursement categories for Part A of the project. However, the ICR team could not locate Bank records to indicate this. Possibly, there was a final allocation of remaining contingency funds to cover the last phase of disbursements, which would not entail a formal restructuring. Additionally, if the reallocation did not affect the project’s objectives, components or indicators, it is possible that the reallocation was approved without a formal restructuring.  Km of rural roads rehabilitated under Part A: According to SCRB, a total of 40.7 km of rural roads were rehabilitated under Part A of the project, implying that an additional 3 km of rural roads were rehabilitated and thereby meeting the revised target. The discrepancy relates to the al-Raisa road, which is now said to be 28 km in length, and not 25 km as previously communicated by SCRB in documents received for the economic 26 analysis. As the ICR team is not in a position to verify the actual length of the rehabilitated al-Raisa road segment, the 37.7 km initially communicated will be recorded as the final achievement.  Final project cost by component: SCRB provided an updated table with project costs by component. The figures are included in the final ICR, Annex 1. (b) Cofinanciers 125. Not applicable. (c) Other partners and stakeholders 126. Not applicable. 27 Annex 1. Project Costs and Financing (a) Project Cost by Component (in USD Million equivalent) Actual/Latest Appraisal Estimate Percentage of Components Estimate (USD (USD millions) Appraisal millions)* PART A: 15 Central and 81.53 66.29 81 Southern Governorates A.1 Highway Rehabilitation 44.84 46.89 105 A.2 Village Access Roads 18.90 8.57 45 A.3 Bridge Replacements 14.18 7.34 52 A.4 Road Asset Management and 1.85 2.29 124 Road Rehabilitation Programming A.5 Project Management Support 1.77 1.20 68 PART B: Kurdistan Region 40.79 47.87 117 B.1 Rehabilitation and Upgrading 28.84 40.98 142 of Erbil-Altun Kopri Road B.2 Village Access Roads 9.84 6.49 66 B.3 Road Asset Management and 0.99 0.05 1 Road Rehabilitation Programming B.4 Project Management Support 1.13 0.35 31 Total Baseline Cost 122.32 Physical Contingencies 0.00 0.00 0.00 Price Contingencies 12.68 0.00 0.00 Total Project Costs 135.00 114.16 Front-end fee PPF 0.00 0.00 .00 Front-end fee IBRD 0.00 0.00 .00 Total Financing Required 135.00 114.16 85 * Based on (i) figures provided by SCRB for Part A, and (ii) the Financial Quarterly Report Q2 2014: Cumulative disbursements for Part B. The Actual/Latest Estimate (in USD million equivalent) matches the historical disbursement recorded in Client Connection. (b) Financing Appraisal Actual/Latest Type of Estimate Estimate Percentage of Source of Funds Cofinancing (USD (USD Appraisal millions) millions) Funds and Borrower 0.00 0.00 0 staff salary International Development 135.00 114.16 85 Association (IDA) 28 Annex 2. Outputs by Component Table 8: Part A - Outputs by Component # Component Original Target End Target Output Comments A1 Highway 300 km 230 km Total completed: 155.8km Rehabilitation of the Um Qasr – Al Zubair Rehabilitation Kut – Amarah: 10km highway is still on-going, however, 25 km Kut – Nassiriah: 11km on the north bound route are fully Kut – Baghdad: 19km completed and open to traffic. Diwaniah – Daghara: 10km Diwaniah – Samawa: 10km Samawa – Diwania: 15.5km Karbala – Mussayeb: 21.2km Samawa – Nasiriya: 20km Al Zubair – Um Qasr: 0km Um Qasr – Al Zubair: 25km Najaf – Karbala: 14.1km A2 Village Access 150 km 40 km Total completed: 37.7km Given a change in SCRB mandate, all Roads Al-Aziya – Rahaima: 12.7km subsequent village access roads had to be Al-Raeda: 25km cancelled. A3 Bridge 3 bridges 4 bridges Total completed: 3 bridges Al Daraji bridge is 35 percent complete and Replacements Al Majd: Completed still under construction (Source: Q2 Al Ibrahimia: Completed Financial Report) Suq Shaalan: Completed Al Daraji: On-going A4 Road Asset RAM in place and RAM in place RAM for non-rural roads in place and operational As rural roads are no longer under SCRB’s Management and operational and operational mandate, RAM system for rural roads was Road cancelled. Rehabilitation Programming A5 Project Provision of Provision of National Transport Sector Master Plan: Short- Management international international term and long-term master plan reports delivered Support expertise, capacity expertise, building, office capacity Various workshops and training sessions carried and building, office out communication and equipment. communication Annual audit reports delivered equipment 29 Table 9: Part B - Outputs by Component # Component Target (not revised) Output Comments B1 Rehabilitation 38.5 km Total completed: 38.5km Completed as planned. The GDRB allocated and Upgrading Erbil – Altun Kopri: 38.5km US$ 1,469,115 (4% of project cost) from own of Erbil-Altun budget to cover price adjustments for construction Kopri Road materials for Erbil-Altun Kopri Road. B2 Village Access 75 km Total completed: 63.6km The GDRB financed an additional 18 km in Roads Erbil: Dween, Babajijk, and Afiryan 17.1km extension of project rehabilitated roads using their Dohuk: Neawok, Badrea, Bearkholy, own budget. Thereby, the project was able to reach Girdaseen Road + Lakan, Bazerazera, 27.1km beyond the 75 km target to achieve 81.6 km of Esmawa Road rehabilitated rural roads. Sulaymaniya: Gligal, Pishta, Snor, Parween Road 19.4km B3 Road Asset RAM in place and RAM in place and operational. RAM system completed as part of GDRB-funded Management and operational activity to prepare a comprehensive Road Master Road Plan. TORs and final output reviewed by WB task Rehabilitation team. Programming B4 Project Provision of international Various workshops and training sessions carried out Technical assistance and capacity building Management expertise, capacity building, activities joined with B.3. Support office and communication Annual audit reports delivered. equipment. 30 Split Evaluation of Achievement of Project Outputs and Outcomes 127. A split evaluation of the project output and outcomes against both original and revised objectives is presented below in Table 11, as recommended for projects with formally revised indicators. To assist in arriving at an overall outcome rating for the project, separate outcome ratings (against original and revised project objectives) were weighted in proportion to the share of actual credit disbursements made in the periods before and after approval of the revision (June 29, 2012). As stipulated in the ICR Guidelines, each objective was given equal importance in the overall weighting regardless of the cost of the component to which it relates. 128. Actual credit disbursements reached US$ 114 million by project closing date, implying that the achievements before the second restructuring will be weighted 76 percent (87 million / 114 million * 100) and achievements after the restructuring will be weighted 24 percent (27 million / 114 million *100). 129. The results framework was used as the basis for including appropriate indicators in the evaluation (see section F in the Data Sheet), but the ICR team made certain modifications in a conservative effort not to bolster a positive outcome of the evaluation. Two indicators were purposely excluded: 1) The duplication of an indicator to track the development of Road Asset Management systems at the PDO-level and intermediate level was only included once in the evaluation so as not to double-count the satisfactory outcome; and 2) the indicator tracking “% of population with access to an all -weather road” was left out so as not to count the “100 percent achieved” satisfactory outcome, since the indicator is inherently weak, as described in section 2.3. The final three “indicators” included in the results framework were also excluded given their late addition without set targets. As explained in section 1.3, these indicators were introduced in a Bank-wide exercise to incorporate core indicators in on-going projects. 130. The ICR team used the cutoffs presented below in Table 10 to rate the achievement of each objective in the split evaluation. Table 10: Split evaluation rating framework % Achieved Rating 0 – 24 Highly Unsatisfactory 25 – 49 Unsatisfactory 50 – 74 Moderately Unsatisfactory 75 – 89 Moderately Satisfactory 90 – 109 Satisfactory > 110 Highly Satisfactory 131. Overall, the split evaluation shows that project achievements before and after the restructuring were moderately satisfactory. It is noticeable that the restructuring resulted in only a minor improvement in the achievement of the non-rural roads target, and even a set-back in the achievement of the bridge replacements target. The only significant improvement achieved with the restructuring was in the fulfillment of the rural roads target. Revising the indicators earlier may have improved the rating of project outcomes more markedly. 31 Table 11: Split evaluation of achievement of project outputs and outcomes Key Original Revised Achieved Achieved Achieved Rating against Rating against Overall Comments Indicator Target Target against against Original PDOs Revised PDOs original revised target (%) target (%) Rating Non-rural 338.5 268.5 194.3 57% 72% Unsatisfactory Moderately Small roads (km) (2) unsatisfactory improvement (3) Rural roads 225 115 119.3 53% 104% Unsatisfactory Satisfactory (5) Significant (km) (2) improvement Bridges (#) 3 4 3 100% 75% Satisfactory (5) Moderately Small setback satisfactory (4) Road Asset Completed Completed Completed 100% 100% Satisfactory (5) Satisfactory (5) No change Managemen for SCRB for SCRB for SCRB t system and GDRB and GDRB and GDRB National - National National - 100% - Satisfactory (5) New Transport TSMP plan indicator Sector completed completed Master Plan Reduced 50% 50% 41% 82% 82% Moderately Moderately No change travel time satisfactory (4) satisfactory (4) Rating Moderately Moderately No change Value satisfactory (4) satisfactory (4) Weight (% 76% 24% 100% disbursed before/after PDO change) Weighted 3.04 0.96 4 value Final rating Moderately Late revision (rounded) satisfactory keeps the rating at MS 32 Annex 3. Economic and Financial Analysis 132. The ex-post economic evaluation of the Emergency Road Rehabilitation Project rehabilitation works was done measuring the economic benefits of reducing vehicle operating costs and travel time costs on the project roads produced by the project investments. Vehicle operating costs and travel time costs were estimated for the without project-alternative and the project-alternatives using the Highway Development and Management Model (HDM-4) relationships considering the average vehicle fleet characteristics of Iraq. At project appraisal, no ex-ante economic evaluation of the proposed investments was done, thus, it is not possible to compare the ex-post economic evaluation results with project appraisal estimates. 133. Table 12 shows the basic road characteristic of the Part A and Part B project roads in terms of length, width and traffic. The project roads carried on average 7,654 vehicles per day, of which 11 percent are heavy vehicles, and have an average width of 7.1 m. Table 12: Road characteristics Latest Latest Latest Traffic Traffic Traffic Light Heavy Road Length Width Vehicles Vehicles Total Name Part (km) (m) (veh/day) (veh/day) (veh/day) Kut – Amarah A 10.0 8.0 5,641 1,347 6,988 Kut – Nassiriah A 11.0 7.0 3,314 586 3,900 Kut – Baghdad A 19.0 7.0 13,858 2,825 16,683 Diwaniah – Daghara A 10.0 7.3 4,550 405 4,955 Diwaniah – Samawa A 10.0 7.2 6,345 860 7,205 Samawa – Diwania A 15.5 7.3 15,493 2,755 18,248 Karbala – Mussayeb A 21.2 7.0 14,777 1,186 15,963 Samawa – Nasiriya A 20.0 7.3 10,297 1,005 11,302 AL - Zubair - Um Qasr* A 41.0 7.3 8,503 866 9,369 Um Qasr – Az Zubair * A 41.0 7.3 7,759 735 8,494 Najaf – Karbala A 14.1 7.3 11,487 1,034 12,521 Al-Aziya – Rahaima A 12.7 6.0 Al-Raisa access road A 25.0 6.0 Erbil – Altinkopri highway B 38.5 7.5 3,356 6,234 9,590 Dween, Babajijk, Afiryan B 17.1 7.0 120 120 240 Neawok, Badrea, Telbok, Perkoly, Qarabajer, Lakan, Bazerazera, Ismawa B 27.1 7.0 180 120 300 Gligal, Pishta, Snor, Parween B 19.4 7.0 250 250 500 Total 352.6 7.1 6,223 1,431 7,654 Latest traffic for Part A roads is for 2013 Latest traffic for Part B roads is for 2010 134. Table 13 presents the estimated annual traffic growth rate on the project roads in recent years. On average the average annual daily traffic has grown at 27% per year from around 2008 to 2013, which is a very high traffic growth rate explained by the suppressed travel at the start of the project. 33 Table 13: Annual traffic growth rate Road Traffic Total Traffic Total Annual Growth Name Year (vehicles/day) Year (vehicles/day) Rate (%) Kut – Amarah 2006 3,054 2013 6,988 13% Kut – Nassiriah 2006 4,907 2013 3,900 -3% Kut – Baghdad 2006 3,714 2013 16,683 24% Diwaniah – Daghara 2009 3,692 2013 4,955 8% Diwaniah – Samawa 2009 3,797 2013 7,205 17% Samawa – Diwania 2009 10,055 2013 18,248 16% Karbala – Mussayeb 2009 2,351 2013 15,963 61% Samawa – Nasiriya 2008 3,216 2013 11,302 29% Al - Zubair - Um Qasr 2010 1,455 2013 9,369 86% Um Qasr – Al Zubair 2010 1,455 2013 8,494 80% Najaf – Karbala 2009 4,630 2013 12,521 28% Al-Aziya – Rahaima Al-Raisa access road Erbil – Altinkopri highway 2007 5,110 2010 9,590 23% Dween, Babajijk, Afiryan 2007 200 2010 240 6% Neawok, Badrea, Telbok, Perkoly, Qarabajer, Lakan, Bazerazera, Ismawa 2007 220 2010 300 11% Gligal, Pishta, Snor, Parween 2007 350 2010 500 13% Average 2008 2,545 2012 7,654 27% 135. The project roads were in poor condition in need of rehabilitation, reconstruction or paving. Before the road works the average travel time was 36 minutes (average speed of 42 km per hour) and after the road works the average travel time decreased to 21 minutes (average speed of 75 km per hour), representing an average decrease of 41% in travel times with the project. Table 14 presents the estimated travel times on the project roads. Table 14: Travel time Without With Road project Project Reduction Name (minutes) (minutes) (%) Kut – Amarah 13 7 44% Kut – Nassiriah 14 8 43% Kut – Baghdad 24 13 46% Diwaniah – Daghara 13 7 44% Diwaniah – Samawa 13 7 44% Samawa – Diwania 20 11 44% Karbala – Mussayeb 26 14 46% Samawa – Nasiriya 25 14 46% Al - Zubair - Um Qasr 51 30 41% Um Qasr – Al Zubair 51 30 41% Najaf – Karbala 18 10 47% Al-Aziya – Rahaima Al-Raisa access road Erbil – Altinkopri highway 50 30 40% Dween, Babajijk, Afiryan 60 30 50% Neawok, Badrea, Telbok, Perkoly, Qarabajer, Lakan, Bazerazera, Ismawa 70 45 36% Gligal, Pishta, Snor, Parween 50 35 30% Total 36 21 41% 34 136. Table 15 presents the contract construction costs and the actual construction costs of the road works. On average, the actual construction costs were very similar to the contract costs with and Actual per Contract costs ratio equal to 1.05. The average actual cost of the rehabilitation works was US$185,391 per km, of the reconstruction works was US$446,890 per km and of the paving costs was US$100,218 per km. The average actual cost per km of the project roads was US$327,897 per km. The rehabilitation works comprised of drainage works, asphalt patching, milling of bleeding & rutting & upheaval areas, treatment of crack, side slope treatment, stabilizing shoulders, asphalt concrete leveling & binder &wearing courses, and road furnishing (Marking traffic sign). The reconstruction works comprised of milling, sub-base course, two layers of crushed stone as base course, asphalt binder and wearing courses, drainage repairs, Road furnishings (guard rail ,traffic signs & marking), and milled materials for shoulders. The paving works comprised of new construction of 20cm sub-base layer + 20cm crushed stone layer + Double bituminous surface dressing layers. The widening works comprised new construction of the right side parallel of the old road side. Table 15: Construction costs Contract Actual Actual/ Actual Road Cost Cost Contract Cost Road Work (US$ per Name Type (US$ million) (US$ million) Ratio km) Kut – Amarah Rehabilitation 2.5 2.4 0.96 237,200 Kut – Nassiriah Rehabilitation 2.1 2.1 0.98 186,636 Kut – Baghdad Rehabilitation 3.1 3.3 1.05 171,211 Diwaniah – Daghara Rehabilitation 1.3 1.2 0.92 122,500 Diwaniah – Samawa Rehabilitation 2.1 2.1 0.97 205,800 Samawa – Diwania Rehabilitation 2.8 2.5 0.90 161,677 Karbala – Mussayeb Rehabilitation 3.5 3.4 0.97 158,726 Samawa – Nasiriya Rehabilitation 4.2 4.8 1.12 238,000 Al - Zubair - Um Qasr Reconstruction 18.4 18.3 1.00 446,890 Um Qasr – Al Zubair Reconstruction 18.4 18.3 1.00 446,890 Najaf – Karbala Rehabilitation 2.3 2.0 0.86 142,766 Al-Aziya – Rahaima Rehabilitation 2.0 1.9 0.94 146,220 Al-Raisa access road Rehabilitation 5.9 6.7 1.14 268,560 Erbil – Altinkopri highway Widening 34.9 40.7 1.17 1,057,482 Dween, Babajijk, Afiryan Paving 2.0 2.0 1.01 118,479 Neawok, Badrea, Telbok, Perkoly, Qarabajer, Lakan, Bazerazera, Ismawa Paving 1.8 1.8 1.00 67,838 Gligal, Pishta, Snor, Parween Paving 2.3 2.2 0.97 114,335 Total 109.6 115.6 1.05 327,897 137. The construction works had an average duration of 17 months. Table 16 presents the start year of the construction and the construction duration of the project roads. The construction of the Al – Zubair – Um Qasr and Um Qasr – Az Zubair roads is ongoing and the actual progress rate is 52%. 35 Table 16: Construction duration Construction Construction Road Start Year Duration Name (year) (months) Kut – Amarah 8002 12 Kut – Nassiriah 8002 13 Kut – Baghdad 8002 17 Diwaniah – Daghara 2010 6 Diwaniah – Samawa 2010 12 Samawa – Diwania 2011 11 Karbala – Mussayeb 2011 9 Samawa – Nasiriya 2011 33 Al - Zubair - Um Qasr 2011 32 Um Qasr – Al Zubair 2011 32 Najaf – Karbala 2010 6 Al-Aziya – Rahaima 2009 21 Al-Raisa access road 2009 21 Erbil – Altinkopri highway 2008 26 Dween, Babajijk, Afiryan 2008 12 Neawok, Badrea, Telbok, Perkoly, Qarabajer, Lakan, Bazerazera, Ismawa 2008 12 Gligal, Pishta, Snor, Parween 2008 12 Total 17 138. Table 17 presents the resulting economic evaluation results in terms of Economic Internal Rate of Return (EIRR). All project roads generated a satisfactory EIRR higher than the 12% discount rate threshold due to the high traffic of the roads, and the high impact of the road works in travel times and roughness reduction. Some of the project roads generated an EIRR higher than 100% due to the very high traffic of these project roads (average 16,962 vehicles per day). The overall EIRR of the program is 52%. Table 17: Ex-post economic evaluation results Road EIRR Name (%) Kut – Amarah 43% Kut – Nassiriah 29% Kut – Baghdad > 100% Diwaniah – Daghara 67% Diwaniah – Samawa 58% Samawa – Diwania > 100% Karbala – Mussayeb > 100% Samawa – Nasiriya 84% Al - Zubair - Um Qasr 37% Um Qasr – Al Zubair 33% Najaf – Karbala 33% Al-Aziya – Rahaima Al-Raisa access road Erbil – Altinkopri highway 36% Dween, Babajijk, Afiryan 13% Neawok, Badrea, Telbok, Perkoly, Qarabajer, Lakan, Bazerazera, Ismawa 19% Gligal, Pishta, Snor, Parween 19% Total 52% 36 Annex 4. Bank Lending and Implementation Support/Supervision Processes (a) Task Team members Responsibility/ Names Title Unit Specialty Lending Robert Bou Jaoude Program Coordinator SARFM Karim-Jacques Budin Consultant MNSTI Majed El-Bayya Lead Procurement Specialist ECSO2 Mutasem El-Fadel Consultant MNSEE Mohammed D. E. Feghoul Consultant SASDU Cornelis Kruk Consultant AFTTR Thouria T. Nana-Sinkam Temporary MNSTI Knut Opsal Lead Social Development Specialist AFTCS James A. Reichert Senior Infrastructure Specialist EASNS Hany Shalaby Consultant AFTN2 Terje Wolden Consultant AFTTR Supervision/ICR Soran Hama Tahir Ali Operations Officer MNSTI Nazaneen Ismail Ali Senior Procurement Specialist MNAPC Maya Boulos Boulos Financial Management Specialist MNAFM Ibrahim Khalil Dajani Senior Operations Officer MNSTI Majed El-Bayya Lead Procurement Specialist ECSO2 Mona El-Chami Sr Financial Management Specialist MNAFM Mutasem El-Fadel Consultant MNSEE Mohammed D. E. Feghoul Consultant SASDU Natasha Hafez Program Assistant MNARS Jerome Leyvigne E T Consultant MNSSD Jad Raji Mazahreh Sr Financial Management Specialist MNAFM Knut Opsal Lead Social Development Specialist AFTCS Amanj Gh. Mohammed E T Consultant MNAPC Qazaz James A. Reichert Senior Infrastructure Specialist EASNS Colin S. Scott Lead Specialist OPSOR Terje Wolden Consultant AFTTR Azeb Yideru Program Assistant MNSTI Senior Social Development Carolyn Winter MNSSU Specialist Dariusz Kobus Consultant MNSTI Samia al-Duaij Consultant MNSF1 Tracy Hart Senior Environmental Specialist MNSEN 37 (b) Staff Time and Cost Staff Time and Cost (Bank Budget Only) Stage of Project Cycle USD Thousands (including No. of staff weeks travel and consultant costs) Lending FY05 235.09 FY06 282.17 FY07 0.13 Total: 517.39 Supervision/ICR FY07 47.18 FY08 21.06 64.72 FY09 24.29 88.61 FY10 28.40 101.64 FY11 24.81 119.21 FY12 33.91 172.99 FY13 38.99 173.28 FY14 40.52 262.18 Total: 1,029.81 38 Annex 5. Beneficiary Survey Results (if any) Not applicable. 39 Annex 6. Stakeholder Workshop Report and Results 139. An ICR Stakeholder Workshop was held in Beirut, Lebanon on September 22-23, 2014. The workshop was attended by key members of the PMT for Part A and Part B, respectively, as well as the Bank project team and the ICR team (see Table 18). The objective of the ICR workshop was to discuss the project’s experience with relevant stakeholders in order to derive lessons learned for future operations in Iraq. 140. The discussion centered around six key topics: (1) Project design, (2) World Bank Supervisory and support role, (3) Borrower performance in project execution, (4) procurement and contractor / consultant issues, (5) compliance with World Bank policies, and (6) sustainability and post-operation phase. Each topic was discussed in sequence based on a number of discussion questions. Below is the list of participants followed by a summary of the key lessons learned derived from the workshop. Table 18: Participants at the ERRP ICR Stakeholder Workshop Name Affiliation Function Mohammed Salahuldeen SCRB PMT Leader Mohammed Hussein SCRB PMT Manager Assistant Mohammed Alsaad Ashti Tareq Berkah Al-Windi SCRB Procurement Engineer Baraa Mohammed Wannas SCRB Procurement Engineer Esraa Ayad Hadi Al-Hadhari SCRB Procurement Engineer Adwaa Qassem Mohammed SCRB Financial Management Al-Rubaye Ban Ali Mustafa SCRB Accountant Youbert Youkhna Sorany GDRB Financial Management Zuhair Yousif Atto GDRB Procurement Ibrahim Dajani World Bank Task Team Leader Sepehr Fotovat Ahmadi World Bank Procurement Specialist Omar Wahab World Bank ICR Task Team Leader Sanne Tikjoeb World Bank ICR Lead Author 40 Table 19: ERRP ICR Stakeholder Workshop - Discussion Comments and Derived Lessons PROJECT DESIGN DISCUSSION COMMENTS DERIVED LESSONS Components: The planned components and activities were adequate to This is a positive lesson about structuring a Were there other meeting the development priorities identified at the time of project to meet identified development components/activities that approval. These priorities are still relevant today, as evident in priorities allowing for ownership and should have been included the great degree of continuity in the TCP follow-on operation, commitment to take root in the implementing under the project? which will rehabilitate additional expressways and continue the agency, Ministry and country at large. development and updating of RAM in SCRB and GDRB. Indicators: The indicators were adequate in measuring the project PDO and indicators should be carefully Were the project’s outcome outcomes. However, the wording in some cases was too vague, considered and worded to allow for more indicators adequate in such as “travel time reduced for villagers to reach markets and precise monitoring and assessment of capturing the benefits of the services”. Such wording should be replaced by more specific achievements. project? If not, then which targets, e.g. “travel time reduced on rehabilitated road indicators? segments”. Outcomes: The objectives and timeframe for project implementation was Achievements are not derived in a vacuum, but Were the targets and/or the generally adequate. The security environment, however, rather the project outcomes complement the timeframe for implementation caused significant delays and resulted in the need for two regular Government program and should be too ambitious? Was the extensions. considered in that context when evaluating the allocation of funds sufficient success of the project. for financing planned Furthermore, price contingencies were inadequate to cover the activities? rise of construction material in an increasingly difficult security situation. The project was successful in leveraging significant commitments from SCRB’s and GDRB’s own budget and funding resources towards realizing planned outputs. Since 2006, for example, SCRB has financed over 20 bridge replacements, and every year GDRB funds the rehabilitation of 75 km of rural roads. Institutional arrangement: The proposed institutional set-up was adequate, and the PMT Where possible, in a fragile environment with Was the proposed institutional model worked well. However, one design short-coming was on-going conflicts, it is better to rely on local set-up sound? Did the the heavy reliance on international consultant services for PMT and regional consultants and contractors institutional arrangements support, construction supervision and technical assistance. Due willing to be on-site, at least intermittently. 41 contribute to smooth to the prevailing security environment it was difficult to attract implementation? What other international expertise, which delayed implementation measures should have been significantly. considered? The FMA-model also worked well as Bank staff was prevented from visiting all project sites. Risk Management: The Bank has been absent from Iraq for decades, and has lost Generous price contingencies are central to Were original measures as much its knowledge about operating in the Iraqi country controlling cost overruns. This lesson is approved effective in context. In 2003, when the project was being designed, it is not incorporated into the TCP follow-on project, mitigating identified risks? clear that neither the Bank nor the Client could have where 10 percent price contingencies are Were there any unforeseen anticipated the development of the overall country context. included under each component, and another risks that could have been 10 percent is included as a separate line item. mitigated at the preparation One measure that could have been included at the time of stage? appraisal to mitigate some of the risks associated with the challenging security environment would be to build in larger price contingencies. WORLD BANK SUPERVISORY AND DISCUSSION COMMENTS DERIVED LESSONS SUPPORT ROLE WB - PMT Collaboration: Both PMTs expressed satisfaction with WB-PMT Positive reinforcement of a known lesson How would you describe the collaboration. Neither had encountered any problems, while learned: that continuity of Bank staff on the collaboration between the WB noting that there had been great continuity of staff in the Bank project team is an appreciated factor, which team and the PMT? team. helps ensure smooth collaboration and lays the foundation for future work. Responsiveness: Both PMTs stated that the World Bank has been responsive to Was the World Bank all concerns raised within its capacity. One issue was raised on responsive to the issues and the need for Bank assistance with the certification of an concerns raised throughout amount owed by the GDRB to a contractor, which is awaiting implementation? Where can approval by the Council of Ministers. However, as this is not we improve? within the jurisdiction of the World Bank, there is a limit to how much the Bank can push for the release of this payment. Technical assistance: The technical assistance provided on FM, procurement and The Bank’s training modules should be made Was the provided technical safeguards was adequate. However, the point was made that available to all interested parties, who can 42 assistance on financial training should be available not only to the PMT, but to SCRB directly benefit from developing skills on management, procurement and more widely. As some PMT staff members have been financial management, procurement and safeguards adequate to the reassigned to other tasks, essential skills at the PMT needed to safeguards and apply the lessons learned at a needs of each PMT? Did the be rebuilt. By widening the audience, the skill sets are better practical level. FMA provide effective retained. A specific request was made for delivering safeguards technical support and accurate training to on-site engineers, who observe the conditions on a Include FMAs in safeguards training modules, reporting of progress? regular basis. to ensure that FMAs have the required technical skills to assess on-site conditions and The FMA did a good job inspecting financial management progress, in addition to providing essential FM procedures, such as applications for withdrawals. On the other services to both the Bank and the Client. hand, the FMA was not strong on monitoring the more technical aspects of implementation, and for example missed the fact that rented equipment was present on a work site where it did not belong, indicating that the work had been sub- contracted to a third party without prior approval and without the necessary capacity to carry out the task (Um Qasr). Technical assistance: Overall, the Bank’s level of effort and quality of support was When operating in a fragile country context Were you satisfied with the held in high regard by both SCRB and GDRB. It was with on-going conflicts, two supervision level of effort and quality of applauded that the Bank always seeks to finds the best fit missions a year is not enough. Close follow-up World Bank support on between the need assessed and the tool offered. Such as in the is required throughout the implementation technical issues, such as case of deploying a road asset management tool, where the period to ensure compliance and to track specialist TORs and feed-back Bank advised the Client to adopt a simpler approach to mirror progress. Qualified FMAs should be relied on deliverables? actual needs and to keep operating costs low. upon when Bank staff is prevented from visiting the field. One criticism related to social aspects of safeguards work, where the SCRB and GDRB felt that the Bank could have been The Bank’s global practice experience is more proactive in addressing key issues. highly useful when a set of TORs are shared across regions and continuously improved The Bank undertook 19 missions in 7 years, or 2.7 missions a upon, such as in the case of the TORs for year. That is above the average 1-2 per year. And yet, even RAM systems. Bank staff has not managed to visit all the project sites over the past 8 years. This is when the Bank relies on the FMA to conduct spot inspections and quality control. There was a general sense that the FMAs were qualified to do their job 43 well. Going forward: In preparation for the implementation of the TCP, the SCRB Additional training on more advanced aspects How can the World Bank expressed a need for additional training on FM, procurement, of project management and monitoring should better assist the PMT in the and safeguards as monitoring construction supervision under be included in follow-on operations. implementation phase? TCP will be much more detailed than under ERRP. BORROWER DISCUSSION COMMENTS DERIVED LESSONS PERFORMANCE Ratification delay: From the discussions it was difficult to pinpoint what caused The discussion concluded that the issue of What caused the delay in ratification delay. However, ratification happened through the ratification is outside the control of the Bank ratification? How can personal connection that the ex-minister of MoCH had with and the PMT. However close follow-up should ratification delay be avoided in Prime Minister Maliki. be made by both parties to push for early the future? ratification in the future. GOV - PMT collaboration: The collaboration between the GoI and the PMTs has evolved How was the collaboration over time. While problematic initially due to the delay in with the central administration effectiveness and the lack of approval for operational funding in Baghdad? What were the (SCRB), the relationship evolved and towards the end the GoI challenges for each PMT? showed great ownership of the project, in particular the TSMP component. The Minister of Transport and his Deputy came to Beirut to discuss the TSMP with consultants. This demonstrated a high degree of country ownership. PMT - PMT collaboration: The PMTs met during supervision missions and took part in How was the collaboration discussions of both projects. Beyond that, no other PMT-to- between the PMTs in Baghdad PMT collaboration took place outside of Bank supervision. and Erbil? What can each PMT learn from the other PMT? Capacity development: Extensive capacity building has taken place in both PMTs. Continued needs assessments are essential, How has the capacity of each However, as pointed out earlier, more training will be needed also in cases where the PMT is grandfathered PMT evolved over time? In for the management and monitoring of the TCP follow-on into a new project with the same team what areas do you observe the operation, which has more sophisticated measures of members. most progress, and which areas implementation taking into account the lessons learned from are still weak? the ERRP. Biggest challenge: For SCRB, one of the most critical challenges was the delay in What was the most difficult contracting an independent auditor. SCRB explained that the 44 challenge during project reason for this delay was that within the Ministry there was a implementation (for each sense that no outside auditor was needed as internal controls PMT)? How was it resolved? were a sufficient measure of quality control. For GDRB, social safeguards issues, although handled properly, constituted the biggest challenges. CONTRACTOR AND DISCUSSION COMMENTS DERIVED LESSONS CONSULTANT ISSUES Cost: This point is difficult to discuss before the ERR calculations Given the high and variable are complete. However, it appears that there is a high return on cost for material, works and the investment and that the per-unit cost of rehabilitated km services in Iraq, were the seems to be on par with international standards. From that realized project activities perspective, the ERRP was worth the price. worth the price? Competition: The technical assistance components were severely affected by The security risk for consultants can be What factors would attract the lack of interest from international consultant firms, which reduced by allowing them to work from home international bidders? were reluctant to come to Baghdad to work. to the extent possible. The discussion focused on a number of project measures that Where appropriate, components can be potentially could be applied in an effort to make it more combined to raise the contract award and make attractive for international firm to participate in the bidding it more interesting for international firms to process (see lessons learned). compete. Implementing agencies should not rely on advertisement only to attract bids, but should also identify potential consultants/contractors beforehand and invite them to submit a bid. While this approach was tried and failed at SCRB, it would still be worth considering in a different context. Performance: Contractor performance was particularly poor under a couple If employing an international consultant, bring What measures would improve of contracts, both of which were eventually terminated (Um on board local or regional counterparts willing contractor performance? Qasr and Al Daraji). to go on-site and then apply creative measures 45 to relay observations (recorded or streaming) Another currently underperforming contract is the Al Daraji back to the international consultant. bridge (second contract). At first, the contractor was trying to hedge risk by sourcing steel from abroad, in this case Ukraine. Rely on regional construction supervision However, the conflict earlier this year abrupted supply. companies with Arab speaking staff members, Instead, the contractor turned to a steel producer in Mosul, who are in a better position to liaise with local which over the summer was impacted by the on-going crises. counterparts. All work has come to a stand-still and the contractor is awaiting the approval of next year’s SCRB budget before continuing operations (expected in October, 2014). Poor contractor performance is best mitigated through rigorous construction supervision. However, such rigorous supervision is most often supplied by international-level consultant firms. In a case from KSA, a construction project in Mecca prevented international consultants from entering the project site. This necessitated video recordings to be used as an aid in passing on-the-ground information to the firm. Sub-contracting of various works without prior approval is a key risk factor for poor performance. Effectively preventing unauthorized sub-contracting is one of the most effective tools to enhance contractor performance. Security: In general, growing security concerns are the main explanatory Higher price contingencies built into every What role did security issues factor for poor contractor performance, according to SCRB. In contract can help mitigate poor performance play in the poor performance ERRP, all security arrangements have been left to the when contractors are faced with escalating by some contractors? consultants / contractors to arrange for themselves. The costs due to the security situation. government has never been involved in proving secure passage for undertaking project activities. COMPLIANCE DISCUSSION COMMENTS DERIVED LESSONS Bank support: The SCRB expressed a general lack of local capacity in Iraq to More training needed from the Bank’s side, In what ways could the Bank undertake environment and social assessments. It was felt that not only for PMT members, but also for the 46 have better facilitated the Bank could have provided even more support, for example specialists hired to work on the project. This compliance with its policies? in terms of training, not only for PMT members, but also for includes local engineers on the ground, who the specialists hired to undertake safeguards work, such as observe safeguards issues on a daily basis. engineers observing safeguards issues on-the-ground on a regular basis. Safeguards issues are best mitigated at the design stage – both of the project and of individual works – when impacts on environment issues, social issues, and the investment at large can be considered together. This approach helps to ensure a smooth implementation process with fewer safeguards obstacles. SUSTAINABILITY AND DISCUSSION COMMENTS DERIVED LESSONS POST-OPERATION Maintenance: Both agencies have experienced a gradual increase in the Are the resources allocated to budget, and feel that the budget is sufficient to conduct road and bridge maintenance maintenance work on the roads network. sufficient to sustain the improvements achieved? The weakest link is perhaps in the lack of enforcement at Where are the weakest links? several newly installed weighing stations to comply with max limit weights for certain roads (see section on risks below). Sustainability: At the political level, the project has succeeded in building Including components that directly address How can project benefits be attention to critical transport issues. According to one sustainability through specific measures and sustained? stakeholder participant: “GoI is keen on adopting policies that strategies, such as the RAM and the TSMP, are similar to those applied in the ERRP.” The development of are essential for the long-term success of the a the Transport Sector Master Plan has benefitted not only the project. road sector, which is experiencing a surge in maintenance budget, but also other sectors, such as aviation and railway. Spill-over effects, such as positive unintended The Bank is now supporting the GoI to develop these priority outcomes, can play a key role in creating an areas of the transport sector. enabling environment where project outcomes are better sustained. At the project level, the use of installed RAM systems as a planning tool in SCRB and GDRB bodes well for the 47 sustainability of institutional capacity built at each of the implementing agencies. At SCRB, the RAM system was fully installed shortly before project closing. The RAM has provided a five-year investment plan and a road map for identifying priority maintenance work to be included in the following budget cycle. 5 staff members from SCRB head office and 4 staff members from the SCRB field offices have been trained in using the HDM4 software, which supports the RAM. However, the database needs regular updating in order to be a reliable decision-making tool. SCRB expressed that some areas of the country are too unsafe for staff members to collect the needed data, but this will be done as the areas become more accessible again. At GDRB, RAM has been installed since 2012 and covers primary, secondary, and rural roads. This was a surprise finding, as the Bank was under the impression that only rural roads were covered under the Road Master Plan and that RAM development for non-rural roads would form part of the TCP. It appears that there is a need for updating of the database, particularly for non-rural roads. Since 2012, the RAM system has been regularly used by the GDRB to plan future maintenance work for the following budget cycle. At the sector level, a number of unintended outcomes speaks to the sustainability of the broader road sector: (1) As part of the Um Qasr – Al Zubair, there was a need for higher quality asphalt that would hold up to heavy traffic even in 50 degrees centigrade heat. Without viable options to reform the oil refineries to produces better bitumen or to import bitumen from the Gulf countries, there was an opportunity for a local 48 entrepreneur to fill the gap of short supply of high- quality polymer to be mixed in the bitumen for better road performance. The company now successfully sells and distributes high-quality polymer to other roads projects in Iraq. (2) In Basra Governorate, it has become mandatory to use high-performing asphalt on all road construction and maintenance work as a result of the piloting of such asphalt under ERRP. (3) EMP/ESIA now required for all new roads funded by GDRB. Similarly, SCRB adopted specifications and procedures that are impacted strongly by the experience of this project. Risk: The key risk relates to mode of using the rehabilitated road RAM should be complemented by effective How would you assess the risk segments. The lack of enforcement to control the access of axel load control to minimize the risks to to development outputs and heavy axel vehicles on appropriate roads is a key risk factor for rehabilitated roads. outcomes given the current the sustainability of rehabilitated roads. A decision is pending situation in Iraq? Consider on how to operate the weighing stations and under which both material and policy agency it should be operated. Security concerns, such as implications. bombing of weighing stations, has affected the enforcement and the question remains, who is better suited to operate these stations. Axel load control is key to sustaining any future investment in the road sector. 49 Annex 7. Summary of Borrower's ICR and/or Comments on Draft ICR a. Summary of Borrower’s ICR (Part B only) 141. The GDRB of the KRG MoCH submitted an Implementation Completion and Results Report for Part B of the project to the Bank project team in January, 2012. The outline of the report is based on the same format used in ICRs prepared by the Bank. A brief summary of key aspects of the report is included below. The full report (59 pages) is attached separately. Section 1: Context at appraisal 142. This section summarizes the project and background information at the preparation stage (similar in scope to section 1 in the present ICR). Section 2: Implementation 143. Overall, the report shows that project implementation went smoothly and that project objectives were achieved without exceeding costs and within the specified period. 144. The report tracks the achievement of project development objectives and states: Three village roads of about 63.6 km in total were rehabilitated in the three governorates of Erbil, Dohuk, and Sulaymaniya. 145. The report makes note of implementation related processes:  Procurement: Many early activities were implemented as planned. However, during the second half of the project, bidding for goods and calls for proposals had to be repeated, and it was noted that payments were delayed as a results of belated opening of letters of credit.  Safeguards: The report states that no significant issues have been identified and that the EMP was implemented. Land acquisition was required in two instances: for the realignment of 4 km of the Erbil-Altun Kopri highway and for the realignment of a short segment of village access roads in Dohuk governorate. All land was voluntarily donated.  Financial management: The report states that all financial aspects were carried out according to World Bank guidelines.  Monitoring and evaluation: The report mentions that Bank supervision focused on assessing project indicators and assisting the GoI in overcoming implementation difficulties. Section 3: Risk to development outcome 146. According to the report, the risk to development outcomes is considered moderate as the security situation in KRG has continuously improved. 147. Elsewhere in the text, the report makes important mention of the issue of overloading by trucks, which can cause premature pavement damage. As a result of sufficient budget allocations, 16 weighing stations have been established in Erbil governorate and 20 weighing stations have been established in Dohuk and Sulaymaniya governorates. 50 148. Furthermore, the report states that rehabilitation of the old carriageway of the Erbil-Altun Kopri highway was implemented within GDRB 2011 budget and included repairing all damaged segments and covering the road with a layer of asphalt binder and improving road marking with installation of road signs. Section 4: Assessment of Bank and Borrower Performance 149. According to the report: “The World Bank staff had supportive and courageous role during the preparation of the project (advertising, procurement, prequalification of companies, evaluation, contracting…etc.) and during the implementation of the project technically, financially and documentary, consequently Project was well prepared as an emergency operation. The planned outcome and key indicators in the results framework are practical and relevant to the Project activities, and closely aligned with the Transitional Support Strategy. Right from the start, the Project was ready for implementation. The project risks were clearly recognized and adequate mitigation measures were proposed.” 150. “The Bank task team was multidisciplinary with a good mix of skil ls. The team was responsible for identifying project issues during supervision, flagging issues in aide memoires and ISRs, and proposing, when possible, solutions to resolve them. The soundness of the advice given to the government and the speed of Bank follow-up were highly commendable. Key performance indicators used in the ISR adhered to those set up in the results framework of the Project design and were updated at each supervision mission, tracing the Project’s consistent progress and showing how the PDO was achieved.” 151. The report notes that the performance of the Borrower was satisfactory. Section 5: Lessons learned and benefits derived from the project 152. In this section, it is stated that the objectives pursued through this project have been achieved in terms of reducing transport costs, effectively improving the level of road service, contributing to opening up of the country and to regional integration. Furthermore, the project has produced definite social and economic effects as it has made basic social services and centers of economic activity more easily accessible at low cost to the population. 153. The report notes the importance of clarifying the price index adjustment of construction materials in the request for proposals for construction work. It is understood that use of a foreign price index is necessary when there is no national price index. During this project, GDRB has assigned a procurement engineer to investigate material prices in the region on a monthly basis in order to establish a price index adjustment formula. Ministry and government agencies will benefit from establishing a national industrial price index to be used in future projects. 154. Further lessons include: - The importance of the choice and quality of the materials used as well as strict geotechnical control during the execution of works. - Risk of non-application of contract terms strictly and entirely, as concerns landscaping and tree planting and the systematic restoration of access roads to adjacent villages upon completion of works. - The need for appropriate project environmental protection measures, to ensure rainwater drainage and durability of roadside slopes, especially in certain urban areas. - The urgent need to ensure checks for leakages of oil products (diesel, lubricants) which have damaging effects on road surfaces. 51 - The need for the borrower to mobilize, on a regular basis, sufficient financial resources to ensure road maintenance, so as to protect its roads. - Cost estimates of major civil works components should be based on solid and up-to-date feasibility studies and detailed designs during project preparation and appraisal. - Coordination between government agencies has to be maintained throughout the period of the credit to expedite the approval process and its implementation. - Commitment of local funds for acquisition of land and for payment of people affected by the project should be programmed as early as possible. - A method of funding maintenance on a continuous basis is required before much progress can be made toward developing sustainable methods of implementing routine and periodic maintenance procedure. Annex1: Project costs and financing 155. The report notes that due to material price adjustments for bitumen, cement, and steel incurred for the rehabilitation of Erbil-Altun Kopri highway, the KRG allocated from its annual budget a total of USD 1,469,115 to cover the extra amount needed. The KRG also allocated USD 190,000 for reallocation of electrical poles as part of the road widening and USD 208,000 allocated for local staff supervision. Annex 3: Economic analysis 156. The post-construction economic evaluation has been prepared using the World Bank’s Vehicle Operating Cost 4 model in combination with a simple spreadsheet cash flow model used to estimate economic rates of return (ERR) for the investment option chosen. 157. Regarding the Erbil-Altun Kopri highway segment, the assessment indicates that the road improvements have been successful in reducing the unit costs of operating vehicles (per km VOCs and travel time) and have contributed to an overall reduction in transport fares and rates, and thereby in the prices of goods in markets of the region. The ERR for the overall project is 38.9%. Total net present value (NPV) of benefits estimated at about more $50 million. The project is efficient in regards with the benefits to the agricultural sector. On the basis of solely vehicle operating costs, the investment fulfills all the requirements for the 12% hurdle rate of return. Savings in travel time and reduction in emission due to termination of the long queues on both ways could be other considerable benefits from this rehabilitation project. Average annual daily traffic has doubled, level of service increased from E-F to A, and a clean environment formed along the road; benefits from stand point of economy, social activities, and environment are appreciable. The project has already accelerated farm activities, industrial development, and other civilization works considerably. 158. Regarding the village access roads, the assessment indicates that the road improvements have been successful in reducing the unit costs of operating vehicles (per km VOCs and travel time) and have contributed to an overall reduction in transport fares and rates, and thereby in the prices of goods in markets of the region. The ERR for the overall project is above 35%. Total net present value (NPV) of benefits estimated at about more $5 million. The project is efficient in regards with the benefits to the agricultural sector. On the basis of solely vehicle operating costs fulfill all the requirements for the 12% hurdle rate of return. Savings in travel time and reduction in emission could be considered other considerable benefits from this rehabilitation project. Average annual daily traffic has doubled, level of service is increased, and a clean environment formed along the road; benefits from stand point of economy, social activities, and environment 52 are respectable. The project has already accelerated farm activities, industrial development, and other civilization works considerably. Annex 7: Project completion report 159. A sub-section on achievement of project development objectives lists the following benefits: - With the completion of right side of the carriage way, one direction road became a divided highway: this improved the safety of the road - Also with the completion of intersections and implementation of warning and regulatory signs the road became safer than before - The condition and quality of the roadway, which includes the pavement, shoulders, intersections, surface water drainage, and the traffic control system, are some of the factors in an accident (driver, environment, and the vehicle are other factors). It is to be expected that, this divided highway will reduce the number of accidents – especially head to head collisions – with its adequate design geometry and material quality - The number of resident families increased after the construction of new road - To reach the secondary schools at the near villages became easier - Rehabilitating the Village Access Roads will increase social activities between the nearby villages and towns and to raise the value of what they are growing and breeding - Rehabilitating the Village Access Roads will provide an access to the farm lands. - In winter time, it was very hard to reach some villages because of flood and mud. With the paved road, it will be easier to reach the villages. b. Summary of SCRB’s Comments on Draft ICR 160. The draft ICR was shared with both PMUs. GDRB had no further comments. The SCRB submitted comments on the draft ICR in track changes (saved in internal project files in WBDocs). SCRB’s main points related to:  Third restructuring: According to SCRB, the project was restructured on January 16, 2014 to reallocate funds between disbursement categories for Part A of the project. However, the ICR team could not locate Bank records to indicate this. Possibly, there was a final allocation of remaining contingency funds to cover the last phase of disbursements, which would not entail a formal restructuring. Additionally, if the reallocation did not affect the project’s objectives, components or indicators, it is possible that the reallocation was approved without a formal restructuring.  Km of rural roads rehabilitated under Part A: According to SCRB, a total of 40.7 km of rural roads were rehabilitated under Part A of the project, implying that an additional 3 km of rural roads were rehabilitated and thereby meeting the revised target. The discrepancy relates to the al-Raisa road, which is now said to be 28 km in length, and not 25 km as previously communicated by SCRB in documents received for the economic analysis. As the ICR team is not in a position to verify the actual length of the rehabilitated al-Raisa road segment, the 37.7 km initially communicated will be recorded as the final achievement.  Final project cost by component: SCRB provided an updated table with project costs by component. The figures are included in the final ICR, Annex 1. 53 Annex 8. Comments of Cofinanciers and Other Partners/Stakeholders Not applicable. 54 Annex 9. List of Supporting Documents World Bank documents:  Agreed Minutes of Negotiations – February 16, 2006  Technical Annex – June 6, 2006 (Report No: T7665-IQ)  Financing Agreement – April 2, 2007  Restructuring Paper – January 25, 2010 (Report No: 52645-IQ)  Restructuring Paper – June 29, 2012 (Report No: 70489-IQ)  Implementation Status Reports, Sequence No 1 – 19  Aide Memoires and Management Letters, November 2006 – February 2014 Progress reports:  Procurement Quarterly Progress Reports, Q1 2013 – Q1 2014 (Part A only).  Financial Quarterly Report, Q2 2014 – August 14, 2014 (Part A and Part B).  Progress Report, February 23-26, 2014 (Part A) TA Deliverables:  SCRB Road Asset Management System and Rehabilitation Program + Appendices, June 2014  Transport Master Plan Study – Stage 2 – Short Term, January 2014 Other:  Implementation Completion and Results Report, Part B – January 2012  Economic Evaluation Data (Part A and Part B)  Monitoring Road Works Contracts and Unit Costs for Enhanced Governance in Europe and Central Asia, World Bank, Transport Papers (TP-33) – January 2011  Monitoring Road Works Contracts and Unit Costs for Enhanced Governance in Sub- Saharan Africa, World Bank, Transport Papers (TP-21) – September 2008  ERRP Environmental and Social Safeguards Audit Report – December 2013. Prepared by an external contractor for the World Bank. 55 56