PROJECT INFORMATION DOCUMENT (PID) ADDITIONAL FINANCING Report No.: 82536 rev Project Name Additional Finance, Road Maintenance and Rehabilitation Project, Phase 2 (P145120) Parent Project Name Road Maintenance and Rehabilitation Project, Phase 2 (P119471) Region EAST ASIA AND PACIFIC Country Papua New Guinea Sector(s) Roads and Highways (100%) Theme(s) Rural Services & Infrastructure (70%); Trade Facilitation and Market Access (20%); Gender (10%) Lending Instrument Investment Project Financing (IPF) Project ID P145120 Parent Project ID P119471 Borrower(s) Independent State of Papua New Guinea Implementing Agency Department of Works and Implementation Environmental Category B (Partial Assessment) Date PID Prepared/Updated December 19, 2013 Date of Appraisal Completion November 8, 2013 Estimated Date of Board February 28, 2014 Approval I. Project Context Country Context PNG faces the key challenge of leveraging its good macroeconomic performance and extractive industry revenues to improve the living standards of its population. Maternal mortality rates are high by world standards, and the country’s lack of good infrastructure facilities is a widely recognized constraint to continued economic development and delivery of services. Sectoral and Institutional Context Although there are around 30,000 km of roads throughout PNG, these consist of eight separate, unconnected networks that do not provide adequate nationwide, and in some instances, inter-provincial, connections. While the extent and condition of roads have improved over the last decade due to sustained assistance from several donors, less than 35 percent of national roads are considered to be in good condition, and thousands of kilometers of the secondary network have not been maintained for years. The condition of the country’s road infrastructure can be explained by the combination of: (i) PNG’s challenging physical environment and climatic conditions;1 (ii) scattered and dispersed settlement 1 PNG’s topography is typically characterized by coastal plains and steep mountainous terrain. Its warm climate and heavy rainfalls concentrated in short periods of time bring floods and landslides, and aggressive plant growth, if not controlled, quickly compromises road drainage systems and results in rapid surface deterioration. patterns resulting in long distances between population centers; (iii) long periods of funding constraints for maintenance activities; (iv) weak institutional and management capacity; and (v) the limited availability of able local and international private contractors. The Department of Works and Implementation (DoW) is responsible for the national road network, which consists of around 9,600 kms, while 22 provinces and 89 districts are responsible for the remainder. DoW’s primary responsibilities are to rehabilitate existing roads and construct new ones. DoW also carries out limited routine, periodic, and emergency maintenance activities. The National Roads Authority (NRA), which became operational in 2006, is responsible for maintaining the national road network. NRA takes over national roads after they have been rehabilitated to good condition by the DoW. Currently, the NRA is statutorily responsible for 2,000 km of national roads and this is expected to rise to 4,200 km by 2015. Financing for road maintenance comes from the Road Fund, which is replenished by a levy collected on the sale of locally produced diesel fuel. Since the 1990s, annual funding for road maintenance and restoration has only been about 20 percent of calculated needs, and inadequate maintenance of road sector assets has resulted in significant deterioration over time. As a result, many sections of the paved network have reverted to gravel, creating rough to impassable conditions, particularly during and following rainy seasons. This has contributed to increased travel times and operating costs, and amplified the isolation of local communities. II. Project Development Objectives A. Original Project Development Objectives Parent To: (i) improve road transport to project areas through providing satisfactory physical condition and safety in selected roads; and (ii) strengthen institutional arrangements for road maintenance, including the participation of the private sector and communities. B. Current Project Development Objectives Parent Same as above. C. Proposed Project Development Objectives Additional Financing (AF) To: (i) improve road transport to project areas through providing satisfactory physical condition and safety in selected roads; and (ii) strengthen institutional arrangements for road maintenance, including the participation of the private sector and communities; and (iii) enhance road-related economic opportunities for women. III. Project Description Component Name Component 1: Rehabilitate, Upgrade and/or Maintain Roads and Bridges (est. US$138.65 million). Funding would continue to rehabilitate, upgrade and/or maintain existing national and provincial roads and bridges in some of the ten provinces eligible for funding under the AF.2 However, there would be an emphasis on expanding the benefits to more than Gulf and Central Provinces. Funding would also be used to enhance economic opportunities for women through routine road maintenance activities. Component 2: Technical Assistance (est. US$18.35 million). Technical Assistance would be provided 2 The ten provinces eligible under AF are Central, East New Britain, Gulf, Madang, Manus, Milne Bay, Morobe, Oro, Western, and West New Britain. to: (i) design and supervise specialized works, such as bridges; (ii) pilot an integrated maintenance regime for the Hiritano and/or Magi Highways; (iii) pilot performance-based contracting through initial repairs to roads followed by a maintenance period, including efforts to enhance economic opportunities for women (through wage labor) for maintaining road sector assets; (iv) build DoW and NRA abilities to more effectively manage and maintain road sector assets, and train small- and medium-sized contractors in eligible provinces in preparing tenders and managing contracts; (v) raise awareness of gender issues among stakeholders, as well as provide training on routine road maintenance activities, gender-based violence and HIV/AIDS issues for local communities; (vi) carry out SESs at the beginning, mid-term, and end of the AF to monitor the project’s impact on beneficiary communities, particularly the impact of improved roads on access to services and use of road infrastructure by women; and (vii) support project implementation. Component 3: Contingency for Disaster Risk Response (est. US$0.0 million). This provisional zero cost new component will support preparedness and rapid response to disaster, emergency, and/or catastrophic events, if needed. It will allow rapid reallocation of credit proceeds from other components or projects under streamlined procurement and disbursement procedures, or a mechanism to quickly channel additional funds, should they become available, as a result of an emergency. IV. Financing (in USD million) Total Project Cost: 157.00 Total Bank Financing: 0.00 Total Co-financing: 0.00 Financing Gap: 0.00 Financing Source Amount BORROWER/RECIPIENT 30.50 IDA Credit 126.50 Total: 157.00 V. Implementation Implementation will be carried out by DoW. VI. Safeguard Policies (including public consultation) Safeguard Policies Triggered by the Project Yes No Environmental Assessment OP/BP 4.01 X Natural Habitats OP/BP 4.04 X Forests OP/BP 4.36 X Pest Management OP 4.09 X Physical Cultural Resources OP/BP 4.11 X Indigenous Peoples OP/BP 4.10 X Involuntary Resettlement OP/BP 4.12 X Safety of Dams OP/BP 4.37 X Projects on International Waterways OP/BP 7.50 X Projects in Disputed Areas OP/BP 7.60 X VII. Contacts World Bank Contact: Jim Reichert Title: Sr. Infrastructure Specialist Tel: (612) 9235-6538 Email: jreichert@worldbank.org Borrower/Client/Recipient Name: Department of Treasury Contact: Hon. Don Pomb Polye Title: Minister for Treasury Tel: (675) 312-8817 Implementing Agencies Name: Department of Works Contact: Steven Sapalo Title: Project Director, RMRP II Tel: (675) 324-1482 Email: stevensapalo@works.govpg VIII. 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