| J 4_             r           ec i s                                           <23003
WORLD BANK OPERATIONS EVALUATION DEPARTMENT                    SPRING 2000       NUMBER 199
Ghana
Building a Stronger
Transportation System
T 1 HREE SUCCESSIVE TRANSPORT PROJECTS IN GHANA
contributed to the success of the country's economic
recovery program, according to recent findings by the World
Bank's Operations Evaluation Department (OED). Implemented
between 1987 and 1998, the projects took important steps in rehabili-
tating Ghana's economically important roads and instituted mainte-
nance programs to arrest road deterioration. By removing physical
transport constraints, the projects reduced transport costs, stimulated
exports, and improved the mobility of passengers and goods. Because
the rural population gained better access to markets and socioeconomic
activities, agricultural production and marketing increased and became
more diversified. An increase in commercial transport along improved
feeder roads also made the rural population more mobile.
The projects led directly to strengthened  tariat, has greatly improved cost recovery
institutions and policy reforms-the       and allocation of funds for maintenance.
Ghana Highway Authority (GHA) and         The projects' railway components, how-
Department of Feeder Roads (DFR) now      ever, did not achieve their objectives.
carry out most of their maintenance and   Nevertheless, the Bank's project manage-
rehabilitation work through private con-  ment and policy dialogue with the client
tractors and consultants, and the two     throughout the three projects were exem-
agencies have improved their expenditure  plary and represent "best practice" in the
and work programs. There is now a thriv-    road subsector.
ing local construction and consultancy
industry that uses labor-intensive methods,    The Projects
which has served to alleviate rural pov-  Poor macroeconomic conditions and po-
erty by providing new income-generating   litical instability in the 1970s and 1980s
opportunities. A reformed Road Fund,      led many well-educated Ghanaians to flee    7z Q 
with an autonomous board and secre-       the country. The wages of those who



2                                                                        World Bank Operations EvalLiatioin Departmenit
project designers also planned to
raise the transport sector's effi-
ciency, promote low-cost technol-
ogy to facilitate rural transport,
and reduce transportation costs
for both goods and passengers.
The components were a program
of road and railway rehabilita-
tion and road maintenance, pilot
programs for road and rural
transport, and support for infra-
2                                   ~~~~~~~~~~~~~structure planning and transport
sector institutions. It was imple-
mented in May 1988 and closed
at the end of December 1993.
;W;i;°iisi;j <a ;ff0;ft _ ___f _ Second Transport
X? ts_                                                  Rehabilitation  Project
(TRP II)
A bridge in Ghana. Photo courtesy of World Bank Photo Library.               TRP II, implemented in June
1991 and closed at the end of
December 1997, was designed to remove physical
stayed did not cover their cost of living, and the highly  barriers to export expansion, farm production, and
politicized management system created widespread de-    labor mobility and to reduce transportation costs,
moralization, high absenteeism, and low productivity.   but its design went beyond that of the first project.
By the time the government began its economic recovery  Rehabilitation and maintenance of road and railway
program (ERP) in 1983, import volumes had fallen by a   infrastructure had the additional goal of facilitating
third, real export earnings had fallen 52 percent, and  private sector development. The designers planned to
domestic savings were almost insignificant. The trans-  encourage new methods of infrastructure rehabilita-
port sector had deteriorated badly. Sector institutions  tion and maintenance through the use of appropriate
were deficient in organizational and incentive structures.    technology, local resources, and community transpor-
Years of maintenance neglect and mismanagement had     tation. Planning to improve the efficiency of both
left the road network in such poor condition that it had  public and private sector transport management, the
become a liability to the national economy and hindered  designers intended to promote manpower training,
the effectiveness of the recovery program. Forty-six per-  market-oriented policies, and institutional develop-
cent of the 14,134 kilometers of trunk roads had failed  ment. They also included a design element to alleviate
moderately or severely, and the majority of the 21,000  rural poverty and to improve self-development among
kilometers of feeder roads could not be used at all dur-  rural women.
ing the rainy season.                                      TRP II components included equipment, civil
In 1985, the government and the Bank agreed on      works, and institutional strengthening for roads; insti-
measures to develop a process for short- and medium-    tutional development for the public and private trans-
term repair of Ghana's transport sector facilities, as well    port sectors; and low-cost rural maintenance systems
as to design long-term management and financing solu-   and infrastructure development that emphasized
tions. The first of three projects was approved at the end  women's employment by providing civil works and
of 1987. The objectives were highly relevant to the     institutional support for nongovernmental organiza-
needs of the country, and the concepts embedded in the  tions (NGOs). Like the first project, TRP II had a
projects represent innovative thinking for the time. The  railways component, which was designed to
projects were designed to promote the principles of the  strengthen institutions and improve capacity by pro-
commercial management of roads, increase the capacity   viding locomotives and wagons, equipment and tools,
of the private domestic contracting industry, introduce  and civil works.
labor-based construction methods, and promote interme-
diatemeansofruraltransport.                             National Feeder Roads Rehabilitation  anti
Maintenance  Project (NFRRMP)
First Transport                                         Implemented in July 1992 and closed in June 1997, the     l
Rehabilitation Project (TRP I)                          NFRRMP was designed to do three things: (1) increase
TRP I was designed to help expand exports, farm pro-    food and cash crop production by improving access to
duction, and labor mobility through physical rehabilita-  feeder roads that are used to move agricultural inputs and
tion and maintenance of the transport infrastructure. The  produce to and from farms, villages, and nearby markets;



Precis 199                                                                                                       3
Table 1: Improvement in Road Conditions (percent)
Trutnk roads                                         Feeder roads
Road condition       1989          1997           1989         Maintainable only, 1997       All feeder roads, 1997
Good                   13           18              16                   51                          21
Fair                  20            24              24                   36                           15
Poor                  67            58              61                   13                          64
Note: The 1997 figures for feeder roads are divided by the maintainable network (9,805 kilometers), and the entire feeder road network
(23,605 km), which includes the non-maintainable network (13,800 km).
Souirce: World Bank data. The numbers may not be comparable over the different years because the surveys were done using different standards.
(2) improve mobility and economic opportunity for the      and is providing support to the government to bring
rural poor; and (3) build the institutional capacity of the  the network to 70 percent good condition and 20 per-
DFR to ensure the maintenance of the rehabilitated road    cent fair condition by 2005. Only 13 percent of the
network and to sustain the feeder road network over time.  maintainable feeder road network was in poor condi-
This project had several physical and structural       tion by 1997, although 64 percent of the roads were
components. Five thousand culverts were constructed        still in poor condition because they were not main-
and spot improvements made to 720 kilometers of roads      tainable (table 1).
to provide minimum access, 2,850 kilometers of reha-           All three projects were highly satisfactory in their
bilitated and maintained roads were regravelled, and       support of Ghana's ERP: they removed transport bottle-
2,500 kilometers of roads in 16 areas with high-to-me-     necks, promoted market-oriented reforms, and improved
dium agricultural potential were fully rehabilitated. The  public sector management and resource allocation.
project included the purchase of road maintenance and          When villagers were asked how the projects had
workshop equipment, tools, and spare parts. It also pro-   affected their lives, they said that the arrival of more
vided consultant services for engineering design, con-     vehicles in their villages had made for better move-
tract supervision, an organization and management          ment of their produce and cheaper passenger services.
study and a socioeconomic impact study, and a mainte-      They noted that they could now get better prices for
nance-performance budgeting system. It also trained        their products because they could sell them directly
DFR staff and labor-based contractors and supported a      rather than through intermediaries. Shopkeepers, too,
labor-based training school; provided DFR with manage-     said that the costs of bringing in goods had dropped,
ment, maintenance, and operations assistance; and          while sales had risen. And it was now easier and
helped DFR with decentralization to foster involvement     cheaper to use emergency vehicles when people be-
of local communities in developing and testing a rou-      came ill (table 2).
tine, district-based feeder road maintenance system. It        Through technical assistance and training, reduc-
supported the local contracting industry in equipment      tion in the unskilled labor force, and contracting with
and performance assessment and assisted NGOs               the private sector to carry out civil works, institu-
and women in improving rural mobility and the              tional capacity was substantially enhanced. Ghana
environment.                                                now has a vibrant and well-organized domestic con-
struction and consultancy industry. The GHA and the
Project Outcomes                                           DFR can now manage projects better, plan and priori-
By the projects' end, the danger of trunk road failure     tize road maintenance programs, and rationalize their
was largely averted-but 58 percent of the road net-        expenditure and work programs. Moreover, OED
work remained in poor condition in 1997. The Bank           rated the Bank's performance as satisfactory in the
has established a strong base for further improvement      first two projects, and highly satisfactory for the
Table 2: Impact of Improved Feeder Roads on Transport Cost
Characteristics of feeder roads
Transport cost (cedis)               A                      B                      C                   D *
Freight, 100 kg maize              2.000                  2,000                  3,000                3,000
Shared taxi                        1,200                  1,200                  1,500                1,500
Minibus                            1,000                  1,000                  1,000                1,200
Emergency taxi                 15,000-20,000          20,000-25,000         25,000-30,000         25,000-30,000
Soturce: Village intcrviews.
*Key: A, rehabilitated under N\FRRMP; B, rehabilitated using labor-based methods, and funded by another donor; C, received some spot
improvement through DFR's owVn fund; D, not improved at all, and passable only wvith great difficulty.



feeder roads project in responding to Ghana's eco-
nomic recovery program and its long-term needs. The            Editor-i i    izaet  ap -g
borrower's roads agencies excelled in project imple-           Seis dtor: Caroie McEuen
mentation, took strong ownership, and performed
satisfactorily overall, although the government was             a     Dein K          Strauss
slow to meet the counterpart funding requirements (see             A
table 3 for project summary data).
PRECI~~~~~<S ORE  X: VFORM :XX0y :   <  
Challenges  Ahead                                        . Pc
The Bank has made significant contributions in improv-               s  t  1               o
ing Ghana's transport sector. But four challenges remain  b     t  1
outstanding: contract management, decentralization, the  r       t el
Road Fund, and the failure of the first two projects to   Mi thi form to:
achieve their objectives in the railway subsector.            O         W
Railway trins port188HSre,NW
In retrospect, it is clear that a separate railway project  Wsiton, D.C. 20433   S.A.
would have focused attention more effectively on the
problems facing Ghana's railways, which still suffer     Q                     T                    P         #
from poor physical condition and a deficient organiza-
tional framework. Although the two projects financed
the rehabilitation of some tracks, rolling stock, and
equipment, their effect on the condition and the effi-
ciency of the railway system was negligible.          z   P       ai
Unlike the program for roads, the railway compo-     Ne_          _ _ _ __ _ _ _ _ _
nent lacked a comprehensive and strategic program
for fundamental change in the physical condition and     A    ss___________i_______________________________
institutional configuration of the railway system. The
railways experience suggests that support for organi-    Cit                           S
zational strengthening and improvement is more effec-    P        C        Country
tive when the railway operates in a conducive
institutional environment with appropriate incentive     Teepon
structures. It should also be noted for any future
project that organizational and system improvementseWolBa    foS
need to be accompanied-or preceded-by reforms in        ho at ta
the incentive structure and the institutional environ-  thu   emi atok@odbn.r
ment governing railway operations.                                              b        a  o
( (U? tr'actJ2l??' C?2t                                 hr1lA&tp:/ww.oldan.oghrl/e
Private contractors currently carry out the majority of the  To order o  b    lease contact:
road works in Ghana, which has led to the development of  T   Wr  Bn F l           Center
a thriving domestic construction and consultancy industry,. B   960
But benefits of the public road agencies' contracting out  e       V  0          U.S.A.
with the private sector have not been fully realized; institu-  l:   030
tional weaknesses in the road agencies have interfered with  Fax: 1703/661-1501
the management of contracts and the reduction of the trans-  nere http://www.worldbank.org
action costs involved in obtaining and supervising con-  Fro  the W      B     hmpg  s.
tracts. One such weakness is wage and incentive structures     bo@wotldbank.org
and compensation packages that are not sufficiently com-
petitive to attract and retain the skilled labor force needed  D: O      Pis ar p      ce
to improve institutional capacity to manage contracts.  O          E        D           Pa         a
Many trained engineers and other skilled staff leave the  K        Grou (         O         and D
public sector for positions in private industry, creating an              ire t             thOpertion
imbalance in skills between the contracting agencies and  E    i     f       t a  ndshul      bttrib
private contractors. In addition, the road agencies need to  t
develop an institutional mechanism to make sequential    itors.
adaptations to changing circumstances and to resolve    P    1        G      B        a  S   T pi   System
disputes.



OED Publications
Recent OED Pr6cis                                                      To address these deficiencies, the institutional frame-
198  Agricultural Extension: The Kenva Experience                 work within which the contracting agencies are orga-
197  Toward a Comprehensive Development Strategy                  nized requires a fundamental reorganization. The road
196  Evaluation and the Development Challenge                     agencies need to be corporatized to allow them to
195  Poverty Assessment: Maximizing Impact                        develop incentive structures akin the that of the private
194  Involuntary Resettlement: The Large Dam Experience           sector, so that they can attract and retain qualified staff.
193  Partnership for Education in Jordan                          Parliamentary legislation to give them autonomy is not
192  Reforming Bolivia's Power Sector                             enough. The procurement process needs to be strength-
191  Bangladesh: Progress Through Partnership                     ened; an institutional mechanism developed to ensure
190  Transport in Indonesia                                       transparencv and efficiencv; and an arbitration mecha-
189  Health Care in Brazil: Addressing Complexity                 nism for resolving disputes between the government and
188  Health Care in Mali: Building on Community Involvement       the private sector institutionalized.
187  Health Care in India: Learning from Experience
186  Global Health: Meeting the Challenge                          1)    t
185  Aid Coordination and Post-Conflict Reconstruction:           Ghana's political and economic decentralization pro-
The West Bank and Gaza Experience
184  Land Administration and Rural Development:                   gram is orchestrated by a powerful central government
Two Cases from Thailand                                      ministry, suffers from weak organizational capacity at
183  Monitoring and Evaluation Capacity Development in Africa     the district level, and does not delegate accountability to
182  Suh-Saharan Africa: Lessons from Four Sectors                local constituents. Roads management and financing are
181  Grassroots Pastoral Organizations in Mauritania              significantly more political at the district level than they
180  Capacity Building in the Agricultural Sector in Africa        are at the central level. The DFR is required to transfer
179  Yemen: Forging a New Consensus (available in Arabic)         its technical responsibilities to district governments, but
178  Municipal Development Projects: Building Institutions        the Ministry of Local Government controls district gov-
and Financing Local Development                              ement administration and funding, effectively
177  Nongovernmental Organizations in World Bank-Supported        recentralizing them. The 110 districts that are supposed
Projects                                                                        'bclitv for themr own     ar rose
176  NMeeting the Health Care Challenge in Zimbahwe               to assume responsibility for their own feeder roads have
Pr6cis aitssi disponible en frangais                               a severe shortage of skilled workers, lack the organiza-
@ http://wssw.worldhank.org/html/ocd                              tional capacity to improve and maintain the feeder
Precis en espaiiol taombien disponible                             roads efficiently and economically, are too small for
Ct)http://www:."orldbank.oarg/httiil/ocd...
economies of scale, and have too few qualified engineers
OED Study Series                                                  to adequately plan and manage road improvement and
1999 Annual Review of Development Effectiveness                   maintenance. The most feasible of the proposed solu-
Developing Towns and Citnes: Lessons from Brazil and the          tions would group district road areas in autonomous
Philippines                                                        departments, governed by a board drawn from represen-
Fvaluation and Development: The Institutional Dimension            tatives of the private sector and users in the districts.
(Transaction Publishers)                                          This would minimize political and bureaucratic interfer-
Financial Sector Reform: A Review of World Bank
Assistance                                                        ence in the day-to-day management of feeder roads. It
India: The Dairy Revolution                                        would also allow districts to exploit economies of scale
Investing in Health: Development Effectiveness in the Health,      and would encourage transparency and accountability to
Nutrition, and Population Sector                                  constituents.
Nongovernmental Organizations in World Bank-Supported
Projects                                                           Roa,] Fund
The World Bank's Experience with Post-Conflict Reconstruction      Ghana's Road Fund was reformed in 1997, greatly im-
OED Multilingual Series                                           proving cost recovery and road maintenance allocations.
Assessing Development Effectiveness: Evaluation in the World      From 62 million cedis in 1996, Road Fund revenue is
Bank and the International Finance Corporation                     projected to rise to 219 billion cedis in 1999. The 1997
Apprieciation de lefficacite     diveloppement:                    act that reformed the fund limited executive branch
L'evaluation a la Banque nioondiale et 6i la Socifte financiere   power by establishing an independent institutional
internationale                                                     mer            by     this    an        t         funds
Determinar la eficacia de las actividades de desarrollo:          mechanism, but this does not guarantee the fund's sus-
La evaluaci(in en el Banco Mundial y la Corporacion Frnanciera    tainability, because the government has the power to
Internacional                                                      reverse the act. Sustainability depends on favorable
Cote d'Ivoire Rcuie de I'aide de la Ban que oiondiale ate pays    public opinion, a healthy macroeconomic environment,
Philippines: From Crisis to Opportunity                            and ad hoc measures to ensure road maintenance during
Filipinas: Crisis y oportumnidades                                macroeconomic shocks. Further, if Ghana is to have
Rebuilding the Mozambique Economy:                                 truly commercialized roads in a decentralized market
Assessment of a Development Partnership                           economy, resource generation needs to be aligned with
Reconstruir a Ecoonomia de Mogambiquc                             resource allocation.



6                                                                        World Bank Operations Evaluation Department
Table 3: Summary Transport Project Data, 1987-98
Performance rating
Project                   Duration                           Outcome                     Sustainability
TRP I                 12/10/87 to 12/31/95                  Satisfactory                   Uncertain
TRP 11                12/13/90 to 12/31/97                  Satisfactory                   Uncertain
NFRRMP               2/7/ 92 to 6/30/98                  Highly satisfactory                 Likely
Conclusions and  Lessons Learned                       . A clear definition of ownership and classification
Five main points emerge from a consideration of the       should precede the decentralization of feeder road
experience with transport in Ghana:                       management to the district level, and devolving
power and accountability for resource generation and
* The transaction costs of contract management need to    allocation to the district level requires a coherent
be adequately considered when moving to a private-     strategy.
sector-dominated institutional arrangement for the   * Road funds can be an important step in managing
design and implementation of civil works. The ben-      roads in a market economy. To complete the commer-
efits of contracting out with the private sector will be  cialization of roads, the fund should generally allo-
eroded if the public road agencies fail to develop      cate support in proportion to a region's contribution
adequate capacity to manage contracts and minimize     to the fund, but should also have a mechanism to
the transaction costs embedded in project design and    explicitly address regional disparities and inequities
implementation.                                         to correct past imbalances.
* The corporatization of road agencies and the estab-   * Improvement in the railway system depends on the
lishment of a dispute resolution mechanism should      implementation of reforms to improve the incentive
precede (or be done alongside) the institutional        structure and the institutional environment. Privatiza-
change to contact out with the private sector.         tion should be promoted in a timely manner.
* Based on 1999 OED evaluation work of Binyam Reja. www.worldlhanik.org/htrlll/oed