ICRR 10883 Report Number : ICRR10883 ICR Review Operations Evaluation Department 1. Project Data: Date Posted : 06/19/2001 PROJ ID : P008599 Appraisal Actual Project Name : Roads Project Costs 296.8 301.3 US$M ) (US$M) Country : Poland Loan/ US$M ) 150 Loan /Credit (US$M) 150 Sector (s): Board: TR - Roads and Cofinancing highways (96%), Central US$M ) (US$M) government administration (4%) L/C Number : L3564 Board Approval 93 FY) (FY) Partners involved : Closing Date 06/30/1999 06/30/2000 Prepared by : Reviewed by : Group Manager : Group : Robert C. Varley Ronald S. Parker Alain A. Barbu OEDST 2. Project Objectives and Components a. Objectives The main objective of the project was to continue modernizing and transforming the Borrower's transport sector with particular emphasis on the national road network and its administration . In particular the project would: 1. Help improve the road network (and bridges). 2. Develop management tools, for the General Directorate of Public Roads (GPDD). 3. Improve road safety. 4. Introduce competitive bidding for road works . 5. Initiate the development of modern combined transport systems . Although not stated explicitly as an objective, the project would contribute to the Government's WB -supported privatization strategy, for the local Roads and Bridges construction sector . The loan proceeds and Government contribution were to be an important source of revenue for local contractors and consultants . b. Components The components of the total project cost of $ 301.3 million correspond to the objectives : (i) Road and Bridge Works (97%); (ii) Project Management (.2%); (iii) Road safety Program (1.6%); (iv) Institutional Development (.5%); and (v) Combined Transport System (.7%). c. Comments on Project Cost, Financing and Dates The combined transport component ($2 million to finance TA and equipment) was not needed and in response to a Government request was transferred to purchase of 30 inter-modal pocket-wagons for Polish Railways. 3. Achievement of Relevant Objectives: 1. All the physical investments were successfully completed with most achieving ERRs well in excess of the target rate of return (12%). Works are considered to be of good quality . In total 48 civil contracts were completed - 13 new bypasses were built, 11 bridges and 25 sections of road were built or modernized . In addition 400 kms of road/bridges were strengthened and upgraded, exceeding SAR targets by 11%. All works followed strict environmental regulations on air pollution, noise, water and soil pollution . 2. A major transformation in the management of GDDP and the construction industry was achieved . Contracting of works through competitive bidding, independent supervision of works, arbitration, modern procurement procedures and the use of economic evaluation techniques are now routine . A Pavement Management System (PMS), introduced during the First Transport Project (L3193), was completed and has been fully operational for all maintenance budget work since 1998. The GDDP, Project Management Unit (PMU), DODP (Regional Administration of the GDDP), consulting firms, local contracting agencies and adjudicators have benefited from project support and staff training in financial management, bid preparation, bid evaluation, supervision, litigation, arbitration and financial management . 3. Despite a 50% increase in traffic (vehicles/km) between 1993 and 1998, there was no increase in the rate of traffic accidents. A National Road Safety Council and Coordinating Road Safety Unit were established . Safety campaigns were conducted, accident black spots eliminated . Better equipment, procured under the project, enabled traffic police to improve enforcement of traffic regulations . Coordination amongst road safety agencies took time and is incomplete since the subject is complex . 4. Competitive bidding was introduced and successfully applied for the first time in Poland . Standardized bidding documents, specifications and bills of quantities prepared under the project were used on other internationally funded projects and introduced in a similar format on nationally procured projects . 5. A market driven response by the private sector to inter -modal transport obviated the need for this component . The freed funds were however used to procure 38 inter-modal pocket wagons for the Polish Railways (project savings and competitive offers allowed the target of 30 to be exceeded.) 4. Significant Outcomes/Impacts: 1. The organization of the road traffic sector has changed dramatically and both private and public sector productivity increased. There has been a rapid and widespread extension of the private sector into the road construction and consulting sectors, mobilizing both local resources and those of private international partners . 2. The capacity building component of the project facilitated the transfer of skilled labour between a contracting public and an expanding private sector . 3. Important sectors of the national highway were improved and made safer, which will cut accidents and congestion while reducing the burden of inconvenience imposed on the motoring public by previous deterioration of the road network . 4. Greater competition led to a fall in tender prices and increased efficiency in the construction industry . 5. The establishment of coordinating and representational bodies for traffic safety at national level was a critical first step; traffic safety has now emerged as a major concern among Government entities in the road sector . 5. Significant Shortcomings (including non-compliance with safeguard policies): 1. GDDP is not allocating enough budget to maintenance, deferring works needed to reduce the backlog . 2. The combined transport component should have been dropped sooner, releasing resources for more straightforward components that were in demand . 6. Ratings : ICR OED Review Reason for Disagreement /Comments Outcome : Highly Satisfactory Highly Satisfactory Institutional Dev .: High High Sustainability : Highly Likely Likely Inadequate maintenance budgets reduce sustainability. Bank Performance : Satisfactory Satisfactory Borrower Perf .: Satisfactory Highly Satisfactory The Borrower met the requirements for the rating. Quality of ICR : Exemplary NOTE ICR rating values flagged with ' * ' don't comply with OP/BP 13.55, but are listed for completeness. NOTE: 7. Lessons of Broad Applicability: 1. When human resources are already well developed and reform is actively sought, additional finance and exposure to new technical and managerial methods are likely to be sufficient to achieve high returns in the road sector. 2. Designing and implementing a Road Safety Policy is a difficult long -term process, requiring not only increased awareness of traffic safety issues but good coordination, strong ownership and adequate funding . 3. European integration, and particularly EU accession, play an accelerating role in institutional reforms . 8. Assessment Recommended? Yes No 9. Comments on Quality of ICR: Clear, concise, well written and comprehensive . Excellent supporting data.