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World Bank Document ROAD SECTOR DEVELOPMENT PROJECT Implementation Review July 16-26, 2011 AIDE-MEMOIRE Public Disclosure Authorized I. Introduction and Acknowledgments 1. A World Bank review team (see Annex 1a for a team members‟ list) carried out an implementation review from July 16 to July 26, 2011 of the Road Sector Development Project (RSDP). The objective of the review was two-fold: (i) to review the status of the project and to identify key implementation issues; (ii) to identify and agree with the Government of Nepal (GON) on future course of actions that are necessary for the satisfactory implementation of the project. The team visited a number of RSDP road scheme sites to summarily assess the quality of roadworks and progress status of contracts‟ implementation. 2. The team would like to thank GON for the hospitality extended to it, especially by counterpart agencies and officials. Annex 1b provides the list of people met during the review. This Aide- Memoire summarizes the main review findings, agreements reached, and recommendations made. Discussions held in a wrap up meeting on July 26, 2011 at the Ministry of Physical Planning and Public Disclosure Authorized Works (MoPPW) and comments received on the draft are also reflected in the final version of the Aide-memoire. This Aide-memoire will be classified as a public document, as per the World Bank‟s Access to Information policy and as per the decision of the wrap up meeting. II. Summary of Key Messages The progress made towards the achievement of the Project Development Objective (PDO) is moderately satisfactory. However, the progress on the physical outputs is on target. The overall physical progress of the Road Development component is satisfactory albeit there are some quality issues in the execution of civil works. The coordination between the Project Coordination Team and the Maintenance Branch needs to be significantly improved as the Maintenance Branch needs to be made accountable for the maintenance of the whole network. The progress on the Institutional Strengthening component has been generally slow. If the Public Disclosure Authorized component does not make significant progress, the rating of the component is likely to be downgraded and the overall RSDP performance will be at risk. The Overall progress of social safeguard related activities is satisfactory, including the implementation of Resettlement Action plans (RAPs). Nonetheless, some issues require urgent attention including pending payments for project affected families under Phase I. The overall progress of environmental safeguard related activities has been moderately satisfactory. Although there are no major issues, there have been some delays in some actions. The progress of RSDP disbursement is on track. The effort to finalize FMIS and to develop a contract monitoring system needs to continue. The reporting quality needs improvement. The overall progress of procurement related activities is satisfactory. The procurement plan needs a revision. Most GAAP actions are on track. The enhancement of some of the activities is recommended. III. Achievement of Development Objectives Status Public Disclosure Authorized 3. The progress made towards the achievement of the Project Development Objective (PDO) has been revised to moderately satisfactory. While the progress on the physical outputs of the project is on target, there has been an overall increase in the percentage of black top SRN in poor condition from 20% at the beginning of the project to 22% in as of 2010 (the target is to reduce the black-topped roads in poor condition to 15% at the end of the project). If this trend continues, parts of the PDO will not be achieved. A social impact study to assess the impact of the roads developed under the original financing to verify two indicators (percent increase in population in project districts to have all season road access within 20 minutes walking distance and decrease in journey times to key economic and 1 social centers in the project area) is currently underway. Annex 2 provides a summary progress on the achievement of results. Implementation Status Road Development Component 4. Upgrading Works Sub-Component. The project aims to upgrade 700 km of earthen tracks to all- season low-cost motorable road standards. These roads will improve connectivity of eight remote district headquarters1 in Mid West and Far West regions of Nepal. Two district headquarters (Baitadi and Dailekh) are now connected by all season roads. As of June 2011, 290 km roads (260 km and 30 km with Otta-seal and gravel surface respectively) are completed. Furthermore, upgrading contracts are awarded for an additional 123 km of roads. Slope instabilities have prevented the upgrading of roughly 30 km length to Otta-seal standard (upgraded to gravel standard only). These sections now need to be upgraded with Otta-sealing. Further 12 contracts (285 km) have been planned to be procured in FY 2011-12. The overall physical progress of this sub-component is 42% against 45% time elapsed. This is considered satisfactory, especially given that a number of contracts under the additional financing (AF) have already been procured and quick progress can be further achieved once the physical implementation starts for all these contracts. Also all 6 emergency contracts are nearing completion. Annex 3 provides details of the sub-component progress. 5. Periodic Maintenance and Roads Safety Works Sub-Components. The target is to undertake periodic maintenance (PM) of 2,550 km of black-topped strategic roads. As of June, 2011, PM works of approximately 483 km (421 km and 62 km under original and AF respectively) of roads have been completed, 30 km road sections (in Ilam and Kathmandu districts), under the original project, are yet to be completed. Actions are needed to complete them. In FY 2010-11 26 PM contracts (718 km) have been awarded. As of June 2011 roughly 62 km roads are completed. The overall physical progress is 19%. If the total length of awarded contracts is considered, 46% of the total target length has so far been procured. The list of FY 2011-12 PM roads is yet to be finalized (the target was end- April, 2011). DOR is requested to finalize the list without a delay. The coordination between Maintenance Branch and Foreign Cooperation Branch (FCB), in the planning and implementation of PM activities, is not adequate and it needs to be improved. The necessary involvement of Maintenance Branch in PM works is stressed in order to achieve the sustainable maintenance of strategic roads. Details of the progress of PM works are provided in Annex 3. 6. Road Safety Roadworks: Four road safety physical works contracts have so far been awarded. Of them only one is completed and the remaining 3 contracts are in different stages of completion (progress ranges from 40 to 50%). These contracts are planned to be complete by end-August 2011. A contract in Kathmandu valley requires re-bidding as the submitted bids were found to be non- responsive. The procurement process of two more road safety contracts has already started. They are scheduled for completion in FY 2011-12. The Road Traffic Unit has been planning further road safety physical works as well as an assessment of black spots on some of the major strategic roads. Institutional Strengthening and Policy Reform Component. 7. The component supports eight activities that span across six units of DOR as well as Roads Board Nepal (RBN). There has been very limited progress on the agreed activities. A number of reasons have been identified for the slow progress including lack of clarity (both on content and processes), insufficient budget allocations, document processing related delays and somewhat ineffective coordination between relevant DOR units and the RSDP Project Coordination Team (PCT). If significant progress is not made on this component, the rating of the component is likely to be downgraded and the overall performance of the project will be at risk. The review team and PCT have agreed a number of critical future steps to significantly improve the performance of this component (steps with the deadlines are available in Annex 6 under institutional strengthening component). Annex 4 summarizes the assessment details. Safeguards Performance 1 Baitadi, Darchula, Bajhang, Dailekh, Kalikot, Jajaorkot, Mushikot and Jumla 2 8. Social Safeguards: After a review of safeguard implementation activities the team finds its overall performance satisfactory (see Annex 7 for review finding summary details). Two road sections‟ RAPs under AF are already under implementation. Considerable progress has been achieved since the last review. GESU has taken steps in implementing recommendations of the external monitor following their review of July 2010 to strengthen in-house capacity. RAP implementation of other three roads is being started. The review has followed up on safeguard actions agreed during the last review. Although there has been some progress made, a few actions are still outstanding (e.g. the slow implementation of Vulnerable Community Development Plan (VCDP) and the development of a work plan for implementing the recommendations of the external monitor). The details are described in Annex 7. Urgent actions needed to complete them. DOR has agreed to take immediate actions on them. It is agreed that DOR will inform the Bank on results by end-September 2011. Agreed future actions on social safeguards are presented in Annex 6. 9. Environmental Safeguards: The overall progress of the environmental safeguard related activities has been moderately satisfactory (see Annex 7 for details). Although no major issues have been identified, there have been some delays in some actions. Site-specific Environmental Management Action Plans (SS-EMAPs) of three roads exists in draft forms. They require to be finalized as soon as possible. It is required that bid documents should reflect social and environmental aspects. It has been agreed that GESU will provide input in this regard.
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