Document of The World Bank FOR OFFICIAL USE ONLY Report No: ICR00004791 IMPLEMENTATION COMPLETION AND RESULTS REPORT CREDIT 43080 IN THE AMOUNT OF SDR 66.1 MILLION (US$ 100 MILLION EQUIVALENT) CREDIT 48920 IN THE AMOUNT OF SDR 26.3 MILLION (US$ 41 MILLION EQUIVALENT) CREDIT - H9040 IN THE AMOUNT OF SDR23.7 MILLION (US$36.25 MILLION EQUIVALENT) CREDIT - 53460 IN THE AMOUNT OF SDR2.1 MILLION (US$3.15 MILLION EQUIVALENT) FROM THE CRISIS RESPONSE WINDOW GRANT-TF-15898 AND GRANT TF-15923 IN THE AMOUNT OF US$15.75 MILLION (US$9.25 MILLION AND US$6.50 MILLION, RESPECTIVELY) FROM THE STRATEGIC CLIMATE FUND GRANT-TF-17375 IN THE AMOUNT OF US$12.32 MILLION FROM THE GLOBAL FACILITY FOR DISASTER REDUCTION AND RECOVERY AND CREDIT - 56020 IN THE AMOUNT OF SDR 52.3 MILLION (US$73.6 MILLION EQUIVALENT) TO THE Republic of Mozambique FOR THE Mozambique -Roads and Bridges Management and Maintenance Program - Phase II November 28, 2019 Transport Global Practice Africa Region CURRENCY EQUIVALENTS (Exchange Rate Effective April 30, 2019) Mozambican Currency Unit = Metical US$1= 64.0786MT US$1 = 1.38576SDR FISCAL YEAR July 1 - June 30 Regional Vice President: Hafez M. H. Ghanem Country Director: Mark R. Lundell Senior Global Practice Director: Guangze Chen Practice Manager: Maria Marcela Silva Task Team Leader(s): Kulwinder Singh Rao ICR Main Contributor: John Kobina Richardson ABBREVIATIONS AND ACRONYMS AF1 First Additional Financing AF2 Second Additional Financing AF3 Third Additional Financing ANE Administração Nacional de Estradas (National Road Administration) APL Adaptable Program Lending CIF Climate Investment Funds CRW Crisis Response Window DA Designated Accounts DBT Design Build and Transfer DFID Department for International Development UK EIRR Economic Internal Rate of Return ESC Environment and Social Clauses ESMP Environmental and Social Management Plan ESIA Environmental and Social Impact Assessment FM Financial Management FRT Flood Response Team GFDRR Global Facility for Disaster Reduction and Recovery GoM Government of Mozambique HDM4 Highway Development and Management, Version 4 IDA International Development Association IFR Interim Financial Reports IRM Immediate Response Mechanism ISR Implementation Status and Results Report KPI Key Project Indicator Km Kilometer M Meter MZN New Mozambique Metical N1 National Road Number 1 NCB National Competitive Bidding OP/BP Operational Policy/Bank Procedure OPRC Output and Performance Based Road Contract PAD Project Appraisal Document PARP Plano de Acção para a Redução da Pobreza (Action Plan for the Reduction of Poverty) PDO Project Development Objectives PPCR Pilot Program on Climate Resilience PRISE Programa Integrado do Sector de Estradas (Integrated Road Sector Program) QCBS Quality and Cost Based Selection RAP Resettlement Action Plan RPF Resettlement Policy Framework RBMMPII Roads and Bridges Management and Maintenance Program, Phase II RE Resident Engineer RF Fundo de Estradas (Road Fund) SCF Strategic Climate Fund ToR Terms of Reference TSG Technical Support Group UGEA Unidade Gestora Executora das Aquisições (Central unit in charge of procurement functions) TABLE OF CONTENTS DATA SHEET .......................................................................................................................... 1 I. PROJECT CONTEXT AND DEVELOPMENT OBJECTIVES ................................... 9 A. CONTEXT AT APPRAISAL ...............................................................................................9 B. SIGNIFICANT CHANGES DURING IMPLEMENTATION (IF APPLICABLE) ............. 14 II. OUTCOME ................................................................................................................. 17 A. RELEVANCE OF PDOs .................................................................................................... 17 B. ACHIEVEMENT OF PDOs (EFFICACY) ......................................................................... 18 C. EFFICIENCY ..................................................................................................................... 22 D. JUSTIFICATION OF OVERALL OUTCOME RATING .................................................. 22 E. OTHER OUTCOMES AND IMPACTS (IF ANY).............................................................. 23 III. KEY FACTORS THAT AFFECTED IMPLEMENTATION AND OUTCOME ........ 24 A. KEY FACTORS DURING PREPARATION...................................................................... 24 B. KEY FACTORS DURING IMPLEMENTATION.............................................................. 25 IV. BANK PERFORMANCE, COMPLIANCE ISSUES, AND RISK TO DEVELOPMENT OUTCOME ........................................................................................................................ 28 A. QUALITY OF MONITORING AND EVALUATION (M&E) ........................................... 28 B. ENVIRONMENTAL, SOCIAL, AND FIDUCIARY COMPLIANCE ................................ 29 C. BANK PERFORMANCE ................................................................................................... 31 D. RISK TO DEVELOPMENT OUTCOME .......................................................................... 33 V. LESSONS AND RECOMMENDATIONS .................................................................. 33 ANNEX 1. RESULTS FRAMEWORK AND KEY OUTPUTS ........................................................... 35 ANNEX 2. BANK LENDING AND IMPLEMENTATION SUPPORT/SUPERVISION ......................... 44 ANNEX 3. PROJECT COST BY COMPONENT ........................................................................... 46 ANNEX 4. EFFICIENCY ANALYSIS ........................................................................................... 47 ANNEX 5. REVIEW OF THE PERFORMANCE OF THE MOZAMBIQUE ROADS AND BRIDGES MANAGEMENT AND MAINTENANCE PROGRAM .................................................................. 51 ANNEX 6. BORROWER, CO-FINANCIER AND OTHER PARTNER/STAKEHOLDER COMMENTS ... 61 The World Bank Mozambique -Roads and Bridges Management and Maintenance Program - Phase II (P083325) DATA SHEET BASIC INFORMATION Product Information Project ID Project Name Mozambique -Roads and Bridges Management and P083325 Maintenance Program - Phase II Country Financing Instrument Mozambique Investment Project Financing Original EA Category Revised EA Category Partial Assessment (B) Partial Assessment (B) Organizations Borrower Implementing Agency Ministry of Economy and Finance, Republic of ROAD FUND (Fundo de Estradas), National Road Mozambique Administration (ANE) Project Development Objective (PDO) Original PDO The primary objective of the overall Roads and Bridges Management and Maintenance Program (RBMMP), is to stimulate growth andcontribute to poverty reduction through improved road infrastructure, better sector policies, and enhanced roads sector management.More specifically by (i) improving the coverage and conditions of roads and bridges in the territory of the Recipient; (ii)strengtheningtheRecipient's institutional capacity to manage and administer the road sector; (iii) establishing financingmechanisms for road maintenance; (iv) promoting the use of local resources in roads construction and management; and (v) improvingroad transport safety. The project development objective of this phase of the APL is to improve access of the population toall-season roads through maintenance,rehabilitation and upgrading of the classified road network. The indicators to assess theachievement of the PDO are (i) the percentage of classified roads in good and fair condition, and (ii) the percentage of the ruralpopulation within 2 km of an all-season road. Intermediate outcomes have been defined as follows: (a) improved road sectormanagement capacity; (b) enhanced execution of the road maintenance program; and (c) timely and cost-effective implementation ofthe IDA financed rehabilitation and upgradingof sectionsof the National Road N1. Page 1 of 62 The World Bank Mozambique -Roads and Bridges Management and Maintenance Program - Phase II (P083325) Revised PDO The project development objective of this phase of the APL is to improve access of the population to all-season roads throughmaintenance, rehabilitation and upgrading of the classified road network. Page 2 of 62 The World Bank Mozambique -Roads and Bridges Management and Maintenance Program - Phase II (P083325) FINANCING Page 3 of 62 The World Bank Mozambique -Roads and Bridges Management and Maintenance Program - Phase II (P083325) Original Amount (US$) Revised Amount (US$) Actual Disbursed (US$) World Bank Financing 100,000,000 99,569,200 101,642,016 IDA-43080 41,000,000 41,000,000 37,137,776 IDA-48920 3,150,000 3,150,000 0 IDA-53460 36,250,000 36,250,000 30,632,198 IDA-H9040 6,500,000 6,500,000 6,263,303 TF-15923 9,250,000 8,376,923 8,376,923 TF-15898 12,328,457 12,276,517 13,942,044 TF-17375 73,600,000 73,600,000 72,624,053 IDA-56020 Total 282,078,457 280,722,640 270,618,313 Non-World Bank Financing 0 0 0 SWEDEN: Swedish Intl. Dev. 85,900,000 85,900,000 68,000,000 Cooperation Agency (SIDA) OPEC FUND 8,700,000 8,700,000 8,700,000 Local Sources of Borrowing 195,000,000 195,000,000 0 Country NORWAY: Norwegian Agency for Dev. Coop. 7,400,000 0 0 (NORAD) Nordic Development Fund 9,400,000 9,400,000 9,400,000 (NDF) Millennium Challenge 171,100,000 171,100 0 Corporation GERMANY: KREDITANSTALT 13,200,000 0 13,200,000 FUR WIEDERAUFBAU (KFW) JAPAN: Japan International 174,600,000 174,600,000 174,600,000 Cooperation Agency (JICA) ITALY: Dev. Coop. 26,300,000 19,000,000 19,000,000 Department (MOFA) International Fund for 7,400,000 1,500,000 1,500,000 Agriculture Development Islamic Development Bank - 12,000,000 20,000,000 2,000,000 Al Aqsa Fund US, Govt. of 140,000,000 0 0 IRELAND, Govt. of 2,000,000 0 0 Page 4 of 62 The World Bank Mozambique -Roads and Bridges Management and Maintenance Program - Phase II (P083325) FRANCE: Govt. of [MOFA 1,000,000 1,000,000 1,000,000 and AFD (C2D)] KOREA: Export-Import Bank 20,000,000 20,000,000 20,000,000 of Korea (EIBK) EC: EU - European Agency 330,800,000 0 0 for Reconstruction (EAR) UK: British Department for International Development 28,800,000 0 0 (DFID) DENMARK: Danish Intl. Dev. 46,600,000 46,000,000 46,000,000 Assistance (DANIDA) Portugal: Portugal Caixa 832,700,000 0 0 Geral de Depositos African Development Bank 278,100,000 0 0 Borrower/Recipient 139,000,000 139,000,000 139,000,000 Total 2,530,000,000 720,271,100 502,400,000 Total Project Cost 2,812,078,457 1,000,993,739 773,018,311 KEY DATES Approval Effectiveness MTR Review Original Closing Actual Closing 23-May-2007 05-Oct-2007 21-Mar-2009 30-Jun-2011 31-Dec-2018 Page 5 of 62 The World Bank Mozambique -Roads and Bridges Management and Maintenance Program - Phase II (P083325) RESTRUCTURING AND/OR ADDITIONAL FINANCING Date(s) Amount Disbursed (US$M) Key Revisions 07-Apr-2011 68.03 Additional Financing Change in Loan Closing Date(s) Cancellation of Financing Other Change(s) 12-Nov-2012 114.07 Change in Loan Closing Date(s) 03-Dec-2013 132.08 Additional Financing Change in Results Framework Change in Loan Closing Date(s) 10-Mar-2015 150.55 Additional Financing Change in Results Framework Change in Loan Closing Date(s) 30-Dec-2015 154.69 Change in Results Framework Change in Loan Closing Date(s) 07-Jun-2016 157.63 Reallocation between Disbursement Categories 03-Aug-2017 212.53 Change in Results Framework Change in Loan Closing Date(s) Change in Implementation Schedule KEY RATINGS Outcome Bank Performance M&E Quality Moderately Satisfactory Moderately Satisfactory Modest RATINGS OF PROJECT PERFORMANCE IN ISRs Actual No. Date ISR Archived DO Rating IP Rating Disbursements (US$M) 01 28-Jun-2007 Satisfactory Satisfactory 0 02 07-Dec-2007 Satisfactory Satisfactory 0 03 10-May-2008 Satisfactory Satisfactory 6.84 04 18-Dec-2008 Satisfactory Moderately Satisfactory 11.19 05 22-Apr-2009 Satisfactory Satisfactory 26.03 06 25-Dec-2009 Satisfactory Satisfactory 33.02 07 24-Jun-2010 Satisfactory Moderately Satisfactory 45.12 Page 6 of 62 The World Bank Mozambique -Roads and Bridges Management and Maintenance Program - Phase II (P083325) 08 19-Feb-2011 Satisfactory Satisfactory 65.77 09 17-Oct-2011 Satisfactory Satisfactory 85.76 10 02-Jun-2012 Satisfactory Moderately Satisfactory 95.18 11 02-Jan-2013 Satisfactory Moderately Satisfactory 114.37 12 10-Jul-2013 Satisfactory Moderately Satisfactory 128.72 13 19-Jan-2014 Satisfactory Moderately Satisfactory 132.08 14 03-Jun-2014 Satisfactory Moderately Satisfactory 134.56 15 08-Dec-2014 Satisfactory Moderately Satisfactory 135.46 16 28-Jan-2015 Satisfactory Moderately Satisfactory 150.55 17 23-Jul-2015 Satisfactory Moderately Satisfactory 154.07 18 24-Jan-2016 Satisfactory Moderately Satisfactory 155.12 19 19-May-2016 Satisfactory Moderately Satisfactory 157.63 20 09-Nov-2016 Satisfactory Moderately Satisfactory 173.66 21 12-May-2017 Satisfactory Moderately Satisfactory 200.53 22 19-Sep-2017 Moderately Satisfactory Moderately Unsatisfactory 212.93 23 28-Mar-2018 Moderately Satisfactory Moderately Satisfactory 223.86 24 29-Aug-2018 Satisfactory Satisfactory 237.85 SECTORS AND THEMES Sectors Major Sector/Sector (%) Public Administration 19 Central Government (Central Agencies) 19 Transportation 81 Urban Transport 40 Rural and Inter-Urban Roads 41 Themes Major Theme/ Theme (Level 2)/ Theme (Level 3) (%) Page 7 of 62 The World Bank Mozambique -Roads and Bridges Management and Maintenance Program - Phase II (P083325) Private Sector Development 24 Business Enabling Environment 14 Investment and Business Climate 14 Jobs 10 Job Creation 10 Public Sector Management 14 Public Administration 14 Administrative and Civil Service Reform 14 Human Development and Gender 14 Disease Control 14 Non-communicable diseases 14 Urban and Rural Development 49 Urban Development 10 Urban Infrastructure and Service Delivery 10 Rural Development 39 Rural Infrastructure and service delivery 39 ADM STAFF Role At Approval At ICR Regional Vice President: Obiageli Katryn Ezekwesili Hafez M. H. Ghanem Country Director: Michael William Peary Baxter Mark R. Lundell Director: Jose Luis Irigoyen Riccardo Puliti Practice Manager: C. Sanjivi Rajasingham Maria Marcela Silva Task Team Leader(s): Dieter E. Schelling Kulwinder Singh Rao ICR Contributing Author: John Kobina Richardson Page 8 of 62 The World Bank Mozambique -Roads and Bridges Management and Maintenance Program - Phase II (P083325) I. PROJECT CONTEXT AND DEVELOPMENT OBJECTIVES A. CONTEXT AT APPRAISAL Context 1. This ICR evaluates the second phase of the Mozambique Roads and Bridges Management and Maintenance Program. Phase 1 was evaluated under ICR 0000586 of December 20, 2007. 2. The Roads and Bridges Management and Maintenance Program was conceived in 2001 as a comprehensive program to build the Recipient’s road infrastructure and institutions and transition the road sector from post-conflict reconstruction (during the 1990s) to supporting long-term, sustainable development and poverty reduction. IDA support to the Government of Mozambique (GoM) was designed as a 10-year Adaptable Program Loan (APL), to be executed in three phases. The cost was estimated at US$1.7 billion (IDA contribution, US$432 million) and the APLs were planned to be implemented as follows: APL1 – 4 years (2000-2005), APL2 – 3 years (2005-2008) and APL3- 3 years (2008-2011). Phase 1 of the APL (RBMMP-I) focused on scaling-up investment in physical infrastructure and maintenance and undertaking basic sector reforms. It was approved in 2001 and successfully achieved its objectives and closed on June 30, 2007. 3. Major institutional and policy reforms in the road sector that began in the 1990s had progressed significantly during Phase 1 of the APL. Initial institutional reforms included separation of the executive and management functions, which had been closely interrelated in the past, decentralizing sector management, and transitioning from use of force accounts under a planned economy. The National Road Administration, governed by a Road Board, was created in 2003. The establishment of the Road Fund as a separate autonomous agency enabled dedicated funding (of the order of US$50 million per year from road user charges) for road maintenance to be collected by the Government in a sustainable manner. The management of all road maintenance, and tertiary, unclassified and urban roads was decentralized to the Provincial Governments with a coordinating and monitoring role being given to the Directorate of Maintenance at ANE. Provincial Road Commissions were created as the first stage in the establishment of the Provincial Road Administrations. Significant progress had been made in institutional strengthening and building human resource capacities and the RF and ANE were fully established. 4. In September 2006, the government prepared its program for poverty reduction, Programa do Governo para a Reduqzo da Pobreza Absoluta (PARPA II). The primary objective of PARPA II was to sustain broad-based growth and thus make further inroads into poverty reduction. Under the program, five goals were established for the road sector, i.e (i) contribute to expansion of markets, in particular in the agricultural sector, (ii) ensure access to districts with the greatest economic potential, (iii) establish connectivity between the major regions of the country and to develop the main corridors (iv) improve the capacity at the provincial and local level for the management and prioritization of roads civil works; (v) improve the quality of the roads civil works, including construction, rehabilitation, and maintenance. Page 9 of 62 The World Bank Mozambique -Roads and Bridges Management and Maintenance Program - Phase II (P083325) 5. In tandem with PARPA II, the GoM revised the Road Sector Strategy (RSS) in close collaboration with road sector Development Partners (DPs) and developed PRISE, the 2007-2009 Integrated Road Sector Program. PRISE was based on the Revised RSS and the Road Sector Policy but also incorporated a rolling investment program. PRISE supported key aspects of the strategy and policy and supported sustainability of the road network by incorporating periodic maintenance into sector investment plans and by building the capacity of the implementing agencies. At the time, Development Partners were committed to harmonizing their engagement in line with the Paris Protocol. PRISE was therefore designed to be a Sector-wide Approach (SWAP) to harmonize DP support around a government-led strategy and reduce transaction costs by adopting common implementation arrangements. The SWAP therefore involved common financing arrangements through a “pooled fund” (PF), common financial management and procurement procedures, and a sector-wide monitoring and evaluation framework. In practice, this meant that the activities under RBMMPII and PRISE were merged into a single rolling investment program, RBMMPII would adopt the PRISE monitoring and evaluation framework, and PRISE would adopt aspects of IDA’s fiduciary procedures. Much, but not all, Development Partner funding for PRISE would be routed through a pooled funding (PF) mechanism administered by the Road Fund (RF). This arrangement was envisaged as a stepping stone to Sector Budget Support operations by the donors in alignment with the Paris Declaration, and allowed Development Partner funding to directly support the government’s program. The initial IDA financing under RBMMPII provided US$65 million in dedicated funding for rehabilitation of the N1 road and US$35 million in PF funding to support activities under PRISE1. 6. Appraisal of RBMMPII followed development of PRISE. At the time of appraisal of Phase II of the APL, in 2007, the economy of Mozambique was on an upward trajectory with sustained real annual GDP growth of more than 7 percent since 2003. The majority of the workforce continued to be employed in low- productivity agriculture. The national poverty rate had declined from 80 percent to 54 per cent between 1992 and 2007. The existing road network (see Table 1), although improved under phase 1 of the APL, provided inadequate domestic connectivity to promote development of the national economy. Maintaining road connectivity linking the country’s north and south was still a priority from the perspective of economic growth and national unification, but much more investment was urgently needed to improve road conditions and coverage in impoverished rural areas that lacked adequate road access and connectivity. For instance, as of 2007, only 11 percent of rural dwellers were thought to have access to an all-season road. Given the scale of the challenges and relatively recent transition to a market economy, improvements to road subsector governance and asset management – particularly achieving a better balance between rehabilitation and maintenance – would be critical to achieving the sector’s goals. Table 1: Road Network of Mozambique (in kilometers) Type of road Paved Unpaved Total Classified roads 5,814 23,535 29,349 Urban non-classified roads (estimate) 500 2,500 3,000 Rural non-classified roads (estimate) 0 5,000 5,000 Total 6,314 31,035 37,349 1The Pooled Fund included extensive pledges of Development Partner support for the road sector program, PRISE. The pledges are summarized in page four of the datasheet. IDA contribution was subsequently increased to about US$280million during implementation through additional financing Page 10 of 62 The World Bank Mozambique -Roads and Bridges Management and Maintenance Program - Phase II (P083325) Theory of Change (Results Chain) 7. APL 2 focused on enhancing road access and connectivity by (i) rehabilitating sections of the national road, the N1, and other road segments identified under PRISE, and (ii) by building capacity of the road sector institutions. It was envisaged that improved road sector management capacity would build on the momentum of reforms initiated during APL1 and would enhance execution and cost-effective implementation of the road rehabilitation, upgrading, and maintenance program to ensure the establishment of reliable connectivity in a sustainable manner. 8. The underlying assumptions for the realization of this theory of change were that rehabilitation of the N1 road would enhance connectivity and rural road access and connect consuming and producing regions of the country, enabling more rural dwellers to participate in the market economy and, as a result, supporting broader economic growth and poverty reduction. The project design assumed that the planned project activities would build efficient road sector institutions, ensure sustainability of investments and create an incentive to maintain project roads, thereby ensuring the gains in connectivity and road access are preserved over time. The project theory of change was underpinned by a long-term, coordinated engagement in the sector, and it was assumed that such an engagement under a Sector Wide approach would consolidate the reforms, ensure a stable flow of financing, and enhance efficiency in building and preserving the road assets. The outcomes for the project were pitched at a programmatic level, reflecting the enhanced performance of the overall road network and the relevant government institutions and the policy framework. The theory of change for APL2 can be depicted as shown in Figure 1. Page 11 of 62 The World Bank Mozambique -Roads and Bridges Management and Maintenance Program - Phase II (P083325) Figure 1. Theory of Change of Road and Bridges Management and Maintenance Project (APL2) Activities Outputs Outcome Objective • Weighbridges 25 portable, one in Macia Capacity building, • Integrated Financial Technical Assistance Management System and Equipment • Infrastructure and Equipment for ANE and RF • Training of National • Improved capacity and Provincial Staff to manage the of ANE and RF road network • Share of paved and unpaved roads in Improved access of Policy for management Maintenance of unclassified roads good condition the population to an • Percentage of rural all season road population within Rehabilitation of 2km of an all Investments 103.2km of N1(Jardim season road Benfica, 7km and Xai- Xai-Chissibuca 96km) • Immediate emergency works 536km • Medium term Emergency Recovery restoration works Works in cyclone/ 198km flood affected areas • Pilot program for climate resilient infrastructure • Development of Climate Resilient Road Standards Project Development Objectives (PDOs) 9. The primary objective of the overall Roads and Bridges Management and Maintenance Program (RBMMP), is to stimulate growth and contribute to poverty reduction through improved road infrastructure, better sector policies, and enhanced roads sector management. More specifically by (i) improving the coverage and conditions of roads and bridges in the territory of the Recipient; (ii) strengthening the Recipient's institutional capacity to manage and administer the road sector; (iii) establishing financing mechanisms for road maintenance; (iv) promoting the use of local resources in roads construction and management; and (v) improving road transport safety. Page 12 of 62 The World Bank Mozambique -Roads and Bridges Management and Maintenance Program - Phase II (P083325) 10. The project development objective of the APL-I was the same as the program objective. 11. The project development objective of the APL-II was to improve access of the population to all-season roads through maintenance, rehabilitation and upgrading of the classified road network2. Key Expected Outcomes and Outcome Indicators 12. The original PDO indicators were: (i) the percentage of classified roads in good and fair condition, and (ii) the percentage of the rural population within 2 km of an all-season road. Components 13. The APL2 consisted of three components at Appraisal, shown in Table 1. Table 1: Project components Component Activities Planned Costs3 (US$ million) Component (i) Administrative costs: PIU salaries, operating costs, office 69.6 A. Overheads: infrastructure expansion and improvement, and office equipment and (IDA 35.0) vehicles for the National Road Administration (ANE) and the Road Fund; (ii) Capacity building: technical assistance, consultancies, training; (iii) Additional Programs: road safety, axle load control and private sector development. Component (i) Urban road maintenance: small maintenance works on urban roads in 33 246.2 B. municipalities; Maintenance: (ii) Provincial consultants, who assist the provincial offices of ANE to execute their work program, including planning, procurement, and supervision of works; (iii) Emergency works including civil works and the procurement and placing of bailey bridges; (iv) Unpaved road maintenance, including routine maintenance, periodic maintenance, and spot improvements; (v) Paved road maintenance, including routine maintenance, and, periodic maintenance Component (i) Bridge construction and rehabilitation: 709.8 C. (ii) Regional and District road program; (IDA 65.0) Investments: (iii) National road rehabilitation and upgrade program: civil works and consulting services for rehabilitation and upgrading of national roads. 2 The Program Objectives were mistakenly inserted into the original Project Credit Agreement as the Project Development Objectives (PDO). Correction of this error in a subsequent restructuring restored the original PDO, as stated in the PAD in 2007.” 3 The planned costs as reflected in the Project Appraisal document include the contributions from other donors at the time of appraisal Page 13 of 62 The World Bank Mozambique -Roads and Bridges Management and Maintenance Program - Phase II (P083325) B. SIGNIFICANT CHANGES DURING IMPLEMENTATION (IF APPLICABLE) Revised PDOs and Outcome Targets 14. The PDO was not revised during project implementation, but some of the baseline and end target dates and/or outcome indicator descriptions were modified to align with the project closing date and to better clarify the methodology underpinning the outcomes expected. 15. RBMMPII outcome targets were updated during RBMMPII implementation in keeping with the sector- wide approach. In keeping with the rolling nature of the PRISE program, the two PRISE outcome indicators – (i) the percentage of classified roads in good and fair condition and (ii) the percentage of the rural population within two kilometers of an all-season road – were updated periodically under Development Partner oversight to reflect the program’s positive progress over time and setbacks experienced due to natural disasters. As RBMMPII and PRISE were an integrated program, RBMMPII outcome targets were likewise updated with each RBMMPII restructuring to bring them into alignment with the PRISE targets and to reflect RBMMPII’s contribution to road access and road conditions. The PRISE and RBMMPII target for accessibility was revised upwards from the original target of 17 to 43.2 at the time of the project restructuring of November 2012. 4 However it was revised downwards from 43.2 percent to 40 percent during AF3 in March 2015 and s sustained at that level throughout the remainder of the project. The revision to PRISE targets accounted for the realistic outcomes that PRISE could achieve, inclusive of the activities financed by RBMMPII, without lowering the program’s ambition. Revised PDO Indicators 16. Although the initial PDO indicators were not revised during implementation, an additional PDO indicator was added during the second project restructuring in 2012, to measure the number of direct project beneficiaries. Additionally, three intermediate indicators were added during implementation to monitor achievement of additional activities, and seven outcome indicators were dropped from monitoring after they were achieved5. Revised Components 17. Changes to the project components are listed in Table 2 below: Table 2: Revised Project Components Planned Actual Component Activities Costs6 Costs7 Component A: (a) Administrative costs: Support to the Project Implementing Entity 69.6 38.6 and ANE, at national and provincial levels, to strengthen their (IDA (IDA 4 The baseline and targets for the RAI indicator was modified during the AF1 reflect improved methodology and data. 5 The indicators were dropped from monitoring per guidance to the task team from OPCS. 6 The planned costs as reflected in the Project Appraisal document include the contributions from other donors at the time of appraisal 7 The actual costs represent only IDA financing Page 14 of 62 The World Bank Mozambique -Roads and Bridges Management and Maintenance Program - Phase II (P083325) Overheads: administrative capacity through the provision of goods, technical 34.5) 38.6) assistance and Operating Costs. (b) Capacity building: Strengthening the technical capacity of the Project Implementing Entity, ANE, and the Ministry of Public Works and Housing through: (i) technical assistance in the areas of: financial management; procurement and contract management; control systems; information technology; road management and maintenance; and training to national and provincial staff; performance-based road contracting methods; and (ii) studies on: national and provincial roads strategies, plans and budgets; financial, technical, and procurement audits, including methods to strengthen financial management and procedures for the processing of internal financial audits; highway information and management systems; climate resilience in road design and maintenance; and financial management systems. (c) Road Safety Program: Carrying out of safety related civil works on the road network; development of a road safety data management system. (d) Axle load control, including weigh bridges and traffic devices. (e) Equipment, including computers, generators and road testing equipment. Component B. Maintenance of paved and unpaved roads, including routine and 246.2 30.8 Maintenance: periodic maintenance, local repairs, and road markings; and (IDA 0.5) (IDA emergency works, including emergency flood recovery works in 30.8) Maputo, Gaza, Zambezia, Nampula, Niassa, Cabo Delgado, and Tete provinces (2012 restructuring). Component C. (a) National Road Rehabilitation and Upgrade Program: 709.8 86.9 Investments: Rehabilitation of the Jardim-Benfica and Xai-Xai-Chissibuca sections (IDA (IDA of the N1 road 65.0) 86.9) (b) Engineering Services: Provision of consultants' services for: (i) the supervision of the civil works referred to in (a); (ii) the supervision of the civil works to rehabilitate the Massinga to Nhachengue; and (iii) the design of engineering plans to ensure the Project's sustainability. Component D. (a) Immediate Emergency Works: small emergency works (spot 153.0 109.8 interventions), including associated consulting services. (IDA (IDA Emergency- (b) Medium-term Restoration/Rehabilitation Works: substantive 24.4 109.8) related works medium- and long-term technical solutions to be prepared under GFDRR in the Design and Build (DBT) methodology using an Output and 12.13) Limpopo River Performance Based (OPRC) type of contract, including associated Basin consulting services and contingencies. Component E. (a) Development of national technical design standards and 15.75 14.63 specifications for climate resilient roads, including reviewing existing (CIF (IDA Program for design standards and construction maintenance approaches to ensure 15.75) 14.63) Climate these better address climatic risks; and development of technical Resilient standards and maintenance approaches for paved and unpaved Rural Road classified road network and capacity-building programs for local Infrastructure contractors and service providers. Page 15 of 62 The World Bank Mozambique -Roads and Bridges Management and Maintenance Program - Phase II (P083325) (b) Piloting climate resilient road designs in Gaza Province . Component F Establishment of an immediate response mechanism to facilitate rapid 0 0 Immediate financing for disaster response in the aftermath of a national disaster Response to be triggered through a formal declaration of national or regional Contingency state of emergency by the Borrower Fund Other Changes 18. Other changes associated with the various additional financings/restructuring are summarized below Table 3: Other significant changes to the project Additional Amount Changes introduced/ Rationale Financing (AF) or (if Restructuring (R) applicable) (Month-Year) US$ million First AF (AF1) / 41 • Component C – Investments: One the three N1 lots (Massinga- Restructuring Nhachengue section 57km) was shifted to government funding, the (April 2011) pavement strength was increased, and additional road safety activities were incorporated. • Amend FA to drop IDA participation in the pooled fund and reallocate the unused portion of US$35 million IDA-support to the pooled fund to dedicated funding activities under PRISE8 • Additional technical assistance activities in support of road safety, highway management systems, climate resilience in road and bridge design and development of a strategy to integrate rail service and feeder roads along the Beira Railway Corridor • Results framework- Baseline and outcome targets revised to align with time extension or reflect improvements in estimation of indicators • Extension of project by 18 months from July 1, 2011 to December 31, 2012 Restructuring • Reallocation of resources to emergency recovery road works in response (November 2012) to severe flooding from December 2011 to March 2012 in Maputo, Gaza, Tete, Zambezia, Nampula, Cabo Delgado and Niassa provinces • Changes to the road sector program adopted under the updated PRISE strategy • Results framework- Direct beneficiary indicator added, and outcome targets updated • Extension of project by 12 months from December 31, 2012 to December 31, 2013. (Cumulative extension of 30 months) Second AF (AF2) / 67.28 • Emergency works to restore road access in areas isolated by the flood Restructuring disruptions in the Limpopo River Valley (Gaza province) after extreme (December 2013) flooding in January 2013 8IDA financed US$17 million of eligible expenditures through the pooled fund before the 2011 Additional Financing and Restructuring withdrew IDA from the pooled fund. Page 16 of 62 The World Bank Mozambique -Roads and Bridges Management and Maintenance Program - Phase II (P083325) • Pilot of climate resilient road works • Development of climate resilient road design/construction standards • AF2 approved with a financing gap of US$73.6million due to limited IDA envelope • Results Framework - outcome targets updated; intermediate outcome indicators – three dropped after being achieved, three new indicators introduced, descriptions revised for two • Extension of project by 36 months from December 31, 2013 to December 31, 2016 (Cumulative extension of 66 months) Third AF (AF3) / 73.6 • Close the AF2 financing gap for medium-term reconstruction of Gaza Restructuring province roads affected by the 2013 floods (March 2015) • Results Framework - outcome targets updated; intermediate outcome indicators – four dropped after being achieved, descriptions revised for three • Extension of project by 12 months to December 31, 2017 (Cumulative extension of 78 months) Restructuring • Extension of the closing date for the GFDRR Trust Fund by 6 months to (December 2015) allow the balance of funds to be utilized for the designated emergency works in Gaza province • Results Framework - outcome targets updated; Restructuring • Reallocation of project proceeds between disbursement categories June 2016 Restructuring • Extension of project by 12 months to December 31, 2018 to allow August 2017 completion of AF3 civil works. (Cumulative extension of 90 months) 19. The APL was curtailed at the second phase despite satisfactory achievements of APL2. APL3 was not processed in the light of the emergency situation arising from flooding of the Limpopo River in the Gaza province. Bank management decided to use the ongoing APL2 as a vehicle to provide immediate response to the Government needs. 20. All the changes described in Table 3 above were broadly consistent with RBMMPII’s PDO and original theory of change and supported the project objective of expanding coverage and condition of the client’s roads network. II. OUTCOME A. RELEVANCE OF PDOs Assessment of Relevance of PDOs and Rating 21. The project objective was fully consistent with all the objectives of the World Bank’s Country Partnership Framework (FY17-FY21) which are organized into three focus areas: (a) Promoting Diversified Growth and Enhanced Productivity; (b) Investing in Human Capital; and (c) Enhancing Sustainability and Resilience. The CPF further identifies poor access to infrastructure particularly, transport as a binding constraint to the economy, limiting opportunities for poverty reduction. A key policy objective is to develop enabling infrastructure by improving transportation networks and logistical capacity with an emphasis on linking rural Page 17 of 62 The World Bank Mozambique -Roads and Bridges Management and Maintenance Program - Phase II (P083325) and urban areas to improve market access for agriculture and forestry products and promote international trade. 22. The PDO is also well aligned with the Government program and medium-term strategy which is articulated in its five-year development plan, the Plano Quinquenal do Governo (PQG, 2015-2019). The PQG’s overarching theme is to achieve more inclusive growth through employment promotion and improving productivity and competitiveness. It has five priorities: (a) consolidate national unity, peace, and sovereignty; (b) human and social capital development; (c) promote employment and improve productivity and competitiveness; (d) economic and social infrastructure development; and (e) ensure sustainable and transparent management of natural and environmental resources. It also has three supporting pillars (a) consolidate the democratic rule of law, good governance and decentralization; (b) promote a balanced and sustained macroeconomic environment; and (c) reinforce international cooperation. The project is directly aligned with all four pillars of the PQG. 23. The RBMMPII is also relevant to the Government of Mozambique’s Road Sector Strategy, 2015-2019 which focuses on maintenance of existing assets, improved connectivity, and enhanced rural mobility. The strategy’s three pillars are (a) conservation of road assets through appropriate maintenance; (b) interurban connectivity through a robust national main network; and (c) rural mobility by ensuring “trafficability” of rural roads. 24. Considering the above, the rating for relevance of the PDO is High. B. ACHIEVEMENT OF PDOs (EFFICACY) Assessment of Achievement of Each Objective/Outcome 25. The project development objective is to improve access of the population to all-season roads through maintenance, rehabilitation and upgrading of the classified road network. The key expected outcomes of the project were: (i) the percentage of classified roads in good and fair condition, and (ii) the percentage of the rural population within 2 km of an all-season road. After an assessment of the project objective, major outputs and the outcomes achieved, the ICR rates the achievement of the PDO as Substantial. The following sections provide further information on the assessment. Major outputs 26. Component A – Overheads: This component consisted of administrative costs, training and additional programs to build up the capacity of ANE and RF. 85 staff were trained in various areas of planning, procurement, contract management, financial management and project management. A Chief Accountant was hired to organize the accounting and financial management area of the Roads Sector. A Primavera Consultant was hired to assist in improving the integrated financial management system (FMS). Financial technical and procurement audits were carried out regularly. A GIS-based update of the Highway Information and Management system was carried out. A detailed network characterization was done based on a condition Page 18 of 62 The World Bank Mozambique -Roads and Bridges Management and Maintenance Program - Phase II (P083325) survey of 6,663 km of the paved road carried out in Maputo, Gaza, Inhambane, Sofala, Manica, Tete, Zambézia, Nampula, Cabo Delgado, Niassa. 27. Although the scope of activities under RBMMPII was revised during the project restructurings, the overall level of ambition individual outputs did not change substantially. The single most significant change in ambition at the output level was the reduction in length of the N1 rehabilitation works due to (i) underlying cost escalation and (ii) the need to scale-up the pavement thickness and road safety measures, including pedestrian overpasses. These changes were deemed necessary because traffic volumes on the project N1 sections were found to be growing faster than anticipated at Appraisal. While the overall length of the N1 would decrease, the increased ambition is reflected in the higher traffic volumes served by the N1 segments rehabilitated by the project and by the improved safety features. Accounting for these changes, the project ambition is considered to have declined somewhat, but not enough to trigger a split evaluation. The subsequent changes to the project scope shifted some resources from systematic maintenance and rehabilitation under PRISE to emergency works, which did not lower the project ambition. 28. Component B - Maintenance: The project supported maintenance under a pooled funding arrangement with other donors as agreed at project conception, but Bank support for this component was discontinued with the restructuring under the First Additional Financing approved in 2011, due to constraints faced with the implementation of the pooled funding. Later during the 2012 restructuring, funds were allocated under this component to emergency flood recovery works in Maputo, Gaza, Zambezia, Nampula, Niassa, Cabo Delgado, and Tete provinces. 29. Component C - Investments: RBMMPII rehabilitated and improved two sections of the national South- North road corridor (N1), totaling 103 km. These include (i) a seven km dual carriageway asphalt concrete road along Jardim-Benfica road, (an urban section of the N1) including median, surfaced shoulders, concrete blocks sidewalks, two footbridges, street lightning, geometric improvements at three junctions, and the use of ‘New Jersey median barriers’ and robots to mitigate traffic conflict; and (ii) a single carriageway asphalt concrete road from Xai-Xai– Chissibuca (96 km). Successful rehabilitation of the Xai-Xai - Chissibuca section was threatened by premature occurrence of cracks in the pavement, an external audit contracted in June 2012 concluded the contractor was at fault. After the contractor made repairs, the auditor continued to observe the road and later concluded that “the road was in a good overall structural condition and likely to comply with its design life in most stretches”. 30. Component D – Emergency-related works in the Limpopo River Basin: The major activities under this component have been completed. The immediate emergency rehabilitated about 536 km of flood- damaged roads and restored basic transit-ability in Gaza province. These include protection works to box culverts and construction of drifts to improve climate resilience. Medium-term restoration works prepared under DBT methodology using OPRC contract were also undertaken for an additional 198.1km of the road network. 31. Component E - Pilot program for Climate Resilient Rural Road Infrastructure: The project prepared an Assessment of Climate Vulnerability and Identification of Options for Building Climate Resilience into Lower Limpopo Roads Network in Gaza. Based on the results, the project implemented pilot civil works as Page 19 of 62 The World Bank Mozambique -Roads and Bridges Management and Maintenance Program - Phase II (P083325) part of the emergency recovery works in Gaza Province9. The project also supported development of national road design standards and specifications10 to ensure that future roads are improved to a climate resilient standard. The technical standards include nine manuals11. The program also implemented a capacity building program for local contractors and service providers, aimed at ensuring local contractors’ responsiveness in carrying out climate resilient road repairs. 32. Component F - Immediate Response Contingency Fund: This component was designed for the establishment of an immediate response mechanism for disaster response in the event of a national disaster. Although flood emergencies occurred during implementation, reconstruction of affected roads was deemed to align with the RBMMPII PDO, and Government and World Bank responded to these events through the standard restructuring and Additional Financing procedures. Outcomes 33. The PDO was to improve access of the population to all-season roads through maintenance, rehabilitation and upgrading of the classified road network. The project outcome indicators for measuring achievement of the PDO were: (a) roads in good and fair condition as a share of total classified roads; (b) Share of rural population with access to an all-season road; and (c) direct project beneficiaries. The RBMMPII PDO level indicators measured the progress of the overall PRISE program and included the project’s contributions to improving road access and improved road conditions, which support the broader goal of boosting economic productivity by connecting producers and markets. The main activities in support of the PDO were (i) rehabilitation of the N1, (ii) flood recovery works, and (iii) capacity building and technical assistance support to the Road Fund and ANE to implement and sustain the network. 34. Although the PDO level indicators measured progress of the overall PRISE program, they also reflect the project’s contributions to the key PRISE outcomes of improved road access and road conditions. As the Bank support was to an APL, the indicators were set at the sector level, with intermediate outputs to reflect the Bank financing. This is attributable to the assumption that the pooled funding by donors would be governed by IDA procedures and guidelines and so in essence the entire project as designed could account for these outcomes. This makes it difficult to perform an assessment of the achievement of the PDO from the Bank perspective only. Therefore, the assessment will look at the PDO/sector level indicators and also review the achievements/outcomes attributable to the Bank financing. 35. Achievement of the project outcomes is considered satisfactory primarily because the project interventions maintained focus on the PDO over time and because the project reasonably achieved its intermediate objectives in support of the PDO. The baseline percentage of the classified road network in good or fair condition was 64 percent and the initial end-target was 77 percent. Due to progress of the PRISE 9 ANE will need to observe the pilot civil works to determine if they offer lessons that could be useful to improve practices used elsewhere in the country. 10 Previous to development of national standards, Mozambique typically relied on standards developed for South Africa. 11 The nine manuals are: (1) Site Investigations, (2) Geometric Design, (3) Pavement Design Manual, (4) Rehabilitation Design (5) Hydrology and Drainage Manual (6) Specification for Bridge Loads, (7) Standard Specification for Roads and Bridges, (8) Standard Details for Roads and Bridges (9) Guidelines for Performance Specifications Page 20 of 62 The World Bank Mozambique -Roads and Bridges Management and Maintenance Program - Phase II (P083325) program, the end-target was revised upwards (to 78 percent) in 2011 and then revised downwards in 2013 and 2015, to 73 percent and 71 percent, respectively, due to flood impacts. The current status of this indicator is 72% due to the impact of extreme weather events. 36. At the start of the project in 2006, the percentage of the rural population within 2 kilometers of an all- season road was measured as 11 per cent with a target achievement of 17 per cent in June 2011. During the first additional financing, the baseline and end target were revised upward to 25.7 per cent and 32.7 per cent respectively due to an error in the methodology for measurement of RAI. The outcome targets were further revised in November 2012, December 2013, and March 2015 to reflects improvements in RAI or impact of flooding as the case may be. The final target of 40 percent set during the March 2015 restructuring was sustained till the end of the project in December 201812. The percentage achieved at project closure is reported as 29.3 percent using a new spatial methodology for determination of RAI13. In comparison, the achievement of the RAI, based on the old methodology is assessed to be about 40 percent and therefore, the RAI indicator is considered to be achieved. 37. Rehabilitation of the N1 roads under the project, i.e. Jardim Benfica (dual carriageway) and Xai-Xai Chissibuca (single carriageway) contributed to the achievement of this outcome by strengthening the main North South Link sections of which had been rehabilitated under the APL1 and were performing well. In the Jardim-Benfica section, flow of traffic has improved as sufficient capacity of the road way has been provided. The emergency works in carried in Maputo, Gaza, Zambezia, Nampula, Niassa, Cabo Delgado, and Tete provinces helped to restore access quickly to vulnerable people caught in the aftermath of the flooding events. 38. The impact on project beneficiaries is seen in the third PDO indicator which was introduced during project restructuring in November 2012. At project close, data from the latest survey in 2015 showed that the roads were accessible to 4,660,000 beneficiaries (45% female, i.e., at least 2,140,000 female). This target therefore fell short by about 31 percent of the expected. 39. Besides the hard infrastructure several capacity building activities were carried out under the project. These contributed overall to the project objective by ensuring sound and sustainable management of the transport infrastructure. The training of RF, ANE, UASMA staff has contributed to effective coordination of sector institutions at both the provincial and national level. Axle load monitoring and road safety programs also contribute to the overall efficiency of the sector to maintain the reliability of the road infrastructure. Justification of Overall Efficacy Rating 40. As discussed in Para. 33-40, two of the three the PDO indicators were achieved (road condition mix and rural accessibility index) by project closure. Furthermore, the outputs of the IDA financing as discussed in 12 In late 2016, with the adoption of new spatial methodology to calculate RAI (Mozambique was one of the pilot countries), the bank team compared the RAI as per new methodology with the number using old methodology. The team found that the old survey based approach significantly overstated the RAI. For example, in 2010 the old survey based RAI was as 32% against 20.4% established using the new spatial approach, putting a question mark on the old methodology. The reported 2015 RAI of 29.3% was derived using the new spatial data technique. Therefore, applying the same difference, the RAI is about 40.9% using the old methodology. 13 Transport & ICT. 2016. Measuring Rural Access: Using New Technologies, Washington DC: World Bank Page 21 of 62 The World Bank Mozambique -Roads and Bridges Management and Maintenance Program - Phase II (P083325) Para. 26-32 were also substantial in comparison with the agreed activities, and contributed to the achievement of the PDO. Therefore, in consideration of these achievements, the efficacy is rated Substantial. C. EFFICIENCY Assessment of Efficiency and Rating 41. The economic analysis was conducted for each of the N1 project roads using HDM-4 and the medium- term restoration works earmarked under the emergency works (using RED Model). These roads represented 80% of the total project cost. The analysis is based on a 20-year life cycle. The costs are made of capital interventions required within a time horizon of ten years and a pavement design life of 20 years. The resulting Net Present Value (NPV) and the Internal Rate of Return (IRR) are aggregated and summarized in Table 3 below. Detailed analyses are presented in Annex 4. 42. The efficiency was affected by delays in implementation arising from the procurement process and in the case of the medium-term restoration works, the delays in finalizing the climate resilient designs and slow contractor mobilization. In view of these shortcomings the overall efficiency is assessed as being modest. Table 3: Economic Analysis of RBMMPII Civil Works Projects NPV (US$, millions) EIRR (%) Lot Road Name Ex-Ante Ex-post Ex-Ante Ex-post N1 Roads 1 Jardim - Benfica 69.100 23.72 53.8 26.4 2 Xai-Xai Chissibuca 23.100 108.68 17.6 56.1 Medium term restoration of roads (Gaza Province Roads) 1 N/C: 3 de Fevereiro/CrzN220 5.070 12.26 30 12 2 R454-Mapapa/Chilembene 3.429 22.69 24 18 3 R859: Chilembene/Maniquenique 6.835 1.19 30 22 4 R890: Chókwè/Guijá 2.791 0.91 34 34 5 R448: Chókwè/Macarretane 17.082 2.62 44 33 6 N220: Chissano/Chibuto 17.116 2.11 27 20 7 N221-Chibuto /Guijá 35.425 6.05 34 25 D. JUSTIFICATION OF OVERALL OUTCOME RATING 43. As described above, the project’s relevance is rated as high, its efficacy is substantial, and the efficiency is modest. Although the components and outcome targets were revised over time with the project’s additional financing, no ‘split rating’ was deemed necessary as the scope of the PDO remained relevant to the additional project activities. 44. Based on the above, the overall outcome rating is assessed as being moderately satisfactory. Page 22 of 62 The World Bank Mozambique -Roads and Bridges Management and Maintenance Program - Phase II (P083325) E. OTHER OUTCOMES AND IMPACTS (IF ANY) Gender 45. Although 45 percent (about 2,140,000) of the project’s direct beneficiaries at closure were women, there is little evidence of RBMMP_II’s impact in terms of gender. That is because the project did not perform detailed assessment of second order outcomes beyond the indicators of its Results Framework. Institutional Strengthening 46. RBMMPII successfully supported key institutional reforms to modernize road sector management. Prior to declaration of project effectiveness, all key staff of ANE had been competitively selected and put in place. A new Board of the autonomous, dedicated road fund ANE (second generation road fund) was constituted and was already operational when the project became effective. The restructuring of ANE was successfully carried out and the devolution of functions the provincial delegation was successful in ensuring greater efficiency. Approval of the new Road Act in 2011 further strengthened the restructuring with legislative backing. A policy to commercialize road network management was also developed. Both ANE and RF have made significant strides in their new roles and have emerged as stronger institutions guided by modern road management principles. Furthermore, the creation of the Flood Response team FRT which is specialized in responding to such disaster. Initially established with support from external consultants, the team now has procedures that are well integrated into the operational work and has the readiness to respond to flooding emergency rapidly. Mobilizing Private Sector Financing 47. RBMMPII provided a strong environment for policy dialogue including discussions on public-private partnerships (PPPs) in the transport sector. Though these discussions did not come to fruition during the project a recent publication suggest that GoM has moved forward with the concepts discussed and is preparing to concession five national roads to private operators14. Poverty Reduction and Shared Prosperity 48. The rehabilitation the N1 road network has contributed to the improvement of regional and national connectivity. The reduction in vehicle operating costs is expected to result in price reduction for transport service fare in relative terms. The reduction in transport costs results in positive outcomes for shared prosperity. A recent assessment of poverty in Mozambique15 indicates that high and stable growth in Mozambique’s economy has led to poverty reduction especially after the 2000. The poverty rate has been falling since 2000 and at a more accelerated rate after 2008. This is the period in which the APL was implemented. Incidence of poverty is reported to have reduced from 52.3% to 48.4% in 2015. 14 https://clubofmozambique.com/news/mozambique-ane-prepares-concession-of-five-national-roads-to-private-operators-139264/ accessed on June 1, 2019 15 Mozambique Poverty Assessment, Strong But Not Broadly Shared Growth; World Bank, April 2018 Page 23 of 62 The World Bank Mozambique -Roads and Bridges Management and Maintenance Program - Phase II (P083325) Other Unintended Outcomes and Impacts 49. The project was able to escalate climate change issues to fore. Gaza works under the PPCR forced a rethinking on how to deal with climate change and associated risks. Mandatory screening of all major ANE projects using WB tool was introduced. 50. Cracking of Xai-Xai Chissibuca road and flood damage to structures during the implementation led to detailed investigations of the underlying causes. In the end, it became evident that the country lacked well defined road standards that are suited to its geological situation. AF 2 began to tackle this challenge by redefining the road standards and specifications in the country, and activity which was successfully completed with the outcome now adopted. III. KEY FACTORS THAT AFFECTED IMPLEMENTATION AND OUTCOME A. KEY FACTORS DURING PREPARATION 51. Realistic objectives but complex design. The project objective was simple and straightforward (access of the population to all season roads) and reflected the concerted effort from all key stakeholders to address a common issue of improving the quality of roads. At the same time, the project design was well balanced as it directly addressed key institutional and capacity requirements to achieve results. The three project components (Overheads, Maintenance and Investments) aligned well with mandates of the various government agencies i.e. RF, ANE and Instituto Nacional de Viacao (INAV) i.e. the National Traffic Institute. However, the partnership arrangements for 19 donors in the sector under the SWAP mode led to further difficulties downstream. 52. Donor coordination and harmonization. The commitment of Donors to the PRISE was important during preparation. The projected fund flows and the willingness to work with Government towards consolidating the institutional reforms and to embark on a SWAP arrangement is viewed positively from the perspective of providing an impetus to Government to fulfil all requirements needed to implement the PRISE successfully. Furthermore, establishment of PRISE as a rolling program updated every 3-4 years provides for flexibility to adjust as and when donor contributions become available. 53. Well-designed results and monitoring framework. The results framework was derived from the broader sector performance assessment framework in PRISE which had been well designed to provide an overview of all interventions in the road sector under the harmonized approach agreed with Development Partners. The indicators both at intermediate and PDO level were selected from the broader set of indicators and were clearly linked to the outcome indicators. The framework was already in place with a clear structure of implementation ensured that appropriate monitoring data was collected and available for timely review. The shortcoming of the monitoring framework was that it was not suitable for monitoring the project level outcomes and therefore did not provide for the outcomes for which IDA financing is accountable. 54. Adequate risk and mitigation measure identification. The project risks were identified at the onset. These were identified as constrained implementation capacity, risk of implementation delays arising from bureaucratic procurement approval processes external to ANE including delays due to clearances needed from Visto for large value contracts, financial management risks, poor governance and corruption in the sector as Page 24 of 62 The World Bank Mozambique -Roads and Bridges Management and Maintenance Program - Phase II (P083325) well as delays in generating sufficient pooled funding or occurrence of surplus due to slow progress of works. The risks were understood to reflect systemic weaknesses, in particular a weak control environment and limited management capacity. The project design addressed these risks well. Agreement with GoM to use a more simplified process of procurement approval was secured; strengthening of implementation capacity at ANE head office and in the province was planned through strengthened and a clearer governance structure developed to delineate responsibility between MoPWH (for strategic oversight), RF (for project implementation) and ANE (for project execution). 55. Readiness for implementation. In summary, the project was well prepared with simple and straightforward objectives, as well as clear understanding of the strengths and weaknesses of the participating agencies, albeit with a complex design in terms of the financing arrangements for the pooled fund mechanism. The works were ready at the time of appraisal and the procurement of the works and supervision services were ongoing. The preparation built on capacity and experience from the previous years of implementation of the APL1, and systematic progress was being made in the overall contribution of the bank to the RBMMP. B. KEY FACTORS DURING IMPLEMENTATION i) Factors subject to Government control 56. Strong commitment and leadership by Government of Mozambique. The commitment of GoM was evident, in working with DPs to harmonize approaches and to reduce transaction cost of implementing projects. Government carried out the restructuring of the ANE and took steps to further strengthen the ANE and its decentralization process by ensuring sufficient staffing and building capacity. UMASE was also strengthened to collect project indicators on a regular basis. 57. Difficulties in establishing an integrated financial management system. Per the project design an integrated financial management system was to be implemented at the RF to ensure fiduciary control. The RF accounting system was based on conventional accounting software running in parallel with Primavera and SunSystems. The SunSystems was initially adopted as the preferred integrated FM software. Recruitment of a Chief Accountant to help install and train staff was fraught with difficulties, and the new system selected, Sun Systems was found to be too complex for staff. Therefore, RF opted for the Primavera system which has been operational over the last five years. The impact of this was delays in financial reporting and inadequate oversight in the initial years of the project. 58. Monitoring and Evaluation (M&E) was adequate at the sector level and helped to review the level of achievement of outcomes over the project period. Data were collected systematically and UMASE provided updates to the PAF bi-annually. The process was effectively mainstreamed into the operations of the road agencies and helped to reflect the changing implementation environment and the progress made towards achieving the project objectives. 59. Approvals by the Administrative Tribunal added to implementation delays. As part of the requirements for approval of contracts, all contracts and paperwork were to be translated into Portuguese, sent to the Administrative Tribunal, the institution charged with ensuring all paperwork is legally in order to be reviewed, prior to signature. Their processes characteristically take no less than 60-90 days, but usually goes beyond. This challenge was identified at project conception, and the process was streamlined. However, in the course Page 25 of 62 The World Bank Mozambique -Roads and Bridges Management and Maintenance Program - Phase II (P083325) of project implementation, the rigorous application of this rule to donor financed projects led to massive delays in signature of contracts. 60. Frequent changes in leadership at the ANE and RF had an impact on decision making. Particularly from 2014 onwards several changes in leadership were experienced, and this was at a critical time for the project, when changes to scope and implementation had been approved. The learning curve for each change required time to adjust and at times slowed down critical decisions. 61. Establishment of a Flood Response Team. With the emergency caused by flooding events, the establishment of a Flood Response Team under ANE proved timely and critical to effective implementation of the emergency works approved under additional financing. The team had the focus and resourcing to deal with project implementation issues, which required expedited implementation support and decision-making, and demonstrated GoM commitment to resolving the emergency situations that occurred. (ii) Factors subject to World Bank control 62. Implementation support was adequate. Project implementation support was carried out effectively with 3-4 missions held per year. The proximity of the Bank’s fiduciary staff helped the Bank anticipate problems, e.g., gaps in coordination and engagement, and be proactive and timely in assisting government to resolve them. Opportunities were identified and acted upon in emergent situations, as evidenced in the decisions to include climate resilient designs and PPP analytical work and Design Build approaches under OPRC methodology, as well as the inclusion of a zero component of the project during restructuring to allow for timely emergency response in the event of a national disaster. Reporting, as in ISRs and Aide-Memoires, was candid throughout and offered management sufficient opportunity to provide solutions within the general framework of the Bank’s engagement. For example, as of the second additional financing a funding gap had already been identified during the preparation in the implementation and made it relatively easy to access funds once they became available. Also, the instruments available for emergency operations i.e. the OP.10 procedures were well deployed to assist the Government of Mozambique in crisis situations. 63. Monitoring and Evaluation at the project level was inadequate. Despite the change in the focus of the Bank by dropping the pooled funding arrangements, the changes in results matrix during the project restructuring kept the same PDO indicators as for the sector level. While this may be desirable from the point of view of an APL, the Bank should have used the opportunity to include indicators at the PDO level for the project. 64. The Bank was responsive to the emergency. The Bank as a partner was very responsive to Government at the time of the cyclonic events of 2012 and 2013. Given the large scale destruction to the road network the Bank offered the flexibility of OP10 to help address immediate emergency works and ensure that connectivity is restored to impacted areas. To consolidate the effort further climate resilient designs were piloted to address the emerging needs and build capacity of contractors for future construction works of such nature. (iii) Factors outside the control of government and or implementing entities 65. Natural disaster and related impacts. The occurrence of two serious flooding events during the project were totally beyond the control of any key stakeholder. Mozambique is now ranked as 1st among countries that are most exposed to climate change risks. The country experiences long dry spells, severe floods and Page 26 of 62 The World Bank Mozambique -Roads and Bridges Management and Maintenance Program - Phase II (P083325) frequent coastal storms all which impact the social and economic fabric of the country. The extent of these adverse weather occurrences was significant as they also destroyed part of the existing road infrastructure and added to governments burden of finding additional budget funding. In the case of RBMMP II the Bank project served as a useful instrument to deploy funds quickly to respond to disasters. 66. Higher than expected bid prices for the N1 Roads. At the time of bid submission for the N1 roads in June 2008, a massive increase in input costs particularly for fuel (an increase of about 60%) was observed. This, combined with the need to scale up the project to respond to increased traffic volumes, updated design standards16 and provide additional pedestrian safety facilities (pedestrian bridges and street lighting) led to the dropping of Lot 3 of the N1 roads from Massinga-Nhachengue to accommodate these changes 67. Failure of the pooled funding arrangements. At appraisal, the program was conceived with a pooled funding arrangement, with 19 development partners (DPs) at a cost of USD $1,043million. Joint approaches for financing arrangements, financial management and procurement procedures, as well as a common reporting and monitoring system were agreed in principle. At the time of appraisal, a draft MOU had been prepared in readiness for signature at the next semi-annual meeting of PRISE Semi-annual meeting. The proposed arrangement stipulated that IDA would exercise fiduciary oversight on for the pooled funding arrangement through prior review of the procurement of contracts above certain thresholds. At that point some of the donors decided against the PF arrangement. Therefore, the expected funds flow for the overall implementation of the program from partners was delayed, and the project had to be restructured in 2011 to focus on the IDA financing. 68. Introduction of OPRC. The introduction of OPRCs under DBT methodology had its own advantages and disadvantages. As a tool for implementing emergency response measures, it offered the flexibility for contractors to innovate and resolve problems more efficiently. Contractors had to quickly upgrade their skills and methodology to adapt to this. However, some of the contractor’s proposals were weak, and required extra supervision effort from the FRT to ensure successful implementation. Going forward, and from the implementing agency point of view, this contracting format could be scaled up across many areas of the network. 69. Lower than expected bid prices for the emergency works. In spite of delays in finalizing the designs for the emergency restoration works, the bids which had been priced on a lump sum basis resulted in about US$20million in savings to the project. 70. Security situation in parts of Inhambane and Sofala provinces impacted preparatory activities for the next set of road works between October 2013 and March 2015. Eventually the delays on account of the political force majeure led to suspension of the design studies in Sofala province to focus on preparation of a new project. 71. Macroeconomic down turn in 2017 affected the project outcomes. Sharp reductions in public expenditure following the deteriorating macroeconomic situation in the country have adversely impacted the road sector. 16 At the time of appraisal, ANE was carrying out a review of the Southern Africa Transport Commission (formerly SATCC) standards to ensure how these can be best adopted to conditions in Mozambique. The review had been carried out by the time of restructuring of the project, so this was taken into account, resulting in the need to provide an additional thickness of the asphalt layer from 30 mm to 40 mm Page 27 of 62 The World Bank Mozambique -Roads and Bridges Management and Maintenance Program - Phase II (P083325) The sector budget contracted by 16.5 percent and 23.8 percent in 2016 and 2017 respectively. Maintenance expenditure on roads and bridges declined by 45 percent between 2015 and 2017. These spending reductions were reflected in lower intermediate results achieved. For example, planned routine maintenance and planned paved road maintenance are markedly lower at 68 percent and 70 percent respectively than targeted (100 percent). IV. BANK PERFORMANCE, COMPLIANCE ISSUES, AND RISK TO DEVELOPMENT OUTCOME A. QUALITY OF MONITORING AND EVALUATION (M&E) M&E Design 72. The project M and E design was consistent with the broader road sector Performance Assessment Framework (PAF) developed by all sector stakeholders. This was in line with the SWAP approach adopted by DPs and government after the Paris declaration. The PAF consisted of a total of 21 indicators targeted at measuring improvements in the road network, sector management and institutional reforms. The RF had a specialized reporting and Monitoring Unit (UMASE) responsible for data collection and reporting quarterly and semiannually on the PRISE outcomes. 73. The outcome indicators were appropriately selected from the PAF to address the PDO. The percentage of roads in good and fair condition and the percentage of the rural population within two kilometers of an all- season road were good indicators of the program. The target levels were realistic, and reflected the broader aspirations of a modernized road sector institutional management. However, these indicators were too broad to establish a direct linkage with IDA financing. The project did contribute to these outcomes; however, a direct correlation cannot be established. 74. During the various restructuring, appropriate indicators to indicate the changes in project design were reflected. These were pitched at the intermediate indicator level. During the first additional financing, the pooled funding arrangement was dropped and essentially the IDA project focused on the outcomes to which IDA was accountable. In spite of this, and after several restructurings, no indicator for capacity building was introduced at the PDO level though it was a substantial aspect of the project. 75. Although the PDO level indicators measured progress of the overall PRISE program, they also reflect the project’s contributions to the key PRISE outcomes of improved road access and road conditions. As the Bank support was to an APL, the indicators were set at the sector level, with intermediate outputs to reflect the Bank financing. This is attributable to the assumption that the pooled funding by donors would be governed by IDA procedures and guidelines and so in essence the entire project as designed could account for these outcomes. Unfortunately, this did not materialize and essentially the project was restructured to focus on IDA inputs which basically shifted the approach to IPF even though the commonly agreed sector policy was in place. In spite of this, the PDO indicators defined at the programmatic level were maintained except with the addition of the indicator on project beneficiaries which further elaborates the RAI indicator. The various restructuring missed the opportunity to drop the SWAP approach and revise the PDO indicators to ensure that they are linked to the funding provided. This weakness in the M&E makes it difficult to perform a realistic assessment Page 28 of 62 The World Bank Mozambique -Roads and Bridges Management and Maintenance Program - Phase II (P083325) of the achievement of the PDO from the Bank perspective only. Therefore, the assessment will look at the PDO/sector level indicators and review the achievements/outcomes attributable to the Bank financing. M&E Implementation 76. M&E implementation was done in-house by UMASE. The indicators were collected on a regular basis and were disseminated in quarterly and semiannual progress reports. Both the outcome and output indicators served as signals on how the project was progressing towards achieving its targeted outcomes. The indicators also signaled the changing implementation environment facing the project and whether progress was being made towards achieving the project objectives. M&E Utilization 77. The M&E reports prepared were discussed during the PRISE Joint Semi-Annual Review Meetings. The data and results from analyses were therefore embedded in the decision-making process. Both the outcome and output indicators served as signals on how the project was progressing towards achieving its targeted outcomes. The indicators also signaled the changing implementation environment facing the project and whether progress was being made towards achieving the project objectives. The indicators were revised as appropriate based on the overall level of implementation and the projected forecasts. Justification of Overall Rating of Quality of M&E 78. The M&E system was able to quickly identify gaps and needs and inform decision makers at the sector level through simple but comprehensive database and data analysis. Though there was a reduction in overall targets of the PAF overtime, the selected indicators remained relevant over the project life. However, at the project level, the PDO did not reflect the significant capacity building under the project. Neither did it have results indicators for it reflected at any level in the results matrix. Therefore, an assessment of IDA contribution on the current PDO alone would be flawed. Therefore, the quality of M& E is rated Modest. B. ENVIRONMENTAL, SOCIAL, AND FIDUCIARY COMPLIANCE Environmental safeguards 79. The project was classified as a Category B Project, and thus triggered Environmental Assessment (OP/BP 4.01) and Cultural Property (OPN 11.0317). A strategic environmental impact assessment had been carried out under the APL1, as well as guidelines for environmental assessments. 80. For the emergency works, OP10.0 was triggered and as such the EIA prepared for RBMMP 2 was used as guidance for the preparation of the EMPs. RBMMPII also triggered OP4.11 (Physical and Cultural Resources). However, the restoration civil works did not include works located in, or in the vicinity of, recognized cultural heritage sites. That notwithstanding, a section on chance find procedures was included, as part of the ESC in all new contracts, and was included in the project ESIA/ESMP. 17 At the time of appraisal this policy was being revised as OP4.11 Page 29 of 62 The World Bank Mozambique -Roads and Bridges Management and Maintenance Program - Phase II (P083325) 81. Throughout the project, environmental compliance was satisfactory. However, safeguards reporting by the client needed improvement in terms of its quality and regularity. Social safeguards 82. The RBMMPII triggered (a) Involuntary Resettlement (OP/BP 4.12), and (b) Cultural Property (OPN11.03) social safeguards policies. Both the Resettlement Policy Framework (RPF) (which had been prepared under APL1) and the RAP for the project were disclosed prior to appraisal. Project implementation was generally carried out in line with the social safeguards frameworks and plans, and there was effective engagement with project affected persons throughout the period, especially where the PAPs along the Jardim- Benfica Road who were displaced by the road works and were consequently relocated to a new settlement. For the emergency works no land acquisition was necessary for the rehabilitation work, neither was there any loss of other assets or crops. The UASMA which is the Environmental and Social Unit of ANE showed a strong performance in the implementation of the RAP. The project was subjected to an external audit of the RAP implementation and it was rated satisfactory. Procurement 83. At the start of the project, procurement for the pooled fund component was carried out in accordance with GoM Public Procurement Regulation with the provision that domestic preference shall only apply to International Competitive Bidding (ICB) procedures and, that for ICB, bidding documents and advertisement shall also be available in English. All other procurement was carried out according to IDA guidelines. In 2008, an independent procurement audit determined that 10 contracts totaling about US$1.43618 million had been mis-procured and were hence declared ineligible for payment. This reflected a capacity constraint in understanding the requirements of the pooled funding arrangements and the governing guidelines. The dropping of the pooled funding arrangement during the first additional financing also meant that the entire project from then onwards was subject to IDA procurement procedures. ANE took steps to build capacity for procurement to address gaps procurement performance. With the establishment of the FRT much later during implementation, a dedicated focus to deliver procurement under emergency conditions was provided which performed creditably. Financial Management 84. Financial Management performance lagged at the beginning of the project, due to inconsistencies in processing procurement transactions and delayed submission project audit reports as a result of challenges related to improving the financial management system of the Road Fund (RF). This coupled with the complexity of the pooled funding arrangements made Financial Management of the project challenging in the initial years. Progress in resolving these challenges was made through the capacity building for RF accountants and the completion of the customization of an integrated financial management system. The quality of the IFRs and timing of submission of both IFRs and audit reports continued to improve after the third year of implementation. Initially, there were joint Financial, Technical and Procurement audits consistent with the SWAP approach. However, after the first restructuring, the external financial audits were carried out separately. The audit opinions were unqualified (clean) throughout project implementation. With the third additional financing, three additional Designated Accounts were required to be opened to receive 18 Of this amount, US$430,600 was allocated to IDA as ineligible, since the procurement in question was from the pooled funds Page 30 of 62 The World Bank Mozambique -Roads and Bridges Management and Maintenance Program - Phase II (P083325) and make payments from IDA CRW Additional Financing (Grant and Loan), GFDRR and PPCR (Grant and Loan) respectively. Despite the multiple accounts established for disbursement of project funds, FM staffing, accounting and internal control systems, and maintenance of supporting documents were satisfactory. C. BANK PERFORMANCE Quality at Entry 85. The project design built on the work of the APL1 and was straightforward, incorporating lessons learnt from the previous APL1. The PDO was of strategic relevance to the government’s action plan for reduction of absolute poverty (PARP II 2006-2009). The M&E arrangement took advantage of existing monitoring system which had been enhanced by the Performance Assessment Framework which had been prepared as a key element of PRISE. This broadly underscored the commitment of DPs to harmonize approaches in line with the Paris Declaration. In this context, the APL 2 provided greater flexibility in adapting project design and finance to client needs. 86. The project which was a partnership between GoM and nineteen DPs also emphasized on the development of the appropriate annual periodic maintenance program on paved roads to ensure sustainability of the program. A jointly developed and agreed sector policy, strategy, and investment plan, common financing arrangements financial management and procurement procedures, as well as a common reporting and monitoring system was in place at the time of appraisal. However, consultations on the partnership arrangements were limited and largely driven by the Bank on the popular wave of donor harmonization. The proposed mode of execution and collaboration – codified in a Memorandum of Understanding (MoU) to be signed by all “pool funding” DPs and a Code of Conduct (CoC) by all partners contributing to the SWAP through pooled or parallel financing, or both – fell through. It is apparent that partners’ buy-in was limited at the time of appraisal, especially with regards to the fact that the IDA policies will govern the pooled funds. This was a flaw that resulted in delays to project implementation and resulted in a restructuring of the project. 87. The fiduciary team adequately assessed the procurement and financial management capacity of the implementing agencies, especially with the separation of FM responsibility from ANE and its assignment to RF, and incorporated technical assistance in the project design as required. Risk assessment was realistic and pragmatic. For example, a key risk identified in the project design was the fiduciary risks related to the FM arrangements and the capacity of the RF given its workload under the new arrangements as well as the delay in generating sufficient funds under the pooled fund mechanism which eventually materialized. Poverty, gender, and social development aspects were considered (including HIV/AIDs prevention) and integrated into sub-projects. Environmental and social safeguards were prepared properly, with provision for grievance redress mechanism early on in the project implementation. Adequate consultations were undertaken as an integral part of project design and integrated into the implementation arrangements. 88. As noted earlier the M&E system design was more focused on the sector program, and had few project level indicators at the project level. The capacity building effort for example were not reflected at all in the results matrix. On hindsight using targets and indicators for the entire program made it difficult to assign attribution to the specific contributions of the IDA financing to the APL2 project. Page 31 of 62 The World Bank Mozambique -Roads and Bridges Management and Maintenance Program - Phase II (P083325) Quality of Supervision 89. Understanding of implementation agency’s potential and limitations. The Bank’s supervision was effective in supporting RF and ANEs implementation of the project. With good understanding of the weaknesses and strengths of the implementing agency, the Bank’s team was able to address the issues detected in a collaborative fashion, with the Bank and the client working together to find solutions. At the time of appraisal, specific restructuring of ANE had been identified and discussed with DPs. This collaborative approach led to the right capacity building support and training (e.g. on procurement and FM in the beginning of the project, technical aspects and on safeguards at preparation and during implementation). 90. Mid-term review (MTR). A thorough and well-documented MTR was carried out between March and September 2009. The MTR confirmed that the project design was still relevant and practicable, but identified the need to rescope the project in the light of the risks that had manifested, namely the failure of the pooled fund mechanism and the associated delays in disbursement, as well as the unforeseen cost increases. The MTR team identified areas in need of further support and/or strengthening, particularly at the provincial level. 91. Technical support and flexibility within scope. The Bank’s team was well placed to provide technical support to help RF/ANE cope with unexpected changes, i.e. cost increases, failure of the pooled funding mechanism and natural disasters arising from cyclonic events. Further support was also provided through the second and third additional financing in order to respond to emergent needs of the sector. The Bank emergency procedures under OP/BP8.00 were utilized to ensure expedited response to natural disaster events. The team supported the client in adjusting the project design to consider climate resilience and implement the new emergency repairs under OPRC methodology that resulted in higher efficiency arising from lower than budgeted costs and timely construction. A robust policy dialogue was held with the client on various issues, including institutional reforms, and alternative approaches to procuring, negotiating and financing PPPs, and climate change resilience. Technical assistance was also mobilized from a PPIAF grant to support the client to carry out a study on introducing PMMR in Maputo and Gaza Provinces. The project was also a vehicle to support a DPO for climate resilience under which the Minister of Public Works and Housing in November 2014 approved a mandatory tool for climate risk screening tools for all new roads. 92. The project’s flexibility was over-stretched. From an original project amount of US$100 million, additional resources of about US$182million were provided largely for emergency works. While the ability of the Bank to respond to such a situation using an existing project is commendable, such an increase in resources called for the design of an emergency project for which the Bank has relevant guidelines, with a very specific focus of making the affected areas transitable. Therefore, the later years of the project implementation progressively veered away from the development of the priority N1 links to basic network restoration activities. 93. Truncation of the APL series. Prior to the occurrence of the cyclonic events, the project made good progress towards the achievement of the APL3 triggers, and the Government commenced preparation of APL3. However, with the shift in focus to emergency response, APL3 preparation was stalled. Furthermore, the available IDA resources were consumed in the restoration works under AF2 and AF3. With 74 percent of the classified network in good or fair condition as of November 2014, the Government’s new Road Sector strategy emphasized asset preservation and preventive maintenance, interurban mobility and improvements in rural connectivity. In parallel several ministries were developing strategies and investment plans with a direct bearing on the transport sector but were being done in a fragmented manner. The new CPF (2015-2019) was focused on highly-targeted interventions in the highest-poverty regions of Mozambique, which was a Page 32 of 62 The World Bank Mozambique -Roads and Bridges Management and Maintenance Program - Phase II (P083325) departure from the APL’s broader road network focus. Therefore, the relevance of a third APL was put in question, and Bank management took the decision to truncate the APL series and focus on an integrated feeder roads program in the next phase of assistance to GoM defined under the CPF 2015-2019. Justification of Overall Rating of Bank Performance 94. The Bank’s performance is rated Moderately Satisfactory for both Quality at Entry and Satisfactory for Quality of Supervision; hence Bank performance overall is rated Moderately Satisfactory. D. RISK TO DEVELOPMENT OUTCOME 95. The main risks to the development outcomes are that the government may not allocate adequate funding for road maintenance and that the government may neglect progress related to climate resilience and emergency response, particularly the Flood Response Team (FRT). The project’s capacity building activities have helped mitigate these risks to some degree. For instance, project support to sustain road sector reforms and build institutional capacity have established a more robust institutional environment for managing the road sector. Progress improving emergency response is likely to be sustained because the Flood Response Team (FRT) established under the project has grown into a full-fledged unit responsible for emergency response. The project also exposed ANE to methods for improving the climate resilience of the road network and supported the development of technical specifications for the same, which are supporting mainstreaming of climate resilience aspects into civil works design. The ongoing Integrated Feeder Road Development Project (P158231) is supporting the government’s capacity to undertake climate resilience planning at the network level. 96. However, road maintenance funding resources have been declining in recent years due to both the macroeconomic challenges and the increasing demand for road infrastructure to support economic productivity. The high vulnerability of Mozambique to flood disaster is the most critical risk to sustainability, however, because future emergencies may lead to diversion of maintenance funding towards emergency restoration works. V. LESSONS AND RECOMMENDATIONS 97. Long term sector engagement in a substantial manner stimulates progress in institutional reforms. The policy actions, passing of the New Road Act and effective implementation of the RF and ANE restructuring under APL-II indicates that a sustained engagement can be a useful tool in drive reforms and efficiency improvements in public sector management. 98. Commitment of partners to procedures and guidelines for management of joint arrangements (such as pooled funding) should be secured prior to project appraisal. The application of Bank procurement guidelines, in retrospect was too ambitious. The proposed pooled funding arrangement fell through because the other development partners could not agree to have IDA guidelines governing the pooled funding arrangement. The delay in funds flow and the ineligible expenses could have been mitigated with a clear agreement on the funds flow, beyond the overarching aspirations of donor harmonization. Page 33 of 62 The World Bank Mozambique -Roads and Bridges Management and Maintenance Program - Phase II (P083325) 99. Introduction of new methodologies and approaches should be accompanied by the required resourcing to enable effective learning and capacity building. The introduction of OPRC under DBT was new to Mozambique. However, it was successfully implemented because of the steps taken to ensure focus and effective learning. The establishment of a flood response team, a firm to provide technical assistance (transport support group) and additional supervision support and deployment of oversight in the field. This established a cycle of learning that ensures project delivery. 100. Project design should build flexibility according to the specific context. While the APL-II provided for a flexible approach to project delivery, the occurrence of flooding events led to additional financing and the incorporation of a component for emergency response. Though this provision was not triggered during the project, it showed how a greater degree of flexibility in the deployment of funds could be integrated into projects right at inception. 101. Project designs should ensure that local regulations are accounted for during project preparation and negotiated prior to project approval. For example, the approval of contracts by the Administrative Tribunal was a case where the local regulation was being implemented at variance with the Financing Agreement. This has been reported during the implementation of APL1, and government had undertaken to exercise greater oversight on the procedures to ensure that procurement is not delayed. However, this assurance did not materialize. Given that in many countries, officials do not want to be seen as flouting the regulations, such provisions that could have an impact on the project will need to be identified during project appraisal and negotiated as part of the FA. . Page 34 of 62 The World Bank Mozambique -Roads and Bridges Management and Maintenance Program - Phase II (P083325) ANNEX 1. RESULTS FRAMEWORK AND KEY OUTPUTS A. RESULTS INDICATORS A.1 PDO Indicators Objective/Outcome: Improve access to all-season roads through maintenance, rehabilitation and upgrading Formally Revised Actual Achieved at Indicator Name Unit of Measure Baseline Original Target Target Completion Roads in good and fair Percentage 64.00 77.00 71.00 72.00 condition as a share of total classified roads 28-Jun-2007 01-Jul-2011 31-Dec-2018 31-Dec-2018 Comments (achievements against targets): The original target was revised downwards during the various restructuring, due to unforeseen disruptions in the network caused by flooding events. The revised target was fully achieved. Formally Revised Actual Achieved at Indicator Name Unit of Measure Baseline Original Target Target Completion Share of rural population Percentage 11.00 17.00 40.00 29.30 with access to an all-season road 30-Jun-2007 01-Jul-2011 31-Dec-2018 31-Dec-2018 Page 35 of 62 The World Bank Mozambique -Roads and Bridges Management and Maintenance Program - Phase II (P083325) Comments (achievements against targets): The original target was revised upwards during the various restructuring, to reflect overall efforts by government to restore access to the rural population. The target was partially achieved as of December 2015. Further measurements were pending a revision of the methodology, this was not updated till project closure. Formally Revised Actual Achieved at Indicator Name Unit of Measure Baseline Original Target Target Completion Direct project beneficiaries Number 1500000.00 6600000.00 6100000.00 4660000.00 29-Dec-2006 02-Nov-2012 31-Dec-2018 31-Dec-2018 Female beneficiaries Number 800000.00 2140000.00 3100000.00 2140000.00 Comments (achievements against targets): The target was substantially achieved as of December 31, 2015. Measurement was suspended due to issues related to methodology, and was not carried out again till project closure. A.2 Intermediate Results Indicators Component: Maintenance Page 36 of 62 The World Bank Mozambique -Roads and Bridges Management and Maintenance Program - Phase II (P083325) Formally Revised Actual Achieved at Indicator Name Unit of Measure Baseline Original Target Target Completion Share of planned routine Percentage 60.00 95.00 100.00 77.00 road maintenance performed annually (weighted average 01-Jul-2006 29-Dec-2017 31-Dec-2018 31-Dec-2018 of paved and unpaved roads) The share of planned paved Percentage 54.00 80.00 100.00 80.00 road routine maintenance program achieved annually 01-Jul-2006 29-Dec-2017 31-Dec-2018 31-Dec-2018 The share of planned Percentage 66.00 95.00 100.00 75.00 unpaved road routine maintenance program 01-Jul-2006 29-Dec-2017 31-Dec-2018 31-Dec-2018 achieved annually Comments (achievements against targets): Partially achieved. This a global indicator and the level of achievement reflects the inability of GOM to meet the increasing need for unpaved routine maintenance after the flooding events Component: Limpopo River Basin Emergency Works Formally Revised Actual Achieved at Indicator Name Unit of Measure Baseline Original Target Target Completion Number of Kilometers of Kilometers 0.00 293.00 196.10 196.10 Page 37 of 62 The World Bank Mozambique -Roads and Bridges Management and Maintenance Program - Phase II (P083325) flood damaged roads 31-Dec-2006 12-Dec-2013 31-Dec-2018 31-Dec-2018 rehabilitated in Limpopo province. Comments (achievements against targets): Target achieved. Component: Climate Resilient Rural Road Infrastructure Formally Revised Actual Achieved at Indicator Name Unit of Measure Baseline Original Target Target Completion Establishment/Revision of Text No design standards Revised Design Design Standards Design standards National Design Specification under preparation. Standards Adopted Adopted completed and and standards for paved and adopted unpaved road network 13-Dec-2013 12-Dec-2012 31-Dec-2018 31-Dec-2018 Comments (achievements against targets): Target achieved. Formally Revised Actual Achieved at Indicator Name Unit of Measure Baseline Original Target Target Completion Page 38 of 62 The World Bank Mozambique -Roads and Bridges Management and Maintenance Program - Phase II (P083325) Pilot to reduce weather Text No pilot underway. Pilot completed Pilot completed Pilot completed induced disruptions on selected rural roads in Gaza 31-Dec-2013 12-Dec-2013 31-Dec-2018 31-Dec-2018 Province. Comments (achievements against targets): Target achieved as of December 31, 2018 Page 39 of 62 The World Bank Mozambique -Roads and Bridges Management and Maintenance Program - Phase II (P083325) B. KEY OUTPUTS BY COMPONENT Objective/Outcome 1 Improve access to all-season roads through maintenance, rehabilitation and upgrading 1. Roads in good and fair condition as a share of total classified roads Outcome Indicators 2. Share of rural population with access to an all-season road 3. Direct project beneficiaries 1. Share of planned routine road maintenance performed annually 2. The share of planned paved road routine maintenance program achieved annually 3. The share of planned unpaved road routine maintenance program achieved annually Intermediate Results Indicators 4. Number of Kilometers of flood damaged roads rehabilitated in Limpopo province. 5. Establishment/Revision of National Design Specification and standards for paved and unpaved road network 6. Pilot to reduce weather induced disruptions on selected rural roads in Gaza Province. 1. Jardim-Benfica section (7.2km) and Xai-Xai Chissibuca section (96km) of the N1 rehabilitated Key Outputs by Component 2. Immediate emergency works on 536 km of roads in the Gaza (linked to the achievement of the Objective/Outcome 1) District as follows: Length Lot Road (km) Page 40 of 62 The World Bank Mozambique -Roads and Bridges Management and Maintenance Program - Phase II (P083325) Unclassified Road: Xai-Xai- 1. 13 Chilaulene Regional Road R441: Chinhacanine- 2. 64 Nalazi 3. Unclassified Road: Ndonga-Ndindiza 54 Unclassified Road: Mohambe- 4. 54.7 Maqueze National Road N222: Zinhane- 5. 47 Maxaila 6. National Road N222: Mapai-Maxaila 62 Regional Roads 7. R441: Maxaila-Massangena 144 R456: Massangena-Mavue Regional Roads R443: Manjacaze-Macuácua 8. 97 R450: Malehice-Manjacaze R450: Manjacaze-Chidenguele 3. Medium-term restoration/rehabilitation 198.1km of roads affected by the 2013 floods sections in Gaza Province contracted under DBT principles using OPRC Contract methodology. These were pilot projects selected to Lo Length Road t (km) 1 N220: Chissano-Chibuto 39.2 57.2 Page 41 of 62 The World Bank Mozambique -Roads and Bridges Management and Maintenance Program - Phase II (P083325) NC: Crz N1 (3 de Fevereiro)-Crz N220 18 2 N221: Chibuto-Guijá 60.2 60.2 R890: Chókwè-Guijá 4.5 29.7 3 R448: Chókwè-Macarretane 25.2 R454: Mapapa-Chilembene 17 51.0 4 R859: Chilembene-Maniquenique 34 Total 198.1 4. Pilot Projects for building climate resilience into the lower Limpopo road network in Gaza Province. Lo Length Road t (km) 1. R441: Chinhacanine-Nalazi 63 2. NC: Mohambe-Maqueze 53 3. R852: Maqueze-Nalazi 37 4. N221: Chinhacanine-Mohambe 112 Total 265 5. Paved Road Network condition survey. 6. National Technical Design Standards and Specifications for Climate Resilient Roads. 7. Production of a Digital Terrain Model of the Limpopo River via LIDAR Survey. 8. 25 portable weighbridges procured and deployed across the network. Page 42 of 62 The World Bank Mozambique -Roads and Bridges Management and Maintenance Program - Phase II (P083325) 9. The supply and installation of a weighbridge in Macia along the road N1 in Gaza Province. 10. Assessing Climate Vulnerability and Identifying options for Building Climate Resilience into the Lower Limpopo network. Page 43 of 62 The World Bank Mozambique -Roads and Bridges Management and Maintenance Program - Phase II (P083325) ANNEX 2. BANK LENDING AND IMPLEMENTATION SUPPORT/SUPERVISION A. TASK TEAM MEMBERS Name Role Preparation Supervision/ICR Kulwinder Singh Rao Task Team Leader(s) Amos Martinho Malate, Antonio Laquene Chamuco Procurement Specialist(s) Eldio Venancio Mapoissa Financial Management Specialist Maria Isabel Nhassengo-Massingue Team Member John Bryant Collier Environmental Specialist Nigel Ross Hughes Team Member Desta Wolde Woldearegay Team Member Atsushi Iimi Team Member Damon C. Luciano Team Member Karla Gonzalez Carvajal Team Member Satoshi Ogita Team Member Sofia De Abreu Ferreira Counsel Mugambi Mugisha Mwendia Team Member Angela Alice Dengo Team Member Fatima Arroyo Arroyo Team Member Maria Do Socorro Alves Da Cunha Social Specialist B. STAFF TIME AND COST Staff Time and Cost Stage of Project Cycle No. of staff weeks US$ (including travel and consultant costs) Preparation FY05 5.075 36,280.08 Page 44 of 62 The World Bank Mozambique -Roads and Bridges Management and Maintenance Program - Phase II (P083325) FY06 30.830 215,490.68 FY07 50.569 238,751.60 FY08 0 2.40 Total 86.47 490,524.76 Supervision/ICR FY08 15.104 67,415.05 FY09 28.342 102,548.87 FY10 26.031 131,457.85 FY11 23.376 115,596.85 FY12 22.255 145,977.19 FY13 26.997 127,798.37 FY14 8.718 133,079.48 FY15 28.504 260,628.45 FY16 20.707 270,824.38 FY17 18.060 149,865.89 FY18 36.274 325,670.86 FY19 28.519 270,589.57 FY20 2.075 5,299.55 Total 284.96 2,106,752.36 Page 45 of 62 The World Bank Mozambique -Roads and Bridges Management and Maintenance Program - Phase II (P083325) ANNEX 3. PROJECT COST BY COMPONENT Amount at Approval Actual at Project Percentage of Approval Components (US$M) Closing (US$M) (US$M) OVERHEAD 21.7 38.6 178% MAINTENANCE 36.73 30.8 84% INVESTMENTS 86.9 86.9 100% LIMPOPO RIVER BASIN 121.0 91% EMERGENCY WORKS 109.8 CLIMATE RESILIENT RURAL ROAD 15.75 93% 14.63 INFRASTRUCTURE IMMEDIATE RESPONSE 0 0 0% CONTINGENCY FUND Total 282.08 280.73 93% Page 46 of 62 The World Bank Mozambique -Roads and Bridges Management and Maintenance Program - Phase II (P083325) ANNEX 4. EFFICIENCY ANALYSIS Introduction 1. At appraisal, an economic evaluation was carried out on the three main interventions planned under the RBMMPII over the course of the project life. These were the N1 Roads (Jardim Benfica and Xai-Xai – Chissibuca which utilized the HDM model and the Medium-term Restoration works under the which utilized the RED Model. 2. The results of the economic analysis at appraisal is presented below: Table 4.1: Economic Evaluation Summary Appraisal Appraisal Economic Road Name Financial Analysis Costs NPV at 12% EIRR Additional Lot 1: Jardim - Benfica 28.900 69.100 53.8 Financing 1 Lot 2: Xai-Xai Chissibuca 59.300 23.100 17.6 N1 Roads Additional N/C: 3 de 5.070 30 Financing 3 3.67 Fevereiro/CrzN220 Medium- R454-Mapapa/Chilembene 10.34 3.429 24 term R859: 6.835 30 Restoration 8.43 Chilembene/Maniquenique works R890: Chókwè/Guijá 1.66 2.791 34 R448: 17.082 44 6.31 Chókwè/Macarretane N220: Chissano/Chibuto 31.08 17.116 27 N221-Chibuto /Guijá 57.7 35.425 34 Methodology 3. At completion, the economic viability of the project is reassessed to compare them to appraisal estimates. The evaluation followed the same approach as the ex-ante economic analysis in assessing road user benefits and the cost of investments. The main benefit of the investment is the reduction in road user costs both in terms of vehicle operating costs and passenger travel times. The HDM-4 Version 2 calibrated for local conditions was the analytical tool used in performing the analysis. The analysis is based on a 20- year life cycle and a pavement design life of 20 years and was carried out separately for the roads selected for the two road works sub-components. The economic costs are estimated at 80% of financial costs. 4. Economic benefits are derived from vehicle operating cost savings mainly reduction in fuel consumption and maintenance costs, as well as reduction in travel time of passengers and freight Page 47 of 62 The World Bank Mozambique -Roads and Bridges Management and Maintenance Program - Phase II (P083325) which is converted into monetary terms and added as economic benefits. In the simulation model, of HDM-4 these benefits are calculated as the difference in transport costs between a with-project scenario and without-project scenario (base case). In the absence of other interventions, the economic benefits are attributed entirely to the “with-project” scenario. 5. The economic evaluation which was conducted for the road sections were based on the following project alternatives as shown in Table 4.2: Table 4.2: Investment Alternatives for the various interventions Alternatives Road Section Description Additional With Routine Maintenance Financing 1 Investment Lot 1: Jardim - Benfica Double reseal in year 2022 N1 Roads Routine Maintenance Lot 2: Xai-Xai Chissibuca Single reseal in years 2018 and 2026 Without This alternative comprises Investment routine maintenance (pothole (Base Case) patching) only on the existing road prior to rehabilitation Additional With N/C: 3 de Resurfacing or treatment of Financing 3 Investment Fevereiro/CrzN220 existing roadway, surface Medium- patching and restoration of term culvert Restoration R454-Mapapa/Chilembene Major re-gravelling, ripping, re- works compaction and drainage improvement R859: Major re-gravelling, ripping, re- Chilembene/Maniquenique compaction, localized repairs, edge breaks repairs and drainage improvement R890: Chókwè/Guijá Reconstruction of drainage structures and fills of the embankment. Full re-gravelling and compaction R448: Resurfacing or treatment of Chókwè/Macarretane existing roadway, surface patching and localized repairs N220: Chissano/Chibuto Major re-gravelling, fill of erosions, resurfacing or treatment of existing roadway, Page 48 of 62 The World Bank Mozambique -Roads and Bridges Management and Maintenance Program - Phase II (P083325) surface patching, shape correction, restoration of skid resistance, installation of new culverts and box culvert. Fill of abutments, reconstruction of bridges N221-Chibuto /Guijá Major re-gravelling, fill of erosions, resurfacing or treatment of existing roadway, reconstruction of abutments and reconstruction of the bridge Without This alternative comprises basic Investment repairs to restore transit-ability (Base Case) Summary of results 6. Table 4.3 shows a summary of the results and economic benefits for the respective interventions based on the investment alternatives adopted: Table 4.3 Summary of Ex Post Economic Analysis Lot Road Name Length Cost NPV EIRR AADT Cost/Km (km) (US$m) (US$m) (%) (Veh/day) (US$m/km) 1 Jardim - Benfica 7.0 18.148 23.722 26.4 2019 2.97 2 Xai-Xai Chissibuca 95.0 68.892 108.68 56.1 1467 0.72 1 N/C: 3 de Fevereiro- 17.68 7.32 12.26 30 471 0.15 CrzN220 2 R454-Mapapa-Chilembene 17.24 2.86 232.69 24 459 0.13 3 R859: Chilembene- 34 8.59 1.185 30 429 0.40 Maniquenique 4 R890: Chókwè-Guijá 3.36 3.13 0.906 34 1062 0.42 5 R448: Chókwè/Macarretane 25.26 9.39 2.624 44 987 0.40 6 N220: Chissano-Chibuto 39.09 21.9 2.106 27 903 0.15 7 N221-Chibuto-Guijá 59.56 36.5 6.049 34 909 0.13 Comparison of Economic Evaluations 7. A comparison of the combined economic evaluations based on aggregated NPV and IRR values is provided in Table 4.4 below with concluding remarks. Page 49 of 62 The World Bank Mozambique -Roads and Bridges Management and Maintenance Program - Phase II (P083325) Table 4.4 Economic Evaluation Summary Ex-Ante Ex-post Lot Road Name NPV EIRR (%) NPV EIRR (%) (US$m) (US$m) N1 Roads 1 Jardim - Benfica 69.100 53.8 53.722 36.4 2 Xai-Xai Chissibuca 23.100 17.6 36.22 28.1 Gaza Province Roads 1 N/C: 3 de Fevereiro/CrzN220 5.070 30 12.26 12 2 R454-Mapapa/Chilembene 3.429 24 22.69 18 3 R859: Chilembene/Maniquenique 6.835 30 1.185 22 4 R890: Chókwè/Guijá 2.791 34 0.906 34 5 R448: Chókwè/Macarretane 17.082 44 2.624 33 6 N220: Chissano/Chibuto 17.116 27 2.106 20 7 N221-Chibuto /Guijá 35.425 34 6.049 25 8. Overall it is seen that for all road sections under the different interventions the EIRRs were generally above the discount rate of 12% and as such the interventions were economically justifiable, as predicted during appraisal. Page 50 of 62 The World Bank Mozambique -Roads and Bridges Management and Maintenance Program - Phase II (P083325) ANNEX 5. REVIEW OF THE PERFORMANCE OF THE MOZAMBIQUE ROADS AND BRIDGES MANAGEMENT AND MAINTENANCE PROGRAM Background 1. In August 1998, the government of Mozambique (GoM) announced its road policy and strategy, which gave priority to improving roads, expanding links to agricultural areas, securing access to ports, and upgrading corridors to neighboring countries. It also emphasized the need for: (i) providing sufficient resources for undertaking annual road maintenance regularly; (ii) decentralizing both management and decision making; (iii) strengthening institutions responsible for the management of the road network; (iv) promoting use of local resources in road works; and (v) incorporating social issues, such as road safety, HIV/AIDS prevention, and poverty reduction, into road programs. 2. The first goal of the GoM’s roads sector strategy was to improve the north-south National Road N1 that runs from Maputo to Nampula and farther to Pemba. This road is critical to strengthen national unity, promote internal commerce, and improve access to major social, political, and commercial centers by significantly reducing travel times. The national road N1 was and still remains the spine of the country’s transportation system. For Mozambique’s economy, it is essential to keep the N1 in traffic-worthy condition. The second goal of the GoM’s roads sector strategy was to ensure secure and continuous connection of all provincial capitals to National Road N1. With regard to the secondary road network, the government's priorities were to maintain and rehabilitate only those roads that were economically viable or that served social objectives. 3. The main issues that needed to be addressed in the roads sector are summarized as follows: • Improving the coverage and condition of the roads network • Connecting agriculturally productive areas to the rest of the country through improvements in the road network • Strengthening capacity to manage roads sector activities effectively, sustainably, and transparently, at central and local levels • Ensuring the sufficient, timely, and stable flow of funds for roads maintenance, and establishing policies and processes for reviewing and adjusting funding sources for road maintenance • Involving road users in setting road priorities and in monitoring and evaluating the roads program • Decentralizing responsibilities to the regional institutions best able to bear them, and ensuring the accountability and transparency of these institutions • Fostering the development of the national road construction industry, and finding the appropriate balance between the public and private sectors in the roads sector • Improving roads safety, and • Reducing the spread of HIV/AIDS that is associated with improved road networks Page 51 of 62 The World Bank Mozambique -Roads and Bridges Management and Maintenance Program - Phase II (P083325) 4. Consequently, an adaptable Program Lending APL was designed by IDA in three phases to support the Governments Road Sector Program 2001-2011 at an estimated cost of US$1.7 billion (IDA contribution, US$432 million). The APLs were planned to be implemented as follows: APL1 – 4 years (2000-2005), APL2 – 3 years (2005-2008) and APL3- 3 years (2008-2011). 5. It must be noted that during 2006, in close collaboration with road sector Development Partners (DPs), the Government of Mozambique (GoM) developed PRISE, the 2007-2009 Integrated Road Sector Program. PRISE is based on the 2007-11 Road Sector Strategy (RSS) and the Road Sector Policy. The Road Sector Strategy is an update of the 2001-2011 Roads and Bridges Management and Maintenance Program (RBMMP). Since then, there have been several follow up programs updating the PRISE. However, Bank support was eventually materialized through 2 APLS, APL 2001-2005 and APL2 from 2007-2018. The third phase of the APL was under preparation during APL2 but was curtailed when the emergency works to respond the occurrence of floods emerged. Each phase of the MZ-RBMMP had the following primary focus: (a) RBMMP-I - July 2001 to June 2005. Support to (i) improving the coverage and conditions of roads and bridges in the territory of the Borrower; (ii) strengthening the Borrower’s institutional capacity to manage and administer the road sector; (iii) establishing financing mechanisms for roads maintenance; (iv) promoting the use of local resources in roads construction and management; and (v) improving road transport safety. (b) RBMMPII – June 2007 to December 2018. Support the continued rehabilitation and upgrade of the main national road N1 and contribute to the program through a pooled financing arrangement with GoM and other DPs. This was to enable GoM to carry out a sustainable road maintenance program with particular emphasis on periodic maintenance of paved roads, while at the same time increasing the capacity of the implementing agencies. 6. Financing. The RBMMP has been financed from its inception from domestic sources and significant contributions from the donor community. Table 7.1 presents the contributions of the different financiers of the RBMMP/PRISE as of 2018. The relatively high level of financial support by the donor community, particularly during the early phases of the RBMMP, was the result of the strong commitment of the GoM to the Road Sector Development Program and agreement to an implementation framework that included strong donor coordination and mutually agreed program objectives. Page 52 of 62 The World Bank Mozambique -Roads and Bridges Management and Maintenance Program - Phase II (P083325) Table 7. 1. RBMMP - Disbursements by Financiers (2001–2018) (US$, millions) Financier Planned Amount Disbursement Percentage (%) GoM (RF) 1,743,000,000.00 2,053,909,186.58 118% External resources 2,372,000,000.00 2,270,640,088.47 96% grants 640,400,000.00 433,000,985.75 68% Pooled fund 263,400,000.00 8,708,441.00 3% ASDI 50,000,000.00 56,116,412.38 112% SUÉCIA 68,000,000.00 46,570,123.02 68% DANIDA 10,000,000.00 46,004,684.91 460% DFID 20,000,000.00 28,639,902.35 143% EU 186,000,000.00 197,781,534.46 106% AFD 1,000,000.00 2,540,000.00 254% NDF 9,000,000.00 11,631,467.13 129% KFW 12,000,000.00 14,506,271.06 121% ITALIA 19,000,000.00 19,081,134.87 100% NORAD 2,000,000.00 3,961,014.58 198% Concessional loan 581,200,000.00 592,382,926.57 102% BADEA 200,000.00 205,984.91 103% World Bank 465,000,000.00 374,209,922.88 80% JICA 75,000,000.00 170,815,357.03 228% JBIC 20,000,000.00 23,837,287.00 119% BID 8,000,000.00 7,499,055.74 94% IFAD 1,500,000.00 2,171,560.36 145% OPEC 4,000,000.00 4,900,564.52 123% PROMER 4,000,000.00 4,567,697.22 114% Propesca 3,500,000.00 4,175,496.91 119% Non-Concessional Loan 1,150,400,000.00 1,039,477,749.09 90% KOREA 35,000,000.00 38,525,191.25 110% CHINA 600,000,000.00 508,660,482.74 85% INDIA 15,000,000.00 14,500,538.17 97% JINDAL 400,000.00 339,545.77 85% PORTUGAL 500,000,000.00 477,451,991.16 95% Total (Internal + External) 4,115,000,000.00 4,324,549,275.05 105% Source: PRISE Reports 2001-2018, RF and ANE. IDA Support to RBMMP/PRISE The Roads and Bridges Maintenance and Management Project APL1 7. IDA’s first support to the RBMMP and later PRISE was through the Road and Bridges Maintenance and Management Project APL1 a credit of US$100 million which was approved on July 19, 2001. Page 53 of 62 The World Bank Mozambique -Roads and Bridges Management and Maintenance Program - Phase II (P083325) 9. Its primary aim was The specific APL1 objectives were to (a) improve the coverage and condition of roads and bridges; (b) strengthen the country's capacity to manage and administer the road sector effectively and transparently, with efficient and sustainable institutional arrangements; (c) establish financing mechanisms to ensure sufficient, timely, stable and secure flow of funds for roads maintenance, affordable at the macroeconomic level and for the road users; and (d) improve road transport safety. Secondary objectives are to help prevent the spread of AIDS and encourage employment of women in the roads sector. 10. Key performance indicators include measures of improved road coverage and quality, such as size of the maintainable network, kilometers of roads under periodic maintenance, kilometers rehabilitated, traffic volumes, truck freight rates, and percentage of roads in fair or good condition. They include indicators of improved roads sector policies and management, such as implementation of institutional reforms intended to improve roads management; installation of new financial management systems for Administracao Nacional de Estradas (ANE), the Road Fund; and periodic transfer of required amounts to the Road Fund. They include management benchmarks, such as the time for tendering, contracting road works and payment to contractors; and the percentage of works completed on time and within budget. Finally, they include measures of social impacts, such as decreases in number and severity of accidents per vehicle kilometer traveled, increase in HIV/AIDS awareness of people working on and living near roads included in the program, and number of women workers employed by the program. 11. The major achievement of the APL1 was the rehabilitation of 751 km of rehabilitation and periodic maintenance works on the National Road N1, and 76 km of rural roads. Institutional studies aimed at strengthening were completed. The RF is now a separate entity from the ANE, with its own management and board of directors, with representation from the private sector. The RF also established its own FM system and is subject to financial and technical audits. Increased RF revenues from road user charges, financing routine maintenance and the regularity of transferring funds to the RF significantly improved. ANE also succeeded in testing and specifying the use of local materials that are expected to lead to substantial cost savings in the road sector. APL Programmatic Objectives, Triggers, and Project Stage Objectives 11. Programmatic objectives. The primary objective of the overall Roads and Bridges Management and Maintenance Program (RBMMP), was to stimulate growth and contribute to poverty reduction through improved road infrastructure, better sector policies, and enhanced roads sector management. More specifically by (i) improving the coverage and conditions of roads and bridges in the territory of the Recipient; (ii) strengthening the Recipient’s institutional capacity to manage and administer the road sector; (iii) establishing financing mechanisms for road maintenance; (iv) promoting the use of local resources in roads construction and management; and (v) improving road transport safety 12. Performance triggers. The APL financing mechanism required that to have the subsequent operation approved a set of ‘triggers’ should be met. The triggers (table 7.2) were agreed between the GOE and the World Bank during the appraisal of APL1. Each of the projects met the ‘triggers’ before commencement. Page 54 of 62 The World Bank Mozambique -Roads and Bridges Management and Maintenance Program - Phase II (P083325) Table 7.2: Performance Triggers for Each Stage of the APLs Stage Trigger/Indicator APL2 1. Agreed phase one road works have been substantially completed and performance indicators satisfactorily achieved. 2. The Road Fund is made a separate legal entity from ANE. 3. A Road Board is established and functioning one year prior to phase 1 closing. 4. Financial management of ANE and the Road Fund is satisfactory as assessed by financial and technical audits 5. Government has timely provided agreed level of funds to the Road Fund and for counterpart funds. 6. Satisfactory implementation of the road safety plan. 7. Satisfactory implementation of HIV/AIDS prevention measures in roads sector. 8. Satisfactory completion of all preparatory activities (engineering designs and tender documents for first set of phase two investments completed, environmental impact assessment and social impact assessment for phase two investments completed). APL3 1. Agreed phase two road works have been substantially completed and performance indicators satisfactorily achieved 2. Financial management of ANE and the Road Fund is satisfactory 3. Government has timely provided agreed level of funds to the Road Fund and for counterpart funds 4. Satisfactory implementation of the road safety plan 5. Satisfactory implementation of HIV/A1DS prevention measures in the sector 6. Satisfactory completion of all preparatory activities. Overview of Activities under the APL Program Objective: The overall purpose of the RBMMP is to stimulate economic growth and contribute to poverty reduction through improved road infrastructure, better sector policies, and enhanced roads sector management. Improved road transportation helps generate growth and reduce poverty by lowering transportation costs and stimulating development of markets. This encourages farmers to increase production and provides them with opportunities to do so by making it easier to obtain inputs and sell outputs. Improved road transportation also makes it simpler for people to go to school, visit health facilities and travel to jobs in nonagricultural sectors. In the case of Mozambique, road improvements bring about national integration, social equity and political unity by helping to integrate the poor and other vulnerable groups into the society. They also place the country in a critical strategic role as the transport provider for neighboring landlocked countries, while opening external markets for trade. Page 55 of 62 The World Bank Mozambique -Roads and Bridges Management and Maintenance Program - Phase II (P083325) Project Objectives. Each operation of the APL had the following specific objectives: APL1 (P001785). To (a) improve the coverage and condition of roads and bridges; (b) strengthen the country's capacity to manage and administer the road sector effectively and transparently, with efficient and sustainable institutional arrangements; (c) establish financing mechanisms to ensure sufficient, timely, stable and secure flow of funds for roads maintenance, affordable at the macroeconomic level and for the road users; and (d) improve road transport safety. Secondary objectives are to help prevent the spread of AIDS and encourage employment of women in the roads sector. APL2 (P083325). To improve access of the population to all-season roads through maintenance, rehabilitation and upgrading of the classified road network. Project components. The specific components are outlined in table 7.3. It is noted that there is a strong linkage between the activities of the two APLs, in spite of the fact that under APL2 substantial emphasis was on emergency restoration works to rebuild the road network. Table 7.3. Description of Components in APL Phases Component Phase/Component Description APL1 APL2 Component 1 Roads and bridges works Overheads: (1) roads routine maintenance, (i)Administrative costs: Support to (2) roads periodic maintenance the RF and ANE, at national and (3) roads rehabilitation provincial levels, to strengthen (4) rural roads civil works their administrative capacity (5) emergency works (b) Capacity building: (6) road safety and Strengthening the technical (7) engineering services for road capacity of the Project works. Implementing Entity, ANE, and the Recipient's ministry of public works and housing through: (i) the provision of technical assistance in the areas of: (a) financial management; (b) procurement and contract management; (c) control systems; (d) information technology; (d) road management and maintenance; and (f) training to national and provincial staff; and (ii) the carrying out of studies on: (a) national and provincial roads strategies, plans and budgets; (b) financial, technical, and procurement audits, including methods to strengthen financial Page 56 of 62 The World Bank Mozambique -Roads and Bridges Management and Maintenance Program - Phase II (P083325) management and procedures for the processing of internal financial audits; (c) highway information and management systems; (d) climate resilience in road design and maintenance; and (e) financial management systems. (iii) Road Safety Program (a) Carrying out of safety related civil works on the road network. (b) Development of a road safety data management system. Component 2 Policy reforms institutional Maintenance: strengthening routine and periodic maintenance of the paved and unpaved road network, including road markings. Component 3 Strategy formulation and Investments: preparatory activities a) Rehabilitation of the Jardim- Benfica and Xai-Xai-Chissibuca sections of the N1 road (b) Engineering Services: Provision of consultants' services for: (i) the supervision of the civil works referred to in (a) ; (ii) the supervision of the civil works to rehabilitate the Massinga to Nhachengue; and (iii) the design of engineering plans to ensure the Project's sustainability. Component 4 Emergency related works in the Limpopo River Basin a) Immediate Emergency Works: spot interventions. (b) Medium-term Restoration/ Rehabilitation Works under Design and Build (DBT) methodology using Output and Performance Based (OPRC) Component 5 Program for Climate Resilient Rural Road Infrastructure (a) Development of: (i) national technical design standards and specifications for climate resilient roads and (ii) development of Page 57 of 62 The World Bank Mozambique -Roads and Bridges Management and Maintenance Program - Phase II (P083325) technical standards and maintenance approaches for paved and unpaved classified road network to include capacity- building programs for local contractors and service providers. (b) Piloting of climate resilient road designs, including the development and piloting of improved maintenance approaches to include capacity building programs for local contractors and service providers. Component 6 Immediate Response Contingency Fund Establishment of an immediate response mechanism to facilitate rapid financing for disaster response in the aftermath of a national disaster to be triggered through a formal declaration of national or regional state of emergency by the Borrower Credit Amount 100 271 16. Key indicators and M&E. Each phase of the program (APL1 & APL2) had its indicators that were independently reviewed after completion. However, the program itself was monitored by a total of 21 indicators (Performance Assessment Framework) to assess the performance of the sector. Over time, the list of indicators had been reduced to eight. Outputs from the APL Operations 17. Accomplishments under RBMMP. Before presenting outputs from the APL operations, it is important to put these against the background of the outputs from the RBMMP/PRISE to date. Table 7.4 presents a summary of the physical outputs from the RBMMP/PRISE over its 18 years of implementation (2001–2018). It also shows the level of financing used to achieve the indicated outputs. 18. Overall impact of investment under the Road Sector Development Program on the road network. The cumulative impact of implementation of the RBMMP on Mozambique’s road work over its 18 years of implementation is shown in table 7.4. Page 58 of 62 The World Bank Mozambique -Roads and Bridges Management and Maintenance Program - Phase II (P083325) Table 7.4. Road Sector Development Program Impact Length/km Financing Activity Planned Achieved % Planned Achieved % Rehabilitation/Upgrading Rehabilitation of national roads 2,908 1,712 59% 2,326 1,455 63% Upgrading of National Roads 5,440 1,566 29% 996 274 28% Rehabilitation of Regional Roads 1,720 1,786 104% 313 536 171% Upgrading of Regional Roads 672 454 68% 121 68 56% Periodic Maintenance Paved Roads 24,054 18,168 76% 200.00 175.00 88% Unpaved Roads 61,996 51,638 83% 3,100 2,840 92% Roads Routine Maintenance Paved Roads 93,924 53,925 57% 42,266 24,266 57% Unpaved Roads 38,010 32,443 85% 13,304 9,733 73% Spot improvements 10,142 6,061 60% 4,057 3,031 75% Consolidated IDA APL1 and APL2 Performance and Result Monitoring 19. Ratings summary. The performance rating for each of the operations from their respective ICR is shown in Table 7.5: Table 7.5. Key Ratings of the APLs Item APL1 APL2 Outcomes Satisfactory Moderately satisfactory Risk to development Moderate n/a outcomes World Bank performance Satisfactory Moderately Satisfactory Borrower performance Satisfactory n/a Overview of Lessons from Implementation of the APL 32. A review of all the lessons identified by the ICRs of APL1 reveals that, generally, the identified lessons were addressed in the follow-up APL. The APL series provided useful lessons to improve RF and ANE operations, including the lessons on technical, safeguards, M&E, procurement, and overall project management. These are well documented in this ICR as well as the ICR for APL1. 33. An assessment of institutional capacity of ANE and RF, and the development of work programs that can be delivered successfully using agreed on time schedules was recommended to reduce implementation delays. Due attention also needs to be paid to the commercial environment to ensure that the works are appropriately budgeted for. An appropriate organizational structure, in line with modern road management principles, is needed both at ANE headquarters and at provincial levels to avoid long bureaucratic procedures for signing contracts with foreign companies. Research on the use of local building materials has made some gains and should Page 59 of 62 The World Bank Mozambique -Roads and Bridges Management and Maintenance Program - Phase II (P083325) continue to ensure quality of road construction. The setting up the highway management system is required to ensure sound planning, management, and implementation of road maintenance programs are technically sound. Technical assistance should be maximized to ensure that it has more impact on strengthening the management and technical capacity of ANE. Setting up of a dedicated Social Unit within a Road Agency has been found effective in coordinating with partners and other agencies to address social issues in road projects such as HIV/AID prevention, poverty reduction, and gender equality. Client role is critical to ensure donor collaboration on sector programs to take lead at the project design stage in setting out the detailed implementation arrangements to ensure harmonization of the related procedures. The appropriate design of a monitoring and assessment framework with a time-based action plan for data collection, and appropriate staffing to collect, analyze and report on the data is critical for decision making on the sector. Page 60 of 62 The World Bank Mozambique -Roads and Bridges Management and Maintenance Program - Phase II (P083325) ANNEX 6. BORROWER, CO-FINANCIER AND OTHER PARTNER/STAKEHOLDER COMMENTS Page 61 of 62