AFRICAN DEVELOPMENT BANK GROUP
TANZANIA
RUSOMO-LUSAHUNGA ROAD
Project Performance Evaluation Report (PPER)
OPERATIONS EVALUATION DEPARTMENT (OPEV)
17 April 1991 'î t :l: (r) .i. ::
j.
TABIÆ OF CONTMiITS
EQUTVALENTS AND ABBRE\TATIONS (ii) .,tr.! LIST OF'ANNEXES (iii) .,) PREFACE (iv) BASIC PROJECTDATA (v) EVALUATION SUMMARY (ix)
PROIECT PR.FORMANCE MEMORANDI]M
l. BACKGROUND 1 1.1 The Economy I 1.2 The TransportSector I 1.3 The Project 1 2. PRO'ECT IMPLEMENTATION 2 2.1 Loan Effectiveness 2 2.2 Procurcment 2 2.3 ImplernentationSchedule and Modifications 3 2.4 Reporting 3 2.5 Time Dimension 3 2.6 ProjectCosts and Related Financing 3 2.7 Disbursement 4
3. PRO'ECT ACHIEYHVTH\TTS 4 '..'i .ti€ 4. PM.FORMANCE EVALUATION 5 i+
4.1 OperationalPerformance 5 :,il 4.2 Traffic 5 4.3 EconomicPerformance 5 r:i 4.4 Institutional Performanceand Development 6 4.5 EnvironmentalAspects 6 4.6 Perfonnanceof the Borrower,Contractor and Consultant 6 4.7 Bank'sPerformance 7 5. 7
6. CIDI{CLUSIONS*LESSON$ AI{D M 7
6.1 Conclusions 7 6.2 Lessons 8 6.3 Reconrmendaticns 8
This Report has-been preparedby IvIr. R.K. HOYAH (Principal Transport Econornist) following a missionta Tanzaniain June,f990.
MAA-02Ms (ii)
EQI'wALEÈ.ITSAlilD ABBREVIATTONS
CurrencyUnit = TanzaniaShitling (T.Sh)
ErchangeRaûBper I Ft A OriginalLom SWpl. Loan
Appraisal T.Sh.7.97r T.Sh 9.467 First Disbursement T.Sh.9.75r T.Sh. 13.078 Last Disbursement 13.078 T.Sh. 63.262 PCR (Iune 1988) I.rn. T.Sh.117.318 PPAR (June1990) T.Sh.254.M3 Average T.Sh. 10.266 T.Sh.91.513
ABBREVTATTONS
ADB African DeveloPnæntBank ADF African DevelopmentFund EIRR EconomicIntemal Rate of Retum ICB IntemationalCompetitive Bidding IRP IntegratedRoad Programme PCR ProiectCompletion RePoft PPAlvt - Proiect Perfo'rmanceA-udit Memorandum PPAR - ProiectPerformance Audit RePort T,]NDP. UnitedNations Development Programrne vpd Vehiclesper day
MAA-0244s
:i i lî l' 1l .i t.! tf il (iii)
LISTOFATiINE(ES
,',
'I AIINEXNo. TITLE NO. OF PAGES
l. GeneralCargo Cleared forZdke,Burundi andRwanda I : 2. Ministry of lVorks and Communications:vv''rq'rlerrVrrùr Fiver rvv Yearsr vsù Training Progtammetu l-
3. Correspondencewith Goverment of Tanzania for comments on report. 2 :
ATTACIIMEI{T Project CompletionRepon
MAA-0t44s (rv)
PREFACE
This is a Project PerformanceAudit Rçort on the Rusumo-Lusahurrga-\oad irl Tanzaniafor which " totri of trvo ADF loans totalling FUA 18.85million (an originalloan of FUA 8.00 and a ruppl"."ttary loan of FUA 10.85milion) were grantedin Febnrary,1977 and April, 1983 respectively. The Audit Report consists of a Project PerformanceAudit Memorandum (PP-AM) (PCR) Dr€Daredbv thc Op"r"tionl Evaluation Office (ÔpEv) and a Project Completion Report à"iôa f"U"iary, t9ô9, preparedby the Infrastructureand Industry Department I. The ppAM is basedon a review of matedal in Bank files includin-gthe Appraisal Reoorts.the PCR, correspondencewith the Borrower relating to the project, discussions-wtth b'"ilË';;fË;";d;"*iiii't-rriï*3".t, àir"ussionswith the Goiemmentand data collected during a missionto Tanzaniain June,1990. The Audit Report agrcedin part with the contentsof the PCR. \Mherethere was a need for firrther d;taii ;;;; ri-a *a'" divergenceof opinion,-metho MAA-024d.s (v) RUSI,'MO-LUSAIII.'NGAROAD - TANZANI,A BASIE PROJECTDATA Country Tanzania Project Rusumo-LusahungaRoad LoanNumber Original Supplementary csrrzffxnTry cslrztrRlTTl3 (Suppt.l) Borrower Govemmentof the UnitedRepublic of Tanzania ..J Beneficiary Ministry of Works andCommunications j* '.: ExecutingAgency Ministry of V/orks andCommunications ,ii :.1 A. IJOAT{ :i .{fpraisal Estimatc Actual ..a :' t. Requestfor Loan (date) rnsn982 1 .i L. Amount (FLIA million) 8 18.85(8 + 10.85 suppl.) 3. ServiceCharge 0.75% 0.7SVo 4. RepaymentPeriod (Years) 40 40 5. GracePeriod (Years) 10 10 6. Loan NegotiationDate 14 February,1977 7. Loan Approval (i) Original 2l February,1977 (ii) Supplementary 14April, 1983 8. Loan SignatureDate (i) Original 29March,1977 (ii) Supplementary 1l May,1983 9. Loan EffectivenessDate (i) Original 18 December,1978 (ii) Supplementary 22 lune, 1983 IvIAA-0244s (Yi) B. IBOIrcLDÀTA AppraisalEstimæ Achtal l. Total Cost (FIJA ndllion): FC LC FC LC 6.60 4.28 18.85 12.3r 2. Financing Plur TFLIArnillion) ADF 8.00 18.85 Govt 2.88 12.31 J. Dealine fcr First lJisbursement: (i) Original: 30 June1978 (ii) SuPPlernentarY: 31 December,1983 4. Effective Date of First Disbursement: (0 Original: 06Mne (ii) SupPlementarY: 27107183 5. Effective Date of Last Disbursement: (i) Original yznft3 (ii) SupPlemerrtai:Y 6. Cornmencement of Works Ianuary,1978June,1978 1985 7. Date of Completion of \I/orks July 1980 Malch, C. PMIFORMATiICEINDICATIORS ovemrn7o : 4l7Vo 1. Cost l6tVo 2. Time Ovemrno/o : - on Effectiveness SlipPage 10 months - Slippageon First Disbursement - SttPpageon l-ast Disbursement - of Extensionsof Last Number 2 Disbursement L6lVo - SliPpageof ComPletionDate 7o 3. lnstitutional Perfonnance: Not Satisfactory 4. Ccntractor's Pçrfomance: Satisfactory 5. Consultant'*s Perforïn ance : Not Satisfactory Report PCR Audit 6. Economic Intemal Rate of Retum (7o): - Appraisal 75 35 35 B 7. SuccessRatrng MAA-0244s (Yii) D. MISISIONS No. of Activity Ddc Persms Mao/Weeks Identification Prcparation Appraisal 7 Nov. 1976 ; 4 Follow-up (General) 3 July 1981 1 2 (with other projects) ': SupervisionI (Iechnical) 4 Dec.1981 I 2 Re-Appraisal tul lune 1982 2 4 Supervision tr Oechnical) May 19E4 2 2 Follow-uptr (General) 8 Nov. 1984 I 2 (with other projects) PCR 19June1988 2 4 TOTAL il m ;,Ê l:.! E. DISBURS&IBII (FUA Million) Original SWplmary Loan Amount 8.0 10.85 Disbursed 8.0 10.85 Cancelled Nit Nit Balance Nil Nil Total EO 10.85 Ycarly Disbursffi (FtlA Mllion) ,e Supplcmcmry ..; Originalloæ SWplærery Orieinaltom .'Ê 1978 4.00 r979 r.4l 1980 2.87 1981 3.02 . 1982 0.59 1983 NA o-.ot 7.71 1984 :' NA 1.80 1985 NA 1.00 TOTAL 8.00 NA 8.00 10.51* F. CCINTRACTOR Name Impresa del Benaco Responsibility Constnrction of road to two-lane bitumen standard Datecontract signed: tuc.1977 May 1978 Date ContractTerminated Iuly 1980 March 1985 ContractDuration 30 months 81 months (Million 347.55 Amount T. Shilling) 8l.80 3 * The balanceof FUA 0.34million w.lsdisbuned in 1988. MAA-0244s (Yiii) G. CONST.'LTA}iIT Name Italconsult Date contract signed - Aug.1977 Date contract terminated July 1981 March 1986 Contract duration 43 months 93 months Amount (Million T. Shilling) 4.93 14.00 H. ÛTTIERBAIiIK GROT,'PFINAT'ICED PROJECTS IN TI{E TRAI{SPORT SECTORIN TAI{IZA}iIIA Anrrot Dal€ æ Post- Næ of Proirct (miltion) Alproved Coryleæd Evaludfun 1. Mingoyo-Masariroad UA 4.00 zttnn4 Sn8 1987 2. TenBridges FUA 5.00 1975 1985 3.- TanzaniaHighway ' Rehabilitatioi FUA 19.20 1987 on-going rûN\-02Ms (ix) EVALUATION ST,JMMARY l. Pr,otsct$encsis,Ob&ctives and DescriFim Projcct Ciffesis 1.1 The pruject was preparedby Consultantsfor the Govermentand was prcsentedto the Fund in ! 975 fn!' financing. After a review of the project documents,the Fund recommended that theseshould be re-exarnined,and where necessary,additional soil, drainageand pavement studiesshouid be undertakenby the consultantwho would supenriseconstruction works before tendering.The recommendationwas carried out. 1.2 The project was appraised in November, 1976, and a loan of FUA 8.00 million approved in February L977, for the constmction works. Due to cost-overuns which occurred during constructiCIn,ths project wix re-appraisedand supplementary loan of FUA 10.85 million was later approvedin April, i983. Objectives 1.3 Objectives of the project were two-fold. Firstly, the road was expected to encourage agricultural production in the then West Lake Region (now Kagera Region). Secondly, the road was to provide an easier and shorter transport link to the sea for landlocked Rwanda than through Uganda and Kenya to the port of Mombasa or through Bunrndi to the port of Dar es Salaam (Tanzania). Thus the road is not only an important trunk road but a segment of the intemational route betweenTæuania and Rwanda(PCR, para. 1.3.1). kscription 1.4 The road was to be constructed to a two-lane bitumen standard over a distance of 93.1 km with 6.5 m wide carriagewayand2 x 1.5 m shoulders. 2. Projcç1llrrylemcrtqiçn Loan Eftctiverrcss 2.1 The initial loan of FUA 8.00 was approvedon 21 February 1977 and became effective on 18 December 7978, i.e.22 months after approval. The supplementary loan of FUA 10.85 vras approvedan 14 April 1983 and becameeffective on22 June 1983, i.e. 2 months after approval. 2.2 The iapse of 22 months in making the first ioan effective is excessively long whereas 6 rnonths should be the noiln. This calls for an adequateand timely launching missions soon after loan approvatrto assist Borrowers in fulfilling loan conditions and to carry out neces$aryaËtioil l"r making the loan effective within a period of 6 months or less. The alacrity on the pan of the ûovemment in rnaking the suppiementary ioan effective in 2 months is a demonsEation cf the fact that. indeed" loans can be made effective in as a little a time as two months much earlier Nhaneven the 6 mcnths now being recorlmended by the Bank. }y|.AA-02Ms ,1 ,r] (x) Procrnænt 2.3 Conuactfor constructionworks was awardedfollowing an intemationalcompetitive (IcBtin ,rrotd*"" with ADF rules.for procurcment_ofgôods and services.Similarly, uiaaing the ADF the consultantfor the supcrvisionof constructionworks was selectèdin accordancewith 4.2.t and4.2.2)' on the whole,there werc no did"ri;"rlot o.".ç-"ô"ittt*tttJPcry,pqas. irr"gulttities in the procurementof goodsand services' PnoFctCoss md Rel&d Financing 4'6' \\e costsand financing are well covered-blthe?cR, se,ctions4'5 and 2.4 Project the ADF the p*:*t ** estimarcd?tLne.t"iyt t9 b|efÛl tO'gSmillion for which total cost of the local cost; 8.00 (i4';b;;;;ft";; uf irtg foreign and pan of loan of zuA 9l9hang9:ost the remainine-loq4 the Govemmentof Tanzaniawas ,o ptoiiâ" ËÙÀt85 million-ë97ù :y"oy* ttrc lo*est tendered^coi;ict*iq"fu T' Sh' 13S'99million-as agg'ins1 T, lh cosr. However, showsthat initially g6.7gmillion "rti-at"a ui"ped;rt, i.e-.l,1Tvoïr tne appraisalestimate which the projectcost \ilas underestimated. in April 1983to solve Z.S The ADF granteda supplementaryloan of FUA 10.85million it tiiat tfr""proi":l g:i "t!1try{f completed' The total ADF the financingproblem ,îd to seeto "slt. total at FUA rg.g5 *iliid G 203J6 ririuiotf or 56.36voof the parricipation,therefore, stood stoodat r. sh. rs7.79million or fil"l:"ffiffii: H ,il;tr,Li-r'ana,rh" c;;;;; constribution 43.77oof theproject cost. 3. PsojcctRÊsults transport the objectivesof the project was to provide an gasier-andshorter 3.1 one of of Bunrndi and eastern link to the sea for landrockcdRwand;ËtiJ ,Ë pighbg,irins countries uy riié Ëor the period 1988and 1989,87vo ztiirÊ,. This objectii't À-ueenn ny uîàil"? Ë6lr;i. the i*poîrô-r'i"tiftd4r thglrort of Dar es salaamwent by and92%respccrivelyof Rwand.', on the oroiect road For the sameperiod, ".tii*\nt "Ë uaflirc ganspgrted Droiect road. t"rgt^".I""d^ilnnoit ;; tr'. ptï"tt roadgreiv ÈomT4vo ;*ainEo ndnq"i\r#ffiilffiil.nîiiitp"tt (Annex 1 tu1986,;t"* tnet ptî1ett Ëompletion,to 86voin 1989 )' satisfiesthe demandfor The project road is also of domesticimportance in that it 3.2 from the areain Tanzania' road transportto haïiJaËfi1o,,j ttË;,;à;;;J"*iol"a n'ojed 4. Pcrformmæ Evaluation 1.1 OPerdionalPcrfomencc it to hasbeen constructed to tt-respecifications that would enable The project road roadin september' handlethe projectSâ;'#h;:*ùllh rh;;;;ffi;;;i tle !-usâhunga-Bukombe road alsoto bitumen standardto conunenceln 1988,and the "onrt*"tiôn of the B"k;;bË:isaka the thi remaqing tt"ti*t from Dar es Salaam under 1990 as well as the rehabilitation oi will link the programmecunently *â"_i i*preti*tation, an-a'-weather road Inæcrated Road Rusumo-Lusahungawill play portlf es saù; to the border-p'os;;R.fi;"o. rrtos ttréfink Dar objectives set at appraisal(see map rn ihe role a8 an intemational road *tric-r, *"r on" of the Annex l, PCR). ffitu{-Qr44s (xi) 4-Z Econmic Performmoe Due to the low growth in traffic, the recalculatedeconomic internal rate of retum (EIRR) is 33Vo with Tanzaniatraffic only. The EIRR is 35Vowhen intemational traffic is included(PCR paragraph,5.3.9) as comparedto75Vo at appraisal.Nevenheless, the recalculated EIRR is still accpetableand manifests th€ viability of the investmentmade. 4.3 Instimtional Performanceæd Developmcnt At the time of appraisal,the Roads Branch of the Ministry of Works and Communicationswas suffering from an acute shortageof local engineerscoupled with the problemthat conditionsof servicewere not attractive. However,the Govemmenthad underwaya prograrnmeto train Engineerslocally andabroad. The training progranlmehas made no impact and the presentstaffing position of Engineersrepresents orty 48Voof the total requirements(Annex 2). lt behovesthe Govemment to amelioratethe conditionsof servicefor Engineersin order to retain an adequatenumber of them to meet the exigenciesof the IntegratedRoad Programmeand for the firnrre expansionof the roadnetwork. 4.4 Perfonmmæof tbe Borroweç Comacûoræd Coqgultd (i) Bomower The performanceof the ExecutingAgency has not beensatisfactory. It was slow in taking action on changesin the drainage design when difficulties were encounteredduring constmction. The Borrowernever reactcd quickly enoughto the sho:tageof funds on the project so as to searchfor a supplementaryfinancing at an eady stagcof project implementation. It also failed to efficiently carry out its progriunmeof humanresources development. (ii) Contractor The performanceof the Contractorhas been satisfactory. The quality of the finished works werc judged good. And when funds for the projectrun out, the contractorcontinued with constructionworks throughfunding from his own sourcesuntil the supplementaryloan form ADF becameavailable (PCR, para. 4.8.2). (iii) Cmsultam The performanceof the Consultant, Italconsult has been judged not satisfactory (PCR, para. 4.8.1). There rilas a flaw in its overall performancewith regard to design. rffhile reviewing the earlier designreports preparcd by Sir Alexander Gibb and Partners,it should have ascertainedon the adequacyof materialsinvestigation, the size andnumber of drainagestructures and pavementdesign. Poor projectpreparation and designled to erosionand drainageproblems andan increasein earthworksduring construction. 4.5 Bank's Pcrformanoe The performance of the Bank can well be described as mixed. Seeing the inadequacyof the detailedengineering studies conducted by the ConsultantSir AlexanderGibb and Parrrers,the Bank rccommendedthat the supervisingconsultant should review the studies beforccalling for tenders MAA-024s (xii) Aware of the fact that the project road would play a secondary role as an intemational road for the transit cxport/import traffic of Rwanda, Burundi and eastem Zaire to and from the Tanzaniansea port of bar es Salaam,and in the inrcrest of promotinq inter-regional co-operation,the Bank set âs a condition of the loan, and obtained from the Govemment of Taniania, an assurancethat it would allow a free flow of transit traffic of the three countries. The abovenotwitt6tanding,thc supervisoryrole played by the Bank during p.roject implementationwas poor. The ExecutingAgenèy complainedvehemently to the audit mission on this issue. 4.6 Pro*rctsusteinabilitY The project road is adequatelymaintained at the moment. Vfithin the current financial year, thi to"adis going to bê rc9èAea to provide a_stronger Td a smooth running surfacc. mis blt cnhanceùvinls in vehicle operatinËcost and reducemaintenance costs. Vfith a "*ti"o.A adequateroutine anà periodic maiirtenanèe,benefits on the road will accrueto the economyas a wh-oleand to the usersin particular. 5. Conclusions,IÆsmsodRoomcNrddi@s Concfusirns S.l The PPAM acccptsthe conclusionsof the PCR. The project has beensuccessfully àomotercd and the quality àf tne finished works has been found satisfactory.- How€v€r, years in ;c.onid;i"n-p"roa ""ii"aéo over 7 years,i.e., a delay or 4 lf2 Projeçt TP]1T:lT:t-:i due to cost tirderestimation and the consequentcost oveffuns, incrcasern \ilo.rk quanutres'slow decision process on the part of the Exéqting Agengy, sho-rtag1-of foletg4 -exchangeanC ;;;fitd;;-"titi"ft, and,ttre war betweenTanz-ania-and Uganda (PCR, section 6'1)' S.Z Although the objectivesset at appraisal^tiaggra.Region,have not been fullyattained due to the near stagnation in agricufrrai-pto'tio"ti"" itt trtr the recalculatedeconomic intemal ror (local ffiïf;*"tî lsga i*ï"" intcmational trafrc is t-akeninto account) and 337o Tanzaniantraffïc only) is satisfactory. 5.3 Technicalsupervision from the Bank had beengrossly inadequate. Lcteonr Ttre frst objective of increasedagricultural.productiotl qth" pigi::t^: 5.4 to mvèst,1Ï. ?j rn intio"n." has not u"en ntri due to the lack of resourceson the part of the Govemment agricultue within the KageraRegion. due The implementationschedule set at appraisal^Êxecutingwas too optimijtig without taking 5.5 implementation account of rhe #iih;tfi;Ë;rÊr;r;;s of the Agency, Project t"ÈJàrt.r shouldbe examinedand discussedwith the executingagency. The establishmentof, and a strict ap'pligationof, regional c:-ope{atign agleements 5.6 gôods between these berween neigrruourffi;;;;;i;r ;"d;; ;uoJ ira the moveirent of countries. pafily to the 5.7 The paucity of technical superv.isionfrom the Bank has contributed delaysin projectimplementation' IrdAA:0244s (xiii) 5.8 Launching and disbursement missions are essential for a smooth and quick disbursementof loans. Rccmmdtimq 5.9 From the aboveanalysis, it is recotmnendedthat: Forthc Govemment (i) Govemment should search for funds to implement an agricultural development programme for the Kagera Region for the fulI benefits of the road infrasûinctrue to be realised by the population within the region in particular and the economy of Tanzania as a whole; (ii) Adequate budget allocation should be made available on regular basis for the mainienance of the road so that it can live its normal economic life of 20 years to play its social and economic role in the impact area; (iii) during project implementation, problems being encountered by the Executing Àgency should be promptly communicated to the Bank for solution to be found early to avoid delays and cost overruns; (iv) Govemment should provide Forest/Game Park Rangers as guards for consultants working in wild countryside where wild animals abound; the servicesof the guards should be paid for by the Consultants;this is to ensure that thorough materials survey should be carried out at the detailed engineering stage; (v) the Ministry of Finance should act quickly on the re-location of the customs posr at Rusumo and appropriate concrete parking area provided for the heavy trucks; (vi) Govemment to urgently ameliorate the conditions of service for Engineers in order to retain an adequatenumber of them to meet the exigencies of the IRP currently being implemented and for the future expansion of the road network; (vii) Govemment should endeavour to settle last payments to both the Contractor and the Consultant. FmtuBmk/Fud (i) In establishing prqect implementation schedule, duc account should be taken of the institutional capacity of the Executing Agency and whenever possible, technical assistanceand training programmes should be included in the project (PCR, pan.6.2.1 (i); (ii) Adequate and frequent technical supervision of projects should be undertaken by the Project Deparrnents. On-going projects should be supervised,at least, twice a year for more Bank involvement, lesson learning and prompt solution to problems during implementation (PCR, para. 6.2.1 (ii)); in this connection, the regional and country offices should be adequately sfaffed with technical. personnel. to undertake . quarterly supervision missions on on-going projeca to supplementthose of the Project Departmentsfrom the Bank Headquarters; lvl[A-0144s (xiv) the Bank (iii) At ttre preparatio-nand appraisal stages of a transport project, tttæîo-pià*"ntary-the and-resorircèsare available shorild .r""rt itt P-rogfarnrne to be other sectorsthat will mak-e Ueriefiæof the-transport Project for g.trk provide û:ctinical and fully rcalisf--iyrt"î* posiurr,-tlt" should in this t"giî.' iltttft;i"F*'instutt"e, the Country fïnancial assistance the programme; 6fr it"j""tt n"f.tt"t""ts conôemedshould examine how projects identified by Bank Group "ro torittiUot" ô financinq ag'cultural tNOf Àgdculnue Snrdyfor the KageraRegion; into (iv)Socialandeconomicenvironmentofacountryshouldbetakenproject cost consideration--in-esiimati"g cost of projects to avoid underestimationas againsttender prices; by the the problems encounteredwr{r paymentsin foreign exchange (v) Given insist on dircct Borrower to Contractorsand Co"s"ftôtJ, the Bank should way of disbursement' Paymentsas a more efficient !vlAA.-0244s T PROJECT PERFORMANCE MHVIORAI{DTJM ffitu{.-Qr44s tg. i:: '::'.i! :,'ll I. BACT(CROI]ND 1.1 The Eomoqy 1.1.1 Betrn'een1966 and 1973, Tanzania'seconomy was relatively buoyant with real Gross Domestic Product (GDP) growing at 4.47oper annum and domestic savingsand gross investnnentsaveraging l77o and2lVo of GDP respoectvely.However, economic growth dropperi substantiallyn 1974-75,due to the emergenceof severaladverse factors such as intemationa"l recessionand severe drought that afflicted most parts of the country n 1974. The years 1975-1977witnessed some recovery in economic performancewith growth in real GDP averaging6% pet annurn,but since 1979advene weather conditions, extemally-induced inflation, a steeply rising impon bill and declining export receipts have combined to halt the incipient economicrecovery and have, in fact,plunged the economyinto a seriousrecession. t.1.2 The balanceof paymentssituation remainedcritical during 1984 and 1985, as exports continuedto decline in volume and price while the quantumof external aid continuedtEr dccline in real terms. As a result,scarcities of foreignexchange continued to afflict the economy during 1984and 1985,and this resultedin impon levelsin 1985being 227olower thanthe annual averageduring the period 1978-80.This level of importswas inadequateto effectivelystimulate thc productive scctorsof the economy and was, in fact, maintainedonly by deferring scheduled timely and ordedy extemaldebt servicing. 1.1.3 In an attempt to addressthe country's economic problems, the Govemment launcheda 3-Year StructuralAdjustment Programme (SAP) 1982/83 - 1984185which placed emphasis, in the industrial sector, on rehabilitation and completion of on-going projects, aarl increased capacity utilisation rather than on expansion into new invesûnent ventur€s. The Govemment also introduced,within the SAP, a comprchensiveexport drive package,involving export+amings retention schemesand semi-liberalisationof imports through an "o\iln-funds" impon scheme. To promote exports further, the Govemmentalso effected devaluationsof the TanzaniaShilling n 1982,1983and 1984. The Govcrnmentalso designed the 1982183budget tii conform to the objectivesof the SAP, with the result that the 1982183budget substantially curtailed expendituregrowth andincreased revenue. 1.2 The TransportSysæm t.2.1 Tanzaniahas five modesof transports,namely, road, rail, lake and maritime, air ancl a pipeline. The transport system and currcnt status are well covered in the first section of the Projcct Completion Report (PCR). Howcvcr, it should be emphasizedthat Tanzania transport infrastnrcture provides important corridors for the extcmal trade of fïve neighbouring land -locked countries : Zarrlùlia. Burundi, Rwanda, Uganda, Zairc and Malawi. The Rusumo-Lusahungaroadis one such conidor servingRwanda, Burundi andeastem Zure. 1.3 The Proirct 1.3.1 The project, having been preparedby Consultantsfor the Govemment, was prcsentedto the Fund in 1975 for financing. After a review of the project documents,the Fund recoffunendedthat theseshould be re-examined,and wherenecessary, additional soil, drainage and paverrent studiesshould be undertakenby the consultantwho would superviseconstruction works. The recommendationwas carriedout. 1"3.2 However,during the implementationof the project, it becameapparent that the initial studies on soil and drainagetogether with the subsequentones proved to be inadequate giving rise to increasein earthwort quantitiesand drainagestnrctures. It should be mentionedat this point that the initiâl consultantwas Sir AlexanderGibb and Parûrers(U.K.) while the supervisingConsultant was Italconsult (Itdy). l1dfu{-g't44t -2- 1.3.3. During discussionswith the Roads Departnent of the Ministry of rWorks-and Communications,the audit missionleamed that a newly constmctedroad in the vicinity of the ^pr..,"Utemprojectwas also a victim of inadequatestudies on soil and drainagesystem. A closerlook at the revealedthat the KageraProvince where the projectsare located is characterisedby-wild èountrysideand animals. Studyteams are therefore frightened a!4 huniedly_g11ry,out superficial tests on the ground but rely mostly on aerial photography. Hence the difficulties faced by^ contractorsduling construction. More indepth studiescould be doneon !h9 ground,ltowever, if studyreams were-to be guardedby ForestRangers, their servicesbeing paid for by the Consultant' (a) Objætives r.3.4 The objectives of the project as statedin the appraisalreport and the PCR were to: (i) encourageagriculrural production in the Kagera Region (formerly known as ri/est Lake Region); (ii) provide an easier and shorter transport link to the-sea for landlocked Rwanda ihan through Uganda and Kenya tô the por! gf Mombasa or through Burundi to the portbf Dar es Salaam.(PCR, para. 1.3.1). (b) Descriptim 1.3.5 The road was to be buitt to a two-lane bitumed standardbetween Rusumo (Rwanda/TanzaniaBorder)and Lusahunga(93.1 km) accgrdinglo the specificationsin the tender documents.Detailed descripion is providedin the PCR,chapter 3. 2. PROJECTM 2.1 LoanEffectiveness Z,l.l The initial loan of FUA 8.00 was approvedon 21 Febnrary 1977 and became effectiveon 18 neclmUer 1978,i.e. 22 monthsafteï'approval. The supplementary-loan of FUA iO.gj was approvedon la Aprii 1983and became efféCtive on 22 Juné 1983,i.e. 2 monthsafter approval. Z.I.Z The lapse of. 22 months in making the flrst loan effective is excessivelylong whereas6 months rtiouta be the norm. This calls for an adequateand timely launching missions roon rft". loan approval to assist Borrowers in fulfrllinS- lqrf conditions and t9 carry out ;;;;rr.ty u"ii6n iti inuting rh" tom "ff".tiur within a periàd of 6 months or less. on the other hand the lapse of 2;ontiis i" -ufi"g the supplementdryloan effective was a demonstrationof ffifr|';;ik ;irti" rleù " qriJt p.y-èiruo rheio-ntractor and to avoidfurther delavs.in the eiecution of constructionworks (Én, pua. 4.4.3). The alacrity 9n the P{n of- tfe Govemment in makinx th" rupplementaryloan effective in 2 months is a demonstrationof the f.t tft"t, ittà"eA, toans'canUr "ÂuA"èfr.iinr in as a little a time as two monthsmuch earlier than eventhe 6 montirsnow being recommendedby the Bank' 2.2 Prcque'ment Z.Z.I Contractfor constructionworks was awardedfollowing an intemationalcornpetitive uiâaing geB) in accoroancewith ADF rules.for procurement-ofglods and services.Similarly' the consultantfor trti r"p"*ition of constructioniorks was selectèdin accordancewith the ADF therewere no suidelinesfor use "f-rô$Ji-ts (PCR,Paras. 4.2.L and4.2.2)' On the whole, Ltesolatitiesin the procurementof goodsand services' MAA-0244s ::i.1 J-È -3- 23 @fercrnæim S*oarfe anafvfoaincations 2.3.1 There was a delay of fïve months in the pre-contract activities before the cornmencernentof the ccnstructionworks. On the whole,there was a delay of 51 monthsover the tirnetableset at apprai.salfor the completionof works due to threernain factors. First, inadequate soil and drainage studiesgave rise to erosion and increasedearthworks during construction. Much more time had to be spentto carry out additional studiesfor additonal drainagestmctures (PCR, para. 4.3.1). Second,the Tanzania-Ugandawar had its adverseeffects on the project in terrnsof logistics anctrthc supirlyof necessaryinputs. Third, the project cost was underestimated at ap'praisal.To pur it anotherway, the tendercontract price was 160Voof the app.raisal estimate (PCl{, para" 4.4.3). This necessitatedthe search for supplernenta-+rfunds which was time consummg. 2.4 Reasiqg 2.4.1 Monttdy FrogressReports were regularly issuedon the project indicatingprogress made and signalling any difficulties that could be foreseen. In the absenceof an adequate : supervisionfrom thè Bank, the Monthly ProgressReports enabled the Bank staff to follow the progrcssof work on theproject. 2.4.2 During the audit mission,thc ExecutingAgency expressedits dissatisfactionabout the nearabsence of Bank supervisionrnissions on the project andthe fact that the Bank was slow in respondingto problemson the project during implementation. 2.5 TiæDimsion 2.5.t Table 4.1 of the PCR showsthat the actualtiming of implementationactivities has varied considerably from that set at appraisal. This is due to an optimistic implementation schedule set at appraisal without taking account of the institutional weaktess of the exccuting agcncy at tire tiniC and the complex process of Govemment decision taking that could be time cônsuming. This coupled with the reasonsmentioned in para. 2.3.1 abovet g?ye rise to a total delay of 51 months on the project (PCR, para. 4.4.3). This meant a loss of 4 U4 years of project benefits to the economy of Tanzania. ] :.!i 2,6 ProFct Costsed Rùbd Finercing .i 2.6.1 Projectcosts and financingare well coveredby the PCR,sections 4.5 and 4.6. The total cost of the project was estimatedat appraisalto be FUA 10.88million for which the ADF loan of FUA S.00(747o) uras to finaceall the foreignexchange cost and part of the local ecost;the Govemmentof Tanzaniavrâs to provide FUA 2.88 million (26Vo)to cover the remaininglocal cost. However, thc lowest tendeiedconract price was T. Sh. 138.99million as againstT. Sh 86.78million estimatedat appraisal,i.e. l6AVoof the appraisalestimate which showsthat initially the project cost \ilas underestimated.The social and economic environmentwas not taken into considerationin estimatingthe costof the project. 2.6.2 In a situation like this, the Govemment should not have signed the contract until the Bank had been infornreci and the Govemment had been certain of the availability of the extra funds before letting out the contract. From the project files, the Government did inform the Bank (letter No. W'C*428/A dated 3rd lanuary, 1978 with attchments) and agreed to bear any cost "may ovcrrun$ in local curlr.ncy but where the cost-oveffuns became extraordinarily high they be compelteel to aaproach the Bank for a supplementary loan" (lætter No. TYCiBAS12 of 18th January 1978). MAA-0?44s -4- 2.6.3 As it tumed out, the undercstimationof project co$ts couPled with increased by the constnrction quantities, delays occasioned-by -logistical prob.lems brought on Tanzania-Ug-ia. wil, suspensionof work by the contractôr due to non-paymentbf, tfe Govemmeni of forcign exôhange to the contiactor, shortage of imported materials and the devaluationof the faizania shill=ing,all accountedto an increasein the actual-project^costto^L. Sh. 361.55million. The ADF granleda supplementaryloan of FUA 10.85million in-April l9E3 to solvethe financingproblem and to seetd it ttr_atttrgprojggt g€t eventuallY.lompleted.^!he1o1at aOf p"tti"ipution, tËdt"for", stoodar FUA 18.55mitûon (T. Sh. 20_3.76million or 56.3Voof the rnirJO total'projeétcost). On the otherhand, the Govemmentcontribution stood at T. Sh. I57.79 million or 43.7Voof the projectcost. 2.6.4 For a proiect-iipr that was to be completedby July, 1980,it is aPParentthat both the Government and trie *erc slow in finàins soiution to the problan which eventually culminatedin the *ppt.-"ntary loan inApril, l9'8?,that is,3 years-afterthe expecteddate of cornpletionof theprdêct with all the consequencesof costovelruns. 2.1 Disbursemcnt 2.7.1 As a result of the optimisticimplementation sched-ule set .a1gpraisal, ttre estimated disbursementschedule was equaliy optimistiô. Disbursementof the initial-loan-was soPpgtg{10 to Ërp*"a olnrt r*o t;"r., frorir tgTS io t979. tn reality,disbursement could only stan in 1979 "naî igg:, that is, o*t " p€riod of 5 years due io,the delays encounteredduring Project ri of the supplementaryloan was spreadover 3 yea.rs t execution. On ttre otirer hand,'disborsemeni a which is considerednormal. 2.7.2 However,a major"incïuding problem cropped up duringldisbursement..t" Govemmentgnteq for rcimbu6ement .étft"à paytirènts-of io the tontractor in both foreigq "{ t:"tl currencies.As evidencedby the voluni'e correspondencefrom the Contractorto the Bank ot non-Davmentbv the Go.r"r,i*"nt for work perfonried, it was aPParentthat the Governmentwas Ë;iri#;;;iÉ "i r*"ign exchangeto honàurits obligationstô-the contractor to a point that.the contractor threatenedto"invoke a-clause in the contàct to stoP wolt. This would have had causingfurther delays and increases in projectcosts. adverseeffect on thepdect, ::: ii 2.7.j The aboveproblem would not have arisen if a direct payment to the contractorby the Fund *o "gr""à;d th" Càn"--"ttt as one form of disbursement.Aris-!{,f:g^9.^"Tl-t: of the loan should o$r be accepted.by Bank after a close Ëi-"-onr-*t lrocedure fe to examinationof a "ount y', economyand its dcvelopmeltperypeclives to ascertainits ability honourpayments to "onÉ""tors andiuppliers of goodsand sèrviôes in foreignexchange. the other hand, after an initiat delay of six months, the Ftlnd promPtly 2.7.4 On to reimbursedthe Govcmmentfor alt cenificd puyttt nrc. The initial delay of six monthswas due clairns ot ttt"i-âisuïtrirtn"nt applicationforms were erroReouslyfilled i*p-p", disbursement in Ttris calls ror tauncirin! *a rp""i"r aisUuis"-"nt missidnsfrom the Fund to assistBorrowers r""aing properly tilledéisbursêmentapplication forms to the Fund. 3. PROJECTACIIIEVEMETiTTS transPort 3.0.1 One of the objectivesof the projectwasto providean gasielandshorter to the seafor landlockedRwanda tario ttre neighboriring"ft":ect.- countries. of Burundi and eastern link 1989,87Vo Z?ifia), This objectivehas been fully ili";a Uy ttn For the period 1988and respectivelyof Rwand.'r-i*pànr p;r'i"g trirougtrthe port of Dar es Salaamwent by the andg4vo the proiectroad proiect road. For the sameperioa, "ririi*Z""rt i-poft .tt$t transportedon *ai:ruqoand jiEi\i"iiùilffiffii';i*p"n r"riii"n i;t; tnepioject road grew Ëon24?o i"lggo, a year afterproject éomptetion,to 86Vo in 1989(Annex 1). MAA-0244s -5- 3.0.2 The project road is also of domestic importancein that it satisfies the demandfor road transport to haul agricultural input and produce to and from the project area in Tanzania. According to paragraph 5.2.2 of thc PCR, agricultural production in the project area has been ineignificant fôr the frst rwo or thrce years after the completion of the constnrction of the road. ThiJ is explained by the fact that even though the Govemment has drawn up an Agricultural Policy for-the whole country in March, 1983,the economicsituation of the country could not permit a successfuIimplementation of that policy. Hence,the low yield in agriculturalproduction in the project arca. 4 PRFORMANCE EVÀLUATION 4.1 OtrcrdirnalPcrfmancc 4.1.1 The project road has beenconstructed to the qpecificationsthat would enableit to handle thc projectéa tramc. With the completionof the Lusahunga-Bukombergad in September, 1988,and ihe constructionof the BukombÈ-Isakaroad also to binrmenstandard to commencein 1990 as well as the rehabilitation of the remaining sections from Dar es Salaam under the Integrated Road Prograrnrnecurrently under implementation,an all-weathegroad will link the portbf Dar es Salaamto the borderpost at Rusumo.Thus the link Rusumo-Lusatrungayill play ihe role as .ur intemational road as ône of the objectives set at appraisal(see map in Annex l, PCR). 4.I.2 Although the road is fairly well maintained,the shoulden at the borderpostarc being damagedby the heavy trucks which park along the road shouldersand spill 9il ol the road whilè custompapcrs are being processed.The Ministry of Works and Communicationshas drawn the attention of ihe Custom Authorities to the dangerbeing causedto the road and a suggestion has beenmade to thc Ministry of Financeto move the custompost further down the road where concreteparking areaswill be provided for the heavy trucks. Finance is yet to respond to the recommendations. ffic 4.2.1 Due to an optimistic economic growth forecast for the Kagera Basin (Buntndi, ''ri Rwanda and Tanzania), it-was estimatedat appraisalthat Eaffic on the project road would be 1,165vehicles per day in 1985, In reality, actualtraffic recordedon the road in 1985 was 129 vehicles(lLlo)-per day and 180per day(127o) in 1989as comparedto an ap'Praisalestimates of 1,4y''3. 4.2.2 This low traffic has beendue to the worseningeconomic performance of the three countries as a whole but of Tanzaniain particular where the road infrastructurehad deteriorated so much as to discouragelong haul of goodsby road. This was exacerbaiedby lack of spalg parts. Furthermore,agriculrural production neverrcally developedfor reasonsgiven in p_aragraph 4.0.2 above. Nevertheless,the fbrccastvehicle mix given in the PCR, Annex 5, pan.2, for the period 1994- 2004 is just aboutthe sameas the appraisalforecast. The vehicle mix given in the àppraisalreport was 74Votrucks, 14.4ligttt goodsvehicles, 72Vo passenger cars and4.4Vo buses cômparedto 73qo,20Vo, ZVo and SVorespectively. The low rate of. ZVofor passengercars is a rcf,ectionof the growingshift to pick-upsor light goodsvehicles for carryingboth passengersand merchandise. 4.2.3 On the whole, after a rcview of the documentsand data frrmishedto the audit mission (sameas was usedby the PCR mission),the audit missionaccepts the traffic analysisof the PCR. 4.3 Ecmmic Pcrformmoc 4.3.1 Due to the low growth in traffic, the recalculatedeconomic internal rate of retum (EIRR) is 337o with Tanzania traffic only. The EIRR is 35Va when intemational traffic is included(PCR paragraph,5.3.9) as comparcd,to 75Eoat appraisal.Nevertheless, the recalcrrlated EIRR is still acc.petableand manifests the viability of the investmentmade. MAA-02,44s -6- 4'4 ffial Performmæ md De'etoPmcnt 4.4.1 At the time of ap,praisal,the Roads Branch of the Ministry of- V[orks and Communicationswas suffering'from an acute shortqgeof local qngineerscoupled with the ptobla- that conditionsof s"rvicelvere not attractive.However, the Governmenthad underwaya irogramme to train Engineerslocally and abroad. i; 4.4.2 The lack of Engineersduring project implementationhas beenreflected in the slow pro""g of decisiontaking oi technicaliJsùes-which-was a contributoryfactor to the enonnous delayon the project. 4.4.3 The training programmehas made no impact ."{.thg Presentstaffing position of Engineerrepresend;nly7ânËrtn" total requirements(Annex 2). lt behovesthe Govemmentto amelioratettre coniiiioris of servicefor Engiieers in order to retain an adequatenumber of them to -ect the exigenciesof the IntegratedRoà'a Programme and for the furure éxpansionof the road network. 4.5 EnvirqgmÊntalÂsPec{s 4.5.1 Constnrctionof the road to a bitumen standardhas had a favourableasPect on the Both passengersand the population g tlotg the roadsideare sparedthe hazarcls .ttnitonç1".rt. {"it had and the discomfort of dust. The new rôaâ foilo*ed exâctly t[e old alignment aid, therefore, little encroachmenton the environment. 4.6 Pcrfmmmæ of tbc Borrower, cotrætor md consultæt (l) Borrourer 4.6.1 The performanceof the ExecutingÂg.ency.hasng! beenvery satisfactory'-lt Yus were encounteredduring ,i.* i" taling u"ti6i-o" "t *g"r it, the ar1inag"..d.rtgr itren difficulties constnrction.The Borrowernever t"""t"d qoi"ltv eiough to the-shortage.of$nds on.the.prcjqct f.t " top'pf"-""t-y finÀ-"fit g-earl! st$l-^ol projeèt implementationin spiæ so as to search 4 to the Bank' of its lettcr of intent gdf. N;. Tyctgirii;ri ta ruttoâr''y1978) ig .i:.tq addressed contributedin part to the enonnous The slow processi;:;rd ryffig on those nvo aspeéts yiatr in tfrlirnptemeniation__ofthe project. The Borroweris yet to settlePayments a"lui o{+'ItZ Also' the Borrower of US$1.6million to the Coniractorand US$0'1t4 niiltion to the Consultant' iril;ù io efficiently cany out its progïammeof humanresoruces development. (ii) Comactor of the finished 4.6.2 The performanceof the Contractorhas been satisfactgry. The .Wality judgeàt"ra. And wheq ffià;-i;,hr-p-;""t *" out, ïtt" -condactoicontinued with works were loan form ADF constructior,*o*J,ffiigh ildirËft"m his own souriesuntil the'suprplementary becameavailable (PCR, pua. 4.8.2). (iii) Cmsultant judred not satisfactory 4.6.3 The performanceof the Consultant,Italconsult has been (pcR, 4.B.lfli#ffi;;fË t"ï;.;gl.lt p"trotrnung9.yith rfuarato design'While para. Fartners,it shouldhave reviewing the earlier designreports pt"p*a Uy Sy.dlexanderGibb and rÊ of drainagesû:ttctures .i âscertainedo" trr.-ià"qu"Ey oirn"i"iiai i"n"sigati9l, the size and number aesignled to erosion.anddrainage problems and pavementdesign. - Pool prgegt Ë;;;il"ana during ffir*;;,il-ilrti Ëulvertswere initialy.designedinstead of and an increasein earthworks put in place ôf-TÉe er"itttg" *it" inadequateand low embankments big ones; tt e numbei -ttnt"totit for the Contractof higher ;;.. fiaqequaci"t g"u" rise to ionstruction-Prop.{ems insteadof (ii) and(iii))' and contribot"aprîili"iË" a"l"y i"i"ô:".t Execution(PcR, pala'4'5'2 :{ tvlAA-O244s -Ë€ . ;i. .i ii -7- 4.7 Bank's Perfrrmmoc 4.7.t The performanceof the Bank can well be described as T1xegj Seeing_the inadequacyof the tletailedengineering studies conducted by the Consultant.SirAlexander Gibb and P'artnèrs,the Bank rccommendedthat the supervisingconsultant should review the studies beforecalling for tenders,If the review hadbeen thoroughly done, the Contractorwould havehad very little problemduring construction. 4.7.2 Aware of the fact that the project road would play a secondaryrole as an international road for the transit export/impôrt traffic of Rwanda, Burundi and eastemHire to and from thc Tanzaniansea port of bar es Salaam,and in the interestof^promoting inter-regional co-operation,the Bank set âs a condition of the loan, and obtainedfrom the Govemmentof faniania. an assruancethat it would allow a free flow of transit traffic of the three countries. Indeed, a joint commissionhas been set up betryqenTanzania and Bunrndi,.for example,and Bilateral iustoms Agreementhas beenestablished between Tanzania and its three_neighboursto facilitatetrade as weil as the movementof goodsin transitto and from the port of Dar es salaam. This is examplaryand needs to be adoptedby othersub-regions in Africa. 4.7.3 The abovenotwithstanding,the supervisory role played by the Bank during project implementationwas poor. Thc ExecutingAgency ggryplainedvehemently to the audit missionon thii issue. Berweeniroject approvaiin February,,1977 and the grantinqof a supplem€ntaryloan in April, 1983,the B'anlicod?fonly mount onefollow-up andone technicalsupervision missions. Had'therc been more frequent supervisionmissions from the Bank much of the problems-on tl.te project (apart from the war) woutd have been foreseenand appropriatesolutions found for the projectto be complctedearlier and at a muchlower cost. 5. PROJECTSUSTAINABILTTY 5.0.1 The project road is adequatelymaintained at the rromeni. Within the current financial year, thd roâd is going to bê resealedto provide a_stronger and a smooth running surface. liis will enhancesâvings in vehicle operatingcost and reducemaintenance costs. With a continued adequateroutine and pcriodic mar'htenance,benefits on the road will accnreto the rqith cconomy as a whole and to the uJers in particular aiuther F-oyth in trafric, the futury EIRR côUa be higher than the recalculatédEIRR of 35Vo.This could, ho\ilever,be constrained by inadequateminpower resources,lack of equipmentand budgetary.-flocations. lilhile the currcnt frP will goi long way to easesome of dleseconstraints, a lot will remainto be donefor the rcst of the life (15 years)of theproject. 6. CCINCLUSIONS,LESSONSATiIDRECOMMEiIDATTOT.IS 6.1 Cmclusions 6.1.1 The PPAM acceptsthe conclusionsof the PCR. The project has beensuccessfully completed and the quatity ôf the finished works has been found satisfactory.-However, cons^tructionperiod extendddover 7 years,i.e., a delayof 4 Il2 yearsin project implementation due to cost rihderestimationand the consequentcost ovemrns,increase in work quantities,slow decision process on the paa of the Exéclting Agency, shortage_of foreign -exchangeand constructibnmaterials, and, the war betweenTanzarria and Uganda (PCR, section 6.1). 6.1.2 Although the objectivesset at appraisalhave not beenfully_attained due to the near stagnationin agricuituralproâuction in the Kagera Region,the recalculatedeconomic intemal ratà of rerurn 6f 3SEo(when intemationaltraffic is taken into account) and 33Vo(when local Tanzaniantraffic only is considered)is satisfactory. 6.1.3 Technicalsupervision from the Bank hadbeen grossly inadequate. MAA-0244s -8- 6.2 Less@s 6.2.1 The fust objectiveof increasedagricultural productiol in-the project's.zoneof influencehas not beenmci due to the lack of resourceson thè palt of the Govemmentto investin agriculturewithin the KageraRegion. 6.2.2 The implementationschedule set at appraisal-Éxecutingwas too optimisticwithout taking due .rrôottt of the institutional weaknessesof the Agency. Project implementation schedulesshould be exarninedand discussed with tlre executingagency. 6,2.3 The estabLishmentof, and a strict applicationof, regionalcg-operation agreem€nts U"t**n neighbouring countries enhancestrade àna *re movement of goods between these countries. 6.2.4 The paucity of technical supervision from the Bank has contributed partly to the delaysin projectimplementation. 6.2.5 Launching and disbursement missions are essential for a smooth and quick disbursementof loans. 6.3 Recomrrendations 6.3.1 From the aboveanalysis, it is recommendedthat: Forthe Governmnt (i) Govemment should search for funds_to. implement-_1n- agricultaural of the developmentprogramme for the F$"t1 Region for the full benefits road infrastructure to be realised b! the pbpulation within the region in particular andthe €corrofi) of Tanzaniaas a whole; (ii) Adequatebudget allocation should be madeavailable on regular.Uqf qt|: mainienancedf trc road so that it can live its normal economic lilê of ZU yearsto play its social andeconomic role in the impact arca; (iii) during project implementation,problems being encounte-rcd-by 9" gxec;ting Âgtn"f-"ttoutd be pro-mptly communicatedto the Bank for solutionto æ-fouriaearly to avoiddelays and cost ovenuns; (iv) "ffi:;1.ÎffîJ"Ëiff"ffi"ï,1"ffii,$'[l: SJ":ffiîl'*îÏill#ïif to.ens.ure r"rui""t of the -;;A;goatâs should be paid fol-by--bethe Consultants;this is ift"t thorough ro*ei should caried out at the detailed engineeringstage; (v) the Ministry of Financeshould act quickly on the re-locationof the customs post at Rusumoand appropriateconôrete iarking arcaprovided for the heavy trucks; (vi) Govemmentto urgently amelioratethe conditionsof servicefol Engln:ers il orderto retain* i["qou,e numberof themto nreetthe exigenciesof the IRP currcntly being implèmentedand for the future expansionot the roao nehilork: (vii) Govemment should endeanourto settle last payments to both the Contractor and the Consultant. tvIAA-0244s -9- For thc Bmk/Fud (i) In establishingproject implementationschedule, due account should be taken of the institutional capacity of the Executing Agency and whenever possible,technical assistance and training programmesshould be includedin theproject (PCR, para.6.2.1 (i)); (il) Adequate and frequent- technical supervision of projects should be undertakenby the Project Departrnents.On-going projects should be supervisedat least,trrice a year for more Bank involvement,lesson leaming anâ prompt solutionto problemsduring implementation(P^CR, pata. 6.2.1 (ii));- in i:his connectioh, the regional and country offices should be adequaaly slaffed with technical. personnel. to undertake. quarterly supervisionmissions on on-goingprojects to supplementthose of the Project Departmentsfrom the Bank Headquarters; (iii) At the prcparation and appraisal stages of a tranqport project, the Bank should dscertainthat complémentaryprogranune and resourcesare available to for other sectors'Iilheneverthat wilI make the benefits of the transport project be fully realised. possible, the Bank should -instance,provide tectnical and tinrincia assistancein this regard. In ttris particular the Country Programmesand Projects Departnrentsconcerned should examine how the Barù Group can contribute tô financing agriculnrral projects identified by LJI{DPAgriculture Study for the KageraRegion; (iv) Social and economic environment of a country should be taken into consideration in estimating cost of projects to avoid project cost underestimationas against tender prices; (v) Given the problemsencountered with paymentsin.foreign glchange by-the Borrower to Conractors and Consultants,the Bank should insist on direct Paymentsas a more efficient way of disbursement. .: .t I lvtAA-0244s AÎTH I TAIIZAIIIA nusun-usluurreaRoAD (PPAR) GEXERALCARGO CLEARED TOR ZAIRE. EURInITI AIO RIIAII'A 1978 - 1989 I ZAIRE EURU}IDI RTIA}IDA YEAR ! ! ROAIT ! RAIL ITOTAI ! ROAT' IRAIL ! TOTAL ! ROAD IRAIL ITOTAL tl tll ! !! tlI I 978 ! !! tlI 1979 !- ! 58 209 ! 58 209 tlI 1980 !r653 | 51 327 | 52 980 llI r98r !78r8 ! 31 263 r 39 081 ll I r982 !r5 645 ). 23 567 I 39 21? tlI r983 ! 4721 | 44 054 ! 48 775 ll I t984 12257 ! 54 488 ! 56 745 tlI r 985 !- ! 88 750 ! 88 750 tl I r986 !20 500 ! 66 375 i 86 883 tl ! 'r5 r987 t80 622 ! 34 908 ! r 530 tl I r988 ! 32 865 ! 9 161!41 966 !49 184 ! 17 212 ! 66 396 !6s 396 !9 506 !75 354 r989 | 28 422 r I 562 !36 984 !46 099 ! 7535!53634!45 09? t4 18? t49 274 tltl ll ll I . t'lot avai'l ab'le N.B.: 1979to 1987figures were not separatedfor eachcountry SOURCE: (THA) TanzaniaHarbours Authority, Port Statistics, Dar es Sa1aam Date: 5th June 1990 l4AA-0244; AIIH 2 TAIIZA}IIA ruSUO.LUSANTGA ROAD(PPAR) I{IIIISTRY OF HNKS A}TI CfiITNICATIONS FIVE YEÂRSTRAIHI}6 PROGRÂIIf Strff Category Present Fore- Short Estinated ntder of students staff casted fal I staff 90/91 91192 92t93 93194 94195 Enginaers B. Sc. Clvil Eng. r30 265 r35 20 40 60 80 80 B. Sc. ilech. Eng. 50 80 30 r0 15 20 20 B. Sc. Elec. Eng. l0 20 l0 z 46 I I B. Sc. Civil Eng. 30 40 l0 2 44 4 4 11.Sc. Hech.Eng' 3 20 17 ? 44 4 4 l,l. Sc. E1ec. Eng. 2 12 l0 2 44 4 4 Dip'l . Civi I Eng. 20 70 50 l0 20 40 40 40 Dipl. ilech. Eng. l0 20 l0 2 46 6 6 Dipl. E1ec.Eng. l0 z0 l0 2 46 6 6 172 TOTAL EIGIIIEERS 265 v7 282 47 % 153 172 TECilICIÂIIS FTCCivtl Eng. r20 960 840 50 r00 150 150 150 FIC l,lech. Eng. 70 350 280 25 50 75 75 75 't5 4s FTCE'l ec . Eng. 40 120 80 30 45 4s TOTALFTC TECIilICIAI{S ?30 r 430 r 200 90 r80 270 270 270 s0uRCE:ilinistry of worksand conrmunications Dar es sa1aam,July 1990 l,tAA-0244s AtilNE)( 3 TANZANIA RUSUMO - LUSAHTJNGA ROAp (PPAR) CORR,ESFONDH{CEWTITI GOVRNMENT OF TANZAI{IA FOR. COMME{TS ON REPORT hdrqA-0144s .:H:. I ''4 " !::: . a:: JBA,NQUE;AFRICAINE DË DEVELopP'EMENri :," . I 1 AFRICANDEVELOPN,|EruT BANK ANNEX'3 -pagelof2 ^.DREsstE îEt Ecn^'pEiet r ATDEY AATDJAt| TTLI'PHONE gl-rl rs,.€rt nt ttrat tt{l û t-P. rtû - ÂBIDJAII .t coll utvottt The Principal Secretary i'] /'r .?.Q'i l'- Ministry of Communications t6hû'l*:: 7U':t't\" and Works olTtr 16 troveu{rer l99tO RoadsDepartment P.O.Box9423 DAR-ES-SALAAM Tanzania DearSir, RE: PROJECT PERFORMANCE AUDIT REPORT: TANZANIA: RUSI.JMO-LUSAHUNGA ROAD PROJECT You nray plêase find attachedhereto rwo copies of the above report for your review ard conunents. Your corrunentsshould reach us by 14 Decernber 1990, to enable us finalize the report for Board presentation. You are also kindly requested to let us know by rclex at your earliest convenience if you agreewith the views contained in the report and rnay have no further corrurlentsto make, V/e take tti;s oppornrrrityto expressour gratitudeto you anrl your staff for the assistance and counesl' extended to Mr. R.K. HOYAH in the course cf his recent nrission on the above project. Yours Si:ncerely, E. TETEGAN Director OPERATIONSEVALUATION OFFICE cc.: (For infonnation) - The PrincipalSecretary Ministry of Finance DAR-ES-SALAAM Tanziulia - ADB RegionalRepresentative HARARE - Zimbabrve 'smlP}_ 3 page 2 of 2 ', l,'.''..--.-- Jc9 z'+l rz, BANQUTAFRICAINE DE DEVELOPPEMENT AFRICANDEVELOPMENT BANK _€ TELEX Transmlsslon i Ref. : Heure/Hour.: Vofe/Routing Date :27th December1990 THEPRINCIPAL SECRETARY COPYTO: I. THEPRINCIPAL SECRETARY I'IINISTRYOF COMMUNICATIONS MINISTRYOF FiNANCE ANDI.IORKS, ROADS DEPARTMENT DAR-ES.SALAAM DAR-ES-SALAAM, TANZANIA TELEX:41392 UJENZI TZ TELEX:41327 FINANCE 2. HARO ii TELEX:2436 ,i AFDEVH Z}^I , HARARE,ZIMBABI^IE SUBJECT:PROJECT PIRFORMANCE AUDIT REPORT REFERENCEOUR LETTER No. 9039760F 16 NOVTMBER1990 T0GETHER I^IITH A COPY0F THE REPORTMENTIONED ABOVE REQUTSTING YOUR COMMENTS ON THE SAID REPORTBY ; DECEMBERI 3, 1990 YOUART KINDLY REMI NDED THAT I^IE HAVE NOT RECEIVED ANY INFORMATIONFROM YOU UPTO THIS DATI STOP YOU MAYPLEASE COMMUNICATE YOUR VIE},ISTO US SOONESTTO TNABLEUS FTNALIZEREPORT FOR BOARD PRESENTATION STOP REGARDS E. TETEGAN DiRECTOR OPTRATIONSEVALUATION OFFICE .rlfi PROJECI CO|4PLETION REPORT RU SUIIO.LUS N{UIICA ROPO PRCJECT Tl.'.IZe].'ITA ffFRÀSrRUCîURE P.}.IDINDUSTRY DEPARTT4ENT FEBRUARY 7989 EOUIVALENTS ATID ABBRWT ATrONS Currencg Units the Official surreneg Unit in Tanzanja js the Tanzanian ShiITing (Tsh) Tsh 7.O - 7OO cents ABBREI'ITATIONS Æî - Avetage Dai79 Ttaffic TRC - Tanzania Railways Corpotation îA?,ARA - Tanzania-Zanbja Rajfwag Authority THA - Tanzania Harbouts AuLhoritY ERP - Economic RecoverY Ptogtamme NTP - t/aÊional fransPott PoTica ADB - African DeveloPment Bank ADF - African DeveToPment Fund IIUA = Fund llnit oE Accounë l4ow - llinistrY of llotks .SRR - Econoaic Rate of Reêurn VOC - Vehlcle OPerating Cost Nl4C - NationaT lfiarketing Co4nration l{or&s l4octhl - tlinistry of Conntnications and GOT - Governaent of Tanzania EC - Eur o1ean Conntnity FISCAL YEAR JuIg Ist-June 3Oth TABLE OF CONTENTS Page BASlC PROJECT DATA i-ii 7. INTRODUCTTON 7 7.7 The TransPorÉ, Sgstem and Sectot 7 7.2 Bank Group Role in the Sestor 2 7.3 Objectives af the Ptoject 3 7.4 Sources of InfotmaLion 3 ti., +: 3 * 2. ?R)JECT rpENTr FrcArroN ,oID lPPRATSAL ji" 2.7 Identification 3 4 2.2 Àppraisal 4 3. PROJECT DESCRTPTTON 4 3.7 General Description of the Project 4 3.2 DetaiTed Description of the Project l., .ID 5 4. PROJECT T/PLEI4ENîAîTON COSTS 'l' 5 4.7 FulfiTment oÊ Loan Conditions È 4.2 Procurement of Goods and Setviees 5 :4 6 4.3 |4odif ications in Project Design 6 4.4 ProjecL ImPTementation 8 4.5 Project Costs 70 4.6 Project Financing 72 4.7 Expenditure Schedule by Component 72 4.SPerformanceoftàeCon.suTtantandtheConttactot 73 4.9 Performance of the Borrower and the ADF 73 4.70 Borrower's Compliance with Loan CovenanÉ's 73 5. ECONOHT.C RE-g1y.AI,TIATION ntID DWETNPWNTS 73 5.7 Appra i sal ExPe c tations 74 5.2 Project Eftects and DeveToPnents 76 5.3 Re-ca.lctrlaêion of ERR T8 6. colrcl,usroils ÀilD LtSSOilS 78 6.7 ConclusJons 19 6.2 Zessons Transport This Report was prepared bg llessrs, H. IJ|fAI4E-i4EN9NI,Senior sission to Economïst and L.-B La6;çtne, Civiy Engineer, f ollowing a ûay be Tanzania jn June 1988. Further infornaÉ,jon on Éhis Eepo'.t nrsr't) and A'D' obtained fi-on llessts 14.O. ITLAIGA(1HIEF oF DIIIISION, I,TTEGHA(CHIEF OF DT-VTSTON'NCPR.2). TABLES TabTe No. 4.7 ImpTementation Schedule; Appraised Vs Àctual Tining 4,2 Surnmary of Project Costs 4.3 Financing Plans of AppraisaZ and Re-appraisal 4.4 Actual Payments and Financing Situation 4.5 ActuaT Expenditure ScheduTe by Conponent 5.7 ADT and Average Annual Ttaffic % Growth ?.'.INEXES Ànnex lJo. TllapwjthRwandalnternatÎonaTTtanspottConnections Dar salaam 2. Eurundj and Rwanda îraffic through the Port of es Rusuno Fa77 3. InternationaT Traffic to and ftom îanzania via Border Post, 7985-7988 BuntndÎ to the 4. coaparison of Routings ftom Rwanda and Indian Ocean Ports 5. Recalcula tion of ERR (j) BASTLPROJECî DATA 1.Sh l4i77lon t. cos?s lppraisal Reappralsal CorrrPrcrnenë EstiaaÉ,e EsÉ,laatç ActuaI Constntetion 8'7.80 258.83 347.55 Supervision 4.93 77.25 14.OO lotal (neè of Êaxcs) 22=1_t==270.O8 36r.,55 B. INNI DAîA Otlginal Loan Sug?L. Loan Zoan ânount: l'UA 8.O ailTion FUA 7o.85 uilllon Date of À;4Provel: 27 Febntatg 7977 74 ApttZ 7983 Date Signed: 28 l4atch 7977 77 lrag 7983 Loan Effectivencsl; 78 Decenber 7978 22 Jur.re 7983 Loan No. cslTzlnRl77l3 cs/Tiz,f lRf 7713 (svppz.7) Service Charge: o.75r o.75X Repagaent Pariod: 40 years folloning t 40 yeats follætng gtace period oE 7O yetrs t graee Petiod oE 7A geats c. prsBtrRsE[Ettts Otloinal laan SupltZ. laan Deadllne lst disDurseaent 3O June 7978 37 Deeeobet 1983 Deadllne last , disDurseaent 30 June, 7983 37 Deceobct 7985 FIIA l4i77lon ',':P Orl.oLnal Inan Suool. Loan Year .,1, 7979 t.1l 7980 2.97 7987 3.O2 7982 o.59 7983 o.:, 7.77 7984 7.80 ,985 : _7.OO ?.otal 8.OO 1o.57* À withdrawai applleaèton for the balance of tâc loan (mA o,34 u.Î72Îon) has àeen receÏved and Js being procssed by the lD.F. (ii ) D. EXCHaJ.IGERAîE PER FUA Oriqinal Loan Suppl. Loan Àppraisal r.sh 7.977 TSh. 9.467 First Disôurseaent r.sh 9.757 15â 73.O78 Last Disbursernent T.Sh 73.O78 TSh 63.262 E. OTHER PROJECT DATA Àppraisal Reappraisal Forecast Forecasë ÀcÉual Commencement of l,tor&s Jan.7978 June 7978 Conpletion of tlorhs JuZy 7980 Dec. 7983 ltlatch 7985 End l4aintenance Period Julg 2987 Dec. 7984 I(areh 7986 F. Irttssror DÀ.ÎÀ lfo. of Type of t4ission Pêr.son,s Timing Àppraisal 2 7th Nov. 7976 Fo77ow-UP I 7 3td-79th JUZY 7987 Supervision f 1. 4th-20th Dec. 7987 Re-Àppraisal 2 24th June-7lth Ju79 7982 Supervision II 2 Inay 7984 Fo7Low-Up II 7 9th Nov. 7984 PCR 2 79th Junel2nd Ju79 7988 t. TNTRODUCîION 7.7 the lransPort Sustera and Sector 7.7.7 Tanzanla's Tand area (945,OOO sq kn) is the tenth Tatgest in Suô-Saharan Africa. Economic activities are wide7g dispersed around the counttg and Éransport movemenés over Tong djstances ate chatactetjsêic of fanzania's transpàrÉ jnfrastructuie. The transporÉ sectot plags a vitai tole .ln the econoûg. particttlarlg in agricttlture, fot internal distribution and aarketing of food crops as wefl as for export of cash crops .nrcà a.s cotton' a.s coÊfee, tea, sjsa.l and .rugar. The transport infrastrucêute afso serve.s important corrïdors for the external trade of five neighbouring Tand-Tocked the countries: Zambia, Eurund'i, Rwand'a, Ilganda, Zaire and llalawj' Roads are predoninant transPort mode overaTT with railways taking a majot share of the importlexport and international transit traftic. 7.7.2 Tlne transport sysÊer comprises (i) a road network of about' 8O'OOO *rtst li) two railwag sysÊens - Tanzania Railwags Corporation (tRC) operating (îAzÆA) about 2,640 Àas oÊ trach and Tanzania-Zaabia Railway Authority (Jotntly owned bg Tanzania and Zanbia) with 97O hn of track within Tanzanian terrltory; (iii) an ocean porê sysÉeu operated bg the TanzanÎa Hatbours Âurhority 1.1HA), centered on Dar es Salaaa port wità slaaller porÉs aê Tanga potts opetated by TRC on Lake 'r':it and l4twara on the Jndian Ocean; and iv) -Iafte :19, Tangangiha, Lahe Yictorla and on Lahe Àtya.sa. Additiona7lg, there are two Lnternational air1rcrÊs and ovet 50 unpaved air strips, A ptpelÏne carries cntde oi7 îrom Dar es Salaan to l{dola in Zanbia. 7.7.3 The transltorè sector has deterjorated over a nuobet of gears. The js eondltion of aost rural roads in Tanzanja is pooc and ttansg]€.tt to vilTages to both difficttlt and costTg. In aang area.s, transport is fargely restrict'ed an the drg sea.son. Sinilarly, the trunk road networÈ àas detetiotated to sucâ exêent that onTg a.bout 40% of tàe networÀ is in good eonditiont sêvêEê7! goods' l.ncreasïng the cosÉ of ttansport and cartaiTing Êhe ûoveûent of haulage fntcking, rrhich carrJes over 70% of toëal doaestic traffic, including due ta of a1l agticulturaT produce from the ruraT âr.€âst has deteriorated ptoc-ur,e ^sPare lack of foreign exehange to teplaee the aged' fTeeê as welt as to condition' parts and É.gres jn order to majnÉain the fleet in ntnning of parastatal Inadequate truching eapacÏtg and 7ow opetatÎona| efficiencA ct'ping with the tracking fleets âave prevenLed the trucking sectot fton jncrease in agtianltutal ptodttcLion' 2 Tocated to carrg the majotitg 1.L.4 The railways, which are sttaLegicalTy goods are onTy abTe to ptovide 30% of the of the Tong distance domestic goods, the are unaDfe to adeqwaLelg accommodate movement in the countrg. The ports nor compete effectiveTy against other inport/export traffic of t'he country, regionaTportsfottransjttrafficoftheneighbouringTandTockedcountrjes. infrastructute and the unsaÉ isfactory The deLeriorated state of the ttansport operationalefficiencaofthesectoraresLaTTingtheProgressofthe Government,sEcanomicRecovergPtogramme(ERP).Giventheencouraging resPon.seoftheproductivesectortotheGovernment,srefotminitiatives' utgentimprovementstothettansportsystenmustbeuadetoÉransfaÉ'e effectivelgLheeffortsofothersecLotsintoeconomicdevelopmentotthe countrg. Seetor 7.2 Bank Groul Role in the tn, for the Transport Sectot has approved seven Toans 7,2,7 îhe Banh Group Rusumo-Lusahunga Road oE the two loans fot the Tanzania. Befote the approval was approved for the amounÊ of UA 4'O uillion project, a loan in the F|ingogo-I4.asasiRoadprojecLinI.gT4and'inTgT5aJoanofFUA5.onilTionwas extendedfortheTenBtidgesPhaselproject.îhel4ingogo-|4asasiRoadwas openedtotrafficjnT[TE.À.suppleraenLaryloanjntlreamountofF|JA3.95 'IillionwasapProvedinTgS3forthe7:enBridgesPhaselptojectduetocosë overrunsandÊheprojecèwasconplet.edin7985. tvo loans which ate aimed the Banh Group apptoved 7.2.2 In 7986 and 7987' a:addressingso'Ieofthecurrentneedsotthetransportsectorin?anzania. rheprojectsaretheTanZamHighwayRehabjljtationptojectçUA79.2r,il7ion) and transport GllA 37'o Loan for Agricultute and the Sector Rehabilitation niLTion). T.2.3TheADFToanfottheTanZamHighwagjstofinancetherehabiTiLaLiotl oftwosecÉ'ionsalLbehighway(aàout73ok'.)includingconstrllctiotl supervision.TheSectotRehaDiljÈationLoanisforthetransportand agriculturaTsectors.F,UATZ.anilTjonjsearmatkedforthetransport,sector, ofwhichriUA6.onjl]ionwillgoÎntoassistingtheTRcandFUA6.0miTlion wiTTbedevoLedtothetruckingindustrg,j.e.fortheptoc-utementofZoQnew t.rucks.Ineffect'theselasttvoTbanstoTanzaniainthet'ransporèsector aregearedtowardsheTpinginprovetransportationassetoutjntheERP;andefforts' BoLh of poricg anc other donor generar governmenL are in rine with 3 the ?oans are in the procurement stages and the construct.jon worft.s and the deTiverg of goods have not yet starLed. 7.3 Objectives 7.3.7 The folTowing were the projecL objectives.' Firstly, the road wa.s expected to encourage agricuLtural production in the then l{est Lake Region (now Kagera Region). SecondTg, the road was Éo provide an easjer and shortet transport Tink to Éhe sea for landTocked Rwanda tlran through Uganda and Kenya to the port of lloraôasa or through Burundi to the port of Dar es Salaara (Ànnex 1). Îâus the road is not on79 an important trunk road but a segaent of the inêernational rouÉ.e between lanzania and Rwanda. 7.4 Soutces of Information 7.4,7 ?àis report js àased on a field mission, review of the appraisal reporè (1976) and éhe.subsequent re-appraisaT reporL (7982); Toan agreements, corre.spondence wjt.h the borrower; int.ernal Bank memoranda on projecÉ issues as contained in the reLevant fi7es. Bank staff and borrower officiafs associated t^ritfi the project and representaÉ,ives of the concerned eons-ulting firm and contractot have been con.sufÉed and interviewed for the prepatation of this teport. In addition, the report also u.ses inforaation/data as contained jn recenÊ sêudies, e.g. Bukombe-Isaka Road, FinaT Design Reporë' John Burrows and ,,'J Partners for FACan, April 7988; and l4uyinga (Burandi)-Robero-Ngara-llyafta Sanza (Tanzanîa), SËDES, fot EC on behaif of Governments of Tanzania and Buntndi. 2. PROJECT IDENTIFTCATION AND APPRATSAL 2.7 fdentifieation 2.1 .7 In 7975, the GOf approached the Bank Group far a loan for the consêruction of the secÉion between Ru.çumo and Lusahunga. fÉ was as.sumed aÉ the time that Éhe other two secÉ,ions of the road: Zusaàunga-Bukonbe and Bukonbe-Isaka would be financed bg the EC and t/5À respectivelg. 2.7.2 lusahunga-Bukombe and Bukombe-fsafta. the nev toad was to replaee É.he tlren existing road which wa.r a non-engineered graveTlearth road with 4 numerous s'ramp crossings which made iL barelg passable to vehicle traffic durinÇ the raing .season. The design documenés comprising detaiTed engineeting reports and tender documents were ready in l4arch 7975' :il 'j. '; 2.2 Àpprajsal ': 2.2.7 the Rusrrmo-Lusahunga Road project wa.s aPpraised in Novenber 7976 and jn February the ADF Board of Directors approved. a Toan of F'IIA 8.OO miTTion problens 7977. However, the imptementation of the project encounteted sevetal of the such as the war beLween ltganda and Tanzania, a need for redesign to delays of drainage works, shortage of fueT and raiT transport, etc' leading the construction worfts and to considerable cost overruns. the project which 2-2.2 These deveTopmenÉs necessitated a re-aPPtaisa.l of of FUA 70'85 aÏ77ion took pTaee in JuTg 7982 resttTting in a suppTementaty Toan which ita.s apProved by the ADF Boatd' in AptiT 7983 ' 3. PROJECT DESCRTPTrON 3.7 Genetal DeserLPtion of the Ptoiect 3.7.7 fhe ptojecÊ consisted of: l)theconstructjontoatwo.Tanebituaenstandardoftheroad (g3 7 kn) vith 6 '5 m wid'e between Ru-trrno and lusahunga ' ; carriagewaY and 2 x 7'5 n shou Tders; of design and supervision of ii) consttltancg services for revïes constnrction r.tor&s' 3.2 excePâ neat Lusahunga where it 3.2.7 The new road follows a nert alignment has resulted in a shortening oÊ follows the o7d alignaent. The new alignaent the coad by 57 tu. and has an a speed of 70 knt Per hour 3.2.2 The road is designed fot are a5 of the roadwag and the p foTlows: 5 20 cnt aecotdÏng to the .sub-base vatging between 75 cm and gualitg of the sojl; cm; base course of uniform thickness of 75 2 to 2'5 cm thick' a doubTe seal bj tumenÏzed srrrface dressing, such a ttag è.s to divett the waLets 3 .2.3 The drainage has been designed in the toad bg directing the waters rannînE down from hills away from the body of downstream through box culverts and pipes' more extensive than tnit'iaL79 3.2.4 The consulting servjces became some ot the drainage sttuctures' anticipated due to the need' fot tedesigning 4. PROJECT TI4PLEWNTF'TTON N{D COSTS 4.7 FulfiTment of Loan ConditÎons )n by the NF Board on 27 Febraary Toan vtas approved l 4.7.7 The originaT : 7977.îheToanagteeûentwassignedon2S}tarchT}TTandtheGovernmentot precedent to Êirst disbutsement befote Tanzania rulfil7ed the Toan conditions effective' 78 Decesbet 7978 when the loan was declated was parê of a supPteaentary finaneing 4.7.2 The sapplementary .loan which Board jn Tanzania' rtas approved bg the ADF of four (4) A-DF'financed projects wa's signed on 77 t4aY 7983 and the Toan on 74 Àpril 7983. The loan agteeaent 7983 disDursenent were fulfiTled bY 22 June conditions precedent to the fits|- effectÎve' uthen the suppleaentarg loan wa's declated 4.2 Proc'urement of Goods and Sertlces Constntetion wa.s subjeet to international competitiwe 4.2.2 the constructjon contraet The the ADF gruidelines for procttement' biddÏng (rcB) jn aecord.ance vith in in the fanzanian Pre'ss and e/a's prequalif;,ication noLice ,,'as adverëised ten the eTigibre counêries ' Tota779 ad.dition sent to enbassies represenLing of them appried for prequalification' six firns from five erigibTe courtrjes 6 represent ing four eligible countries were preçytalified but onTg three of these firns .submitted tenders which rvere received in September 7977. The contracL r{a,s awarded to }lessrs.. fmpresa DeI Benaco of Ita79 which had submitted the lowest evaluated bid, Î.he construction contract was signed in l'lag 1978 , the Reports of the evaTuation of the prequaTifications appTications and the subsequent tenders vere subnitted to the ADF b9 the exec:ttting agencg' I4inistry of l,lorks. The recommendations were agreed by t'he ADF ' Supervision was catried out in 4.2.2 The appointment Of the sttpervising consultanÊs conswltanês' In a77 seven accordance with the ADF gaid,eTines for the use of prcposals. Four of, fjrms from five eligibze countries were invited. to stbmit them were the cons-ulÉants É.hese fjrns responded ta the invitation and among contracÉ rvas awarded to the who had carried out É.he design of the works. The firm,rtaTconsuTtofltaTg.Theexec.utingagerlcgslbmittedatePorttothe justifying the seTection of ADF about the evaluation of the proposals fta-ZconsuTt and Lhe ADF agreed with the seTection' 4.3 Hodifieations in Proiect Design 4.3.7 Subseg,uenttotheawardoftheconstructioncontract,itwasfound dtainage worfts suôsÉantj a77g ' Ïn ,rece.s.'arg to revise the desigm of the earTg stages of constntction that the addition' it was discovered during the was inadeguate ' The voTume provision in t.he bill of quanti ties fot eatthwor7|- had and teplaced wiLh seTecèed ti77 ar poor srrbgrade which had to be removed excavation in tock' .been grea tJ.y underestinated as had the 4.4 Proieet ImPlementation 4.4.7 lîheresponsiDÎTitgfottheadministrationand'execlltionofthe projecLwasundertakenbythe}tinistryofÙlork.s.TheResidentEngineerofthe fot the dag-to-dag execution and supervising consul tants, wa5 re.sponsiàle in accordance with the project apptaÎsal supervision of the worÀs. ?hjs was report. fmpi ementa t ion Schedule 4.4-2 The imPlenentation scheduleptoposedinèheprojectappraÎsal report, the revisjons naCe at thetimeofthere-appraisaloftheprojecLand in TebTe 4'1 beTow: t/re .rctua779 achieved schedrrle are shown Table 4.7 Implementation ScheduTe - ApPtaised Vs Actual Timino AeLiv îtg Appraised Reappraised ÂctuaI 7977 Loan approved bY ADF Februarg (OriginaT Toan) llov.7982 ApriT 7983 (Suppl. Toan) 1977 Invitation to ConstlÉants Itlarch Attgttst 7977 i Consultants Recruited 'l 7977 'at, Invitation Lo Tender Harch 7977 June 7977 lenders Received June 7977 Septenber Àward of Constr, Conttact Dec. 7977 Hag 7978 7978 Comnencement of ConsLt.Works January 7978 June ltarch 7985 CompTetion of Constr. Wotks JuTy 7980 Dec. 7983 7986* End ttaintenance Petiad Ju79 7981 Dec. 7984 I4arch period fot the ritst tc The road was handed over in sectjons. The maintenance handed over sect ion ended in October 7983 ' mote 4.4.3 À.s could be seen ftom table 4.7, the ptoject took considetabTg of apptaisal and time to cotnpTete than rtas. envisaged both at Éàe time ptoject implementation re-appreisal. the majn rea.sorLs for the delays in the mag be summarized as foLLot'rs: flve month i) ?ihe caTling and eva.Iuation of tenders resulted ln a :i d.e7ag in the coÎlmencetrlent of the construction work's; 1i :-: was faced jj) During the earTg stages of the project, the contraetot ;1 vith erosjon and draÏnage probTens due to inadequate drainage .â It sÉrucÉure.s provided f ot in the contract d'ocuments. necessjtated a rer'jsjon of the design of the dtal'nage structures additionaT and a variation order was isnred fot revised and dr a in age,structures,' Tanzania-uganda war in Novesber 7978' iji) wiêh the onsec of the ': to the vtaî .i:t re.sources such a.s means of transpott were diverted ApriT 1979' the effort Àlthough the conflict wa.s tesoTved in as Éhe Tong-Lerm consequences cor the ptoject wete considerbaTe, Tanzania' war contribuled to a deterioraLion of the economg of of the economic FoTTowing the war a Progtessive worsening Tubticants and spare sjtuaLion resulted. in Éàe scercitg of fue7, .'f I parts from the 7oca7 markeÉ necessi tating buTk orderlng of such items from overseas aÉ an advanced stage of the project. The generaT probTeu was furthet coraPounded bg the projecÉ's isozated position in reTation to the aain distribution cenêres of Tanzania; and be insurficient iv) :Ihe lnitial financing of the ptojeet was shown to jn the petcentage both in respect ot the totaT amount as wefl as increased of foreign exchange. The total guantities jncrease woths' eatthworhs and suDstanÉ,i a779 due to În drainage rockexcavatjon.Thepercentageofforeignexchangefinancing etc ' could' not be became insuf f icient 4.5 fuel , sPare parts ' be imported by the bought jn the 7oca7 matket but had to The probLem of contractot and paid fot in foreign surrencjes' insufficientforeignexchangefinancingwasoneoftheuajot factorsconttibutingtothedeTaysintheptojectimplementatjon. 4.5 Proieet Cosës in November 7976 was TSh 86'73 4.5.7 The LotaT cost of the project apptaÎsed the re-appraisal in Juzy 7982 the mirrion (FUA zo,Bg aizzion). ÂÊ Éhe time of to TSh 27o'o8 miTTion (FUA 30'25 estinated cost of the project have increased clajms amounts èo TSh 367'55 nlTTion). The acÉual cost including unsetLTed is show'n in tabTe 4'2 belov: mlTlion. À.suDnarg of the ptoject cost, deÊails Table 4.2 Sumarg oÊ Proiecë Costs (in f5à nilTion) Àppraised Re'aPPtaised Estimate AetuaI Component Estinate 258.83 347 .55 Constntction 87.80 77.25 t4.oo Supervision _4.93 t=l=l==u=u= Total (net oÊ taxes) 86.73 27C.O8 3====== of èhe that contribuèed to the escalation 4.5.2 îhere are five main factors a're: cost of the ptoject' fhese factots ANNEX 5 Page 3 of 5 TANZANIA RUST'MO-LUSAIiI'NGAROAD PROJECT - PCR Re-Catculation of ERR (Tanzania and International Traffic) (TSh. Million) Capital Maintenance Net ïear Costs (l) Costs Q) Benefit s Benef it s 1978 39.80 (3e.80) r979 31.50 (31.s0) 1980 49.00 (4e.00) r981 65.00 (6s.00) 1982 52.70 (s2.70) 1983 97.70 (97.70) : - l 984 58.30 ' (s8.30) r985 L9.20 3.00 234 211.80 1986 L2.98 3.00 272 256.00 1987 3.00 332 328.9 1988 3.00 328 324.6 r989 3.00 334 330.6 l 990 3.00 346 342.6 I 991 130.60 361 230.6 1992 3.00 377 374.2 r993 3.00 388 384.9 ' 1994 3.00 398 394.9 I 995 3.00 474 470.5 1996 3.00 502 499.5 1997 I 30.60 529.5 398.9 r998 3.00 555 s52.2 r999 3.00 585 582.5 2000 3.00 615 612.8 200I 3.00 649 646.5 20a2 3.00 678 675.5 2003 130.60 711 580.5 2004 3.00 743 740.I ERR - 327" Capital costs,ln constant 1986 prlces 2. Presently, the MOCWdo not have any guidance on che computation of funds to routine and periodic maintenance. The existing practice is centered on the allocation of routine maintenance.funds, not in general forn, but on regional basis. The factors considered included traffic volume, road condition, length and type of surface. For each factor was weighted to arrive at regional allocation of funds for routine oaintenance. other studies which concern this subject include the 1980 Louis Bergef study; the recent sedes study and the sRL study. Ttre results of the sRL is adopted, since it is recent and Èakes into account.the average cosÈs for the maintenance of gravel roads and double surface treaËtrent roads (1985-1986) which have been increased to take into account the Tanzanian shilling devaluatiop etc. Ihis has further been updated to present prices and naintenance cosÈs adopted are (updated l9B8 prices): ANNEX 5 Page 4 of 5 Re-Calculation of (lanzania ËRR and International Traffic ) !{aU!"""""g Present Condition lg.tqre Condition Routine l.laintenance TSh 60 '000/kn lsh 30,000/km Periodic Maintenance TSh 650'000/km lsh 1400,000/krn Periodic Years . 5 years 7 years c.l <) C> r\ O \O rn \O C\.1 l\ -Ëlc{ ô{ ôt c{ ANNEX 5 Page I of 5 *lslo .t F{ .s F.. '.'1?é rn .t rn tô t^ î, trl @rt\@|\ (/)1(ol o o o o o cjlorl o o o o o aâ Ô\OO\O(vt zl>looooo f\\O\O.tl\ F{l | ë.] cn r^ o @) o >lt{l \O c'l t/l t\ .Ê{ ,lÉ I EI !J ul u, t{ O0l\oor(ndd t{ E trl .f ô.1 \O \O ô{ ol z J4 N c'r r\ c! (.)À t\ F:l av, à@ 'O trt'll Ol ojlo æoa TJ (u ç.-{l{ (/) 0, qt 'e1 OÊrFu., !J oq, Lta AE tt !T =9cJ.r{ 6(oC.)(J(,J r{El..1Gt o ê.È2!ËçA Êr. aa(:(!.rc.-'r v, 3Jt ô0 E è0 € É, .y 6r!t'Fi.r{o rr' ce=vH çtr a,n llttl '4 F3 2 e-c co c o0 cI H 11'l ?- -(-'l it> .1 a1 .D a cl .j-.:;J--: tLI AI'INEX5 ragEF s TANZANIA RUSWC-LUS$UIJGA ROAD PROJECT - PCR Existing and Projected Normal, Generated and rnrernational Traffic Normal Generated InternaËional Traffic Year Traffic (1) Traffic (2) I 985 44 7 78 I 986 9l L4 37 5 198i 110 L7 47 6 I 988 lt3 L7 38 7 I 989 116 T7 40 7 l 990 120 18 42 7 1991 r24 19 44 8 1992 128 l9 46 I I 993 t32 20 48 9 1994 136 2L 50 9 i 995 L43 22 53 l0 I 996 150 23 56 10 1997 158 24 59 l0 1998 166 25 62 t1 1999 174 26 66 ll 2000 182 27 70 L2 2001 191 29 74 l3 20a2 20L 30 78 13 2003 211 32 81 L4 2004 222 32 85 L4 (l) The normal traffic found in Tanzania between 1985-98 is the actual counts undertaken by MOCW. These ate 7-day counts for 1986 and 1987 and a 365 days count for 1985. For this period the traffic cooposition lrere L7 f.or passenger cars;402 pickups/tcv;502 Trucks and 92 8uses. For the period 1988-1994,a .32 traffic growth is anticipated while froro 1994 a 5 percent grodth is projected. It is assumed thet by 1994 the Bukombe-Isaka sect:.on would have I been completed. Thus between 1995 and 2004 the vehicle rnix is expected to .{î be cars 2Z; LGY 2073 Trueks and Buses iç' 732 52- 'ii (2) Generated traffic is assuruedto be about L57"of the normal traffic for Tanzania local total eraffic. In the economic analysisr 50Z of the generated traffic VOCsavings are attributed as benefits to Èhe inproved road. (3) Basic traffic data used to predict the future B.wandainteruational traffic is based on information collected at Rusrlno Border Crossing in June 1988 (Annex 3 ). Betr^reen1989-f 994, a 37. growth rate is assuoed çhile after 1995 a 5Z growth rate is predicÈed till 2004. These growth rates coincide with the opening of the Bukombe-Lusahungasection at the beginning of 1989; and the completion of the Bukombe-Isakasection by 1994. The traffic is assumedto ge rnainly heavy goods accounting for about 802. (4) Burundi traffic is based on current study by SEGESand it is nainly. heavy trucks. Based on existing truck counts and oÈher growth rates (export-imporÈ trade etc.), an annuaL 57"growth is anticipated for the Burundi international traffic. Of this total. Burundi traffic is about 2A7"as shoçn and it-1s erçect,ed to use the central corridor path of Lusahunga-Bukombe to reach Dar es Salaan. 9 i) Ilnderestimation of Construetion Prices ':i , !; The construction contract signed in l4ag 7978 for an amount of TSh 734.57 miTlion and Éàe jnitial contract, for the con^sultancy services q/a.s for TSh 4.42 mi7lion. ?hus the total contracted cost at the start of the construct.ion h'as TSh 738.99 miTTion coapared to the TSh 86,73 niTTion estinated at the appraisa.Z. ii) Inereased Constrttetion Quantities Reference àas previously ôeen made to the revjsion to the drainage design (para. 4,4,3) bg increasing the size and number of cuiverts and other drainage sÉrucÉures. The addiÉionai cosÉ of the drainage jtens was fSà 77.o mi77ion. ÀIso there wete considetabTe jncreases in earth and rock excavation quantities which added a futther 15h 38.8 miTTion to the earthworh-s biL7. The initiaT contract costs would have risen Lo î Sh 794.79 miLTion it the additional guantiÊies had been included in the É.ender documents. fii) Delaus Reference has been made to the deTags that the construction contractor experienced and which in suwary were: a) the diffisuitjes of Togistical suppnrt for the project; b) the increased wor* of excavaÊion in str'anP.s and tock and of the drainage; c) tàe suspension oî wotk due to non'availabiTitg of foteign exchange to the contractor; and d) financial gap due to the need to arr.a,nge finance to bridge É,his gap. îhe cost of these delags contributed to the priee escalaÊjon of the ptoject and 7ed to justified clairrs bg the contractor. rn addition, the delays jncreased the cost oE the constrwction .supervision due to the extended period of supetvision. 10 tv) Non-availabiT itg of Imported l'laterials Àê Êhe time of tendering, imported aaterials and.rpare^s arere readilg avajlable in Tanzania and because of this condition the contractor agreed to take onlg 57% of the paynenÊ,s in foreign exchange (US Do77ar). fhis situat.ion changed drasticaTTy Later as the counLrg's Tach of foreign exchange req'uired the contractor to arrange tor the iwportation of materials, fueT and.sPare parÊ,s. Theref ore, the percentage of foreign exchange vta.s jncreased to 75% for the suppTementary 7oan. ATthough this factor theoreticalTy anly influenced the propottion of pagments în local currency and foreign exchange respeetiveLy it contributed to the -increase of the overall cosÉs a.s t,he lack of foreign excâange financing caused su^spension of the eonstructÏon worÂs resulting in justitied cfaira.s from the conttactor- v) Devaluation of the Loeal Curreneg ?.he devaluatjon of the TanzanÎan ShiTTing against the US dol7at jn âas also contributed to the inerease of the costs a^s exPre.ssed Tanzanian Sàillings (îabLe 4.2). The crtrrency of the consérustion contract sta.s Tanzanian SàiIIing and tàere sta's no fixed a)rrencA exchange rates stated În the conttact. Therefore, it wa.s agreed froa tiae to tirre to jncrease the Tanzanian Sluitting amount of the porÊions oÊ the paynenÉs wlrjch was êo ôe paid în foreign exchange ($S dollarc) in order to contpensate the contractor for the devaluation of the Tanzanian Shilling against Êhe us dolfars. A great pottian of the difference (Tsh 90.86 nilTion)betureen and the acÉual cost and the estjaates made during Éhe re-appraisal are due to thÏs factor. 4.6 Proieet Finaneing and the 4.6.7 The tinancing arrangenents warked out duting Éhe apptaisal f,rom re-açtpraisal of the project are shown in table 4.3 belaw. À's can àe seen foteign exchange the tab7e, the originaT ADF loan was intended to finance the r+'ou]d f inance ëhe and. part of the 7oea7 cosÉs whiTe the Govetnment of Tanzanja ôased on the remaining 7oca7 co.st.s, The supplernentary 7oan, however, wa't 77 assumption that the ADF would finance the foreign exchange cost only and that the Governaent was Èo shou2der a77 the Tocai cosÉ. f able 4.3 Finaneing Plans of APPraisaT and Re-APpraisal (in rSh nillion) Appraisa1 -Re-Apprai sal ------Source F.E. L.C. Jota'l L Source F.E. L' C. Tota'l A ADF 52.61 I I .16 63.77 74.0 AoF ori ginal I oan 63.77 - 63.77 26-s GOT Tota'l 52.61 34.12 86. 73 100.0 ori si nal 'l (net of oan - 22.96 22.96 9 .5 taxes) ADF suppl. 'l oan 96.29 - 96.29 33.6 GOT suppl. 'l oan Total 160.06 110.02 270-08 100-0 (net of taxes) 4 .6.2 The actual financing si Éuatjon js .shown ln tabTe 4 .4 be7ow. TabLe 4.4 Àetual Pauzrent and Finaneino SiÊuation (in "5à miTTion) ------tons t ruc ti on- -supervi s i on- ---To t3'l _- Source F.E. L.C. Iotal F.€. ll Tota'l F.E. tlQ Total I AOF 195.12 l9s.l2 8.64 - 8.64 203.76 - 203.76 56.3 @T - 109.04109.04 - 4.35 4. 35 - 113.39 113.39 3l '4 To be paid 39.42 3.97 43.391 0.95 0.06 1.0! 4.37 4.03 44.æ'- 12.3 Total 234.54 U3.01 347.55 9.59 4.41 14.00 244.13117.42 361.55!00.0 ( net of t axes) * lncludes TSn 75.89 niTTion of conttactor's elajrrs wâjch have not get been jn settled and. 1.sh 27.50 nciflion which has been approved for payment foreign exchange but has not yet been paid. 4.6,3 91he Government of 1anzania has already aeknowLedged that it owes the paid contraetor the eg.uiva.zent of TSh 27.5O miTTion (u5$ 7.67 niTTion) to be 75'89 in foreign exehange. To this shouTd' be added possiôIe pagments of T'Sh the aiTTion to tlle contractor for cTaim,s not Vet settTed. In addition pottions of consuJ tants have not get been fu7ly paÎd.. Î.he foteign exchange 72 miTTion to be settTed b9 these cownitrnents and clairns amounÉs to sone FuA 2.O of the s.upplementarg Toan GOr. Thus, the baTance of F'IIA o.34 miTTion Teft wi77 not be sttfficient to which js being processed Êor pagment by the ADF provideaTTtheforeignexchangerequiredandtherestwiTThavetobe financed by the GOT. 4.7 expenditure scheduie bg eonponent' 4.7,I Tabke 4.5 beTow gives the aetual TheÀppraisalandRe-Àppraisalreportsd.id'not'showaforecastofthe is not possible ta comPare the forecasted expenditure bg cotnponent hence, it and actual exPenditwte bg gear' Table 4-5 Actual Exoend itute Schedule-bgr Cotaonent (in TSh aiTTion) '1985 '1978 '1979 '1983 1994 1986 Tota'l Comoonent l98O l98l !g82 '15'22 347'55 44'25 7g'g7 46'75 l2'13 Construction ?7 -29 24'07 42'OB 55'79 'l'75 3'ri 2'07 1'01 0'85 14'00 Supervision 0.96 i'27 t'16 -1'79 aO'Oq 83'11 48'82 16'23 12'98 361'55 Total 28.?5 25'34 43'24 fl--59 (net of taxes) Contractor '11t,8 Perfotmanee of the Consultant and Consultanê fêalconsult supervising consnrlÉant' 4.S.T The performance of the satisfactorY. Contractor 4.S.2Thecontractor,Impresade|BenacoperrormedveTlconsidetingthe The firm made t,he execution of the worfts' difficuTties encounteted during exchange for btidge worfts bg artanging Eoreign effotts to continue the ADF Toan' thus the paÏd from the suppTementaty financing while waiting to be He was aTso abLe any danages fot late conpTetion' conêracf,or wa.s not 7evÏed toproducegoodqualÏtgrror&sinspiteofshottagesofbitumen,cement,ete. 73 4.9 Performance of the Borrower and the ADF thtough the executing agencA' 4.g.7 The project Yyas monitoted by the Borrower it coufd be concluded that the the l4inistry of l{orks. with hindsight., the need for additional foteign Borrower should have responded more qvicklg to remembered that the financial exchange financing. Hawever, it rrusÉ be verg rapidlg aftet the war with Ilganda and ,,i position of Tanzania deteriorated- l the seriou'sness of the counttg's i* it is 7ihehy that it took some Lime before :t: the Government of Tanzania had foreign exchange position Decame evident. and Éhe con'suTtant the toreign before the war been able to pal the eontraetor ask the ADF fot reim'bursement' exchange portion of each certificate and Lhen jt js the conttact petiod' possibTe rf this situat.jon had prevailecl throuEhout nece's'sary bridge financing untiT thaÉ the Government couTd have at-tanged the Éhe snppl ementat7 ADF Toan had been granLed' the need tot revised drainage 4,g.2 The tlinistry of works did not handTe geL the previous design consufÉarrts design weII. fime was wasted in trging to !4inisttg should have teacted more to modifg their design. In addition, the quickTgtotheneedforaddit'jonaTfinancingduetoÉheinitiai prices and the jncrease in Lhe drainage undetestisation of Êhe consÊruction ernd exeavation worfts. rir :r] ââ,r ari rn tO the TOan adminiSttatiOn Of 4.g.3 ?he ADF did' not pay sufficient attentic and one technicaT supervision aission the projeat.. onTy one follaw-up mjssion the s-upplementarg Toan' It is y[{ere undertaken unÉil the GOT reguested for ADF to the f inancing ptoblens would have JikeTg that a quichet re.spon.se by the resulêedintheproject}ravingbeencomp]etedeatlietaÉaloyercosÉ. 4.70 covenanÉs' 4.7O.1 The Borrower has compTied utitlz a77 loan 5. 5.1 Aopra isal ExPeeta êion'q 5.T.l.TheprojectroadisTocatedintheKagera(previousTgWestLake)Region oflanzania.Theroadformspartofthemainrott!'.econnectionbet'*'eencentraL r^-itir Lhe Djstrict' Bururrdj and Rwanda Tanzania and the Kagera RegiOn, Ngava 74 port of Dar ec; Safaam. Agrieulture js the majn economic aetiviLy of the regian and contrjbut,es t,owards the major exports of coffeeo cotton, sugar and t: maize, banana.s, fruits, vegetabTes, and Tivestock of faod crops of tice, ç cattle, goats and sheeP. 5,I.2 fn es.sence, the project road ûra.s expected to transport not on79 the agrlcuTLuraT produce of the Ragera region, but afso Lo heTp in the expott/import of goods fromlto Rwanda and to.some extent from/to Burundi. pcacticaTTg a71 of Rwanda's exports/imports were moved by toad north through Ilganda to Kanpala and t,hen carried by raiT to the port of llonbasa in Kenya. Lake ÂIternativelg, the rouÉe from Rwanda was south bg toad thtough Buntndi to to Tankangiha, bg boaë to t.he railhead at, Kigoma in lanzania and then by rail Dar es Salaarr (ennex l). route and serves 5.I.3 The project acts as êhe centraT corridot aTternative via the deveTopment to Tink Rwanda and to some extent Butandi to Dat es Safaan to join the rail or the road fron Rusumo to Lusahanga and TaLer to rsaÀa js to be of domestic service to Dar es Safaaa. The project road consjdered ptoject road thetefote and inÉernaêional iapottance. îraffic demand for the transport to haul depended on two factots, namely, demand. fot road ptoject area in Tanzania and agricultural inpuÉ and produce to and ftom tàe RwandalBurundi' second, the iupott/expott Êransit traftic to and ftom totaT traffic on the ptoject 5.7.1 Àt appraisal it was forecasÉ,ed that the diverted from existing road woul d be nade up of about 84% Rwandènese traffic appraisal assuaed a traffic routesi and 761 Tanzanian t'raffic' The truck's' pick ups/LGll car's and composition of 71',, L4.4%, 7.2% and 4.4% for the toad wa's expected to be buses respectively. thus, b9 7g8o, when with an average growLh rate of 5'5% compheted. an ADT of 897 was forecasted of the ptojecL's Tife in 7999' per dnnum, growing to 2,465 v.p.d. b9 the end 's ttaf f is was incTuded; and 25% if the ERR v,,as calsu Tated to be 759 if Rwanda The benefits caTcrtlated incTuded voc onTg Tanzartian traffic wa.s consjdered. (7% total ptoject benetits) ' savings, and savings in tine of 5.2 Eroiect Effects 'and DeveTopments S.2.TrnaddritiontoservinERwandaandcerLainparêsofBurandiandzaite' of coffee' evacuate cash and food crop^s the project road was expected to of f rviLs , vegetabTes, and Tivestock cotton, 5u9ar, tice, maize, .banana.s, ptoject atea (para' 5'1'1)' : cattle, groaÉs and sheep fron Lhe ii ir i.à $ 5'2'2 During the construction of the road. between lglg-gs, food and. eash crop production did not amounÉ. to truch. I4aize, wheat, pad.dy rice and ca.s,sava productlon wete a71 7ow. There were ,".!l noderaêe gains in the production of coffee and cotton; 7i,567 êons and 3744 tons vere produced. respectivery during 7985/86' rn I'986/87 73'37o g,424 Êon.s and tons were prod.uced.. Thus the production picture has been the sarne for the two ar three geara aftet the compTetion of the construction of the road.. 5'2'3 Ànnex 3 sâows the importslexports trade o.f Rwanda and gurundi passing through Dar es saraam between 7978 and 79g7. For Burundi the total É,rade has jncrea.sed f rom a.ZmosÉ 69,OOO jn t,ons ZggO to llO,3SZ tons in Iggz . For Rwanda, jÉ.s total trade àas jncreased trom 2767 tons jn IggO to 35,259 bg 7987' Data from the two main ÉransiÉ. agencies which hand.Ie uo^rt oE Rwanda cargo in Dar es .9a-Iaam jndicaÉ,e that in 7981 most of the above aentioned cargo wa^t shipped via Kigoma and onLy about IZ,OOO Éons was desêined to Rwanda vja the project road. rhe non-conpzetion of the Lu.sahunga-Bokunbe-.rsa/ 5'2'4 Thus due to the above reason Rçanda àas not been able Éo suôsÉ.antiarlg reduce tlre number of transit poinÉs for their internationaT trad.e. However, it Js expeeted tàaÊ when É,àe .sesÉ,ions zusahanga -Bukombe-.rsa&a are eonpreted. and tâe efficiencjes of the TRC àas ôeen improved, Dar es salaam wirl replace ltonôasa as Éhe, aain port of entrg for Rwanda,s erport/inport. 5'2'5 rn Tanzania, the lCIcal àas t.àe Ê,as& for und.ertahing traffic counÉ,.r. À rerativery good traffic counting sgsÉea exist,ed in the past and falrrg reTiabre and detaiTed traffic counê inforaaÊion rras available for tàe enêire Érnn'k network up to 7974. The system d.eteriorated until recentlg from a,bout 7985 when .sysÉeraatic counês have ôeen comnenced, throughout Tanzania. 5'2.6 ?he trafric daÉa presented in TabZe s.r j.s culled from varjous source.s. The counÉs represent various secÉ,jons of the Link frorn Ru^suao to fsa&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&a and consjst of counting done bg Êàe I4ACw, Cons-uItants, conttaetor^s and rÏgures kept by the border post at Rusumo (tunex 4). rable s.r bejow shows the ADT for the year.s rgz4-r9\et using various seetions. 5.2-7 rt is obvious Éhat t,he actuar traf f ic reaiized. in terms of volume and growth did not matcll the forecast at appraisal. ftr.{s is borne out bg the 76 recent resuf ts of the 7 d.ags 24 hotrrs counts cond.ucted bg a consuTLant in 1987, For exampTe êhe ADî found on Éhe Lusahunga-Ngakahara section was only 77O, compared to appraisal esÊjmates for 1987 of L296. TabTe 5 .7 nAf ana Werage frct _Cf_Sqtht Totaf Traffie Heavg Traffic GrowLh Growth Seetion 1974 L987 rate % !974 1987 rate % Bukonbe-Lusahunga 75 47 8623 70.9 Bukonbe-t4asumàwe t9 4i 6.5 I 27 9.8 llasumlwe- Busoka 31 60 5.2 9 40 72.2 Busofta-Kahama 39 96 7.2 40 6i 3.6 r(ahana-J(angongwa 80 722 3.3 52 82 3.6 Kangongwa-fsaka 57 92 3.8 36 67 4.7 "Bukornôe-fsaka * See JOhn Burrow and Partners Road, Final Design Report" l4inistry of Cowmtnjcat.jons and Horfts, ApriT -z9BB- 5.3 Re-calculation of ERR js (jusé 5.3.7 The totecast of future traffic and analyses done ljÀe isoiating appraisal ) for the Rusurao-fsaka Road a.s a whole rather tharr js Ru.sumo-Zusahanga secÉjon as a unjÉ. This approach reaTistic considerÎng the êhe facÈ thaÊ Éhe Lusahunga -Bukombe secÉion is almosL completed and .secÉ,ion ftom Bukonbe to ûhe rajlhead at fsafta has received fira funding' ôasjs as Futther, such an approach nakes the anaTgses comparabTe to the sane by other agrencies' at apptaisa.I ,. and sirnilar sÉudjes undertaken for the project jn of fuÉure 5.3.2 Four caÊegories of traffic were consid'ered the analgses intetnational' fhe traffic. These include notmal, generaëed, diverted and normaT traffic is assumed to be the exiséing and futute Pâssenger/fteighë road' Narmal traffic traffic whÎch js noê depend.ent on the improvement of the needs of routine js thdt whjch is reguited to neeÊ the day-to-daV transport Loge'cher wi th its natural economic activity in the Tanzanian project drea grrowéh. a't a restTt of the nevl 5.3.3 Ger-terated traffic is new traffÎc that arise's grade' Imptoving the jmprovement of the toad from earth/graveT to bituminetus and for chis study it is Rusumo-Isaka Road wi77 generete addiLional traffic '''trian js TiniLed to îar' traf f ic assumed thaë grenerated Lraff ic which js anLiri 'ed ta increase (jnternatîonal traffic js projected sepaz'ate7g) j,: iW i.i 1-7 graduaLTg afLer the compTetion of a77 the sections of the' Tink between Ru.tumo and fsafta. 5.3.4 Tanzanian diverted domestic traffic wi77 be minimaT due to the Tach of parallel rouôes jn reasonable proximity to Lhe entire Tink from Rusumo to fsaÂa, Hence 7oca7 Lraffic diversian wi77 be negTigible and for the purpose of projection, na TocaL diverted traffic has been assumed. 5.3.5 The international trade of Rwanda and Burandi is Tikely to be atttacted to an improved road/raiTway route vja fsaka to Dar es Safaam. The extent of this djversion and attraction depends on the transport cost, distance, number of transhipments, border crossings and time in transit. A comparison of the various alternatives shows that the feast cost to Rwanda is Dar es Sa-Zaam to js fsaka via raiTwag then fsa.ka to KigaTi by road. Far this rea.son it anticipated Éhat most of the Rwanda surface exportlimport traffic wi77 be diverted to the project road. js S-3.6 WhiTe the Dar es Salaam-Isaka-Bujunbura route estjrnated to be more economieal transport route to Burundi, compared to the Dar e.s ,Salaam- Kigoma-Bujumbura, it js only marginaT. ÀIso other iterns in terms of tiae fÊame, number of transhipmenÊ,s, and distances are comparable (Ànnex 4). Hence, traffic djversion to É.his route from Burundi is not 7ike7y to be significant. Eowever, .some Burundi traffic wi77 divert from the northern rout.e through Hombasa. Àpproxinratelg about 20% of Éhe presenê traffie goes vja l{orn}asa. WjÉh jncreased rehabilj tation of Tanzania Railway Corpotation e.s QRC); and the proposed expansion of the railhead at fsafta, the Dat salaam-rsaÈa-Bujumôura route is expect.ed Èo be atÉracÉ.ive. S .3.7 Although in the pasÉ Éàe onTg internationaT through traffic rouÉes tolfrom Buntnd.i wete the Northern Corridor (road) and the .Southern Corridor (Lake-rail) vja Kigoma, since 7984 the CentraT Corridor road itinery via Kobero àas been deveToping and some of the trucks fron l4ombasa afso take this js route (Ànnex l). The most recent séudg on Burundi international rouÉe.t presented by a sÉudy sPonsored by the EC. j.3.8 It js estjmaÊed that for 7986 and 7.987, the actuaT heavg goods vehjcles the (IGal) emanaLing from Burundi through Robeto and aLtracted on to lusahalga -Bukombe Road r{rere gi3s and 70,767 respect!'.'e19. For the estimaLes jnÉernaLional goods on jnternaêjonal traffic, therefore, daiTy heavg traffic 78 ofabouÊ30ÉrucksisanticipaÉed.fromEurundi.oîtheseabout20%ot6 Road' The 20% diverted to the Rusurno*Lusahanga trucks per day will use or be conservatjve now and it js maintained a's a diversion is what is pettaining baseeventhroughwjÉhthecompletionofÉheBukombe_Isakasecêionandthe figu te is Tikely to be surpassed' ôransi t faciTities at fsaka, this 5.3.gÂnnex5showsthecomputatÏonandptojecLionoftraîficlornotmaT, generated(forTanzania)andintetnationaltrafficforRwandaandBurundi. the ERR' The benefiLs for the recaTcuTation of Ànnex 5 also shows the basis or the toad' rn a resuft of the improvement êre based mainlg on voc a^s is 57 km shorter than Êhe from Rusumo to Lusahanga addjtion the improved, road project co,st.s include the of Éhe economic ana|ysis, old one. Fot the purpose actualconsêructjoncostfortheprojecttoadandamainLenancecosta,s presurnedformaintainingthelinkatarea.sonabTestandard.Ânnex5ptovides detailsontheinformationanddatalorthecaTcuTationofÊheERR.TheERR also generated ttaffic) and ranzania (norma| and h'as recaTculated for includinginternationa]traffic,FortheformertheERRjs33o/6,whi7e includinginternationaTtrafficaieTded35%incurrenLprices.Inconstant T9S6pricestheERRwere32%and24%tespectively.Iheseatebelowthe appraisalestiraates,ThernainreasonisattribuLedtotheoverestimaLionof trafficbasedontheas.sunptiontha|LheTinkfromRusumotolsahawouTdhave beencompTeted.Irtespective,there-caTcuTatedERRa':eacceptabTeanddonot on79 to potential of this link Êhe impottance and confirm and reinfotce Eurundi' Tanzania Dut Rwanda and 6. 3!,NCLUSIONS N{D LESSONS 6.7 Conelusions 6.T.TTheptojectwa.sphgsica.tlgcompTetedintermsoftheciviTworksininstead of of Ju79 7g8o' thus of the appraisal forecasL ltarch 7985, instead 7g8O) ' it year's (Januaru 7978-Ju7y in two and a half the sched uTed compTetion toakaTmosesevenyear.stoconpTetetheproject(June7978-t4arch7985). 6.T.2SoaeotthedeTagsandinpl"ementationlapsesmagbeLracedtothe originalfinancialgaP,andinadequatesupervisionandattentionbgbothLhe The fitst GoT respectiveTg' agenc1 of the IaB and Lhe implementaLion fol7ow-upmjssiononthjsprojectbgtheADFwasdonefiarethanfouryeats ,i afLertheapprovaToftheToan.EquaTTg,LheGoTwasslowjnreaetingtoLhe project' which besetted this injti aI- ptoblems 79 6,1.3 Though the purpose of paving the road from Ru.sumo to Lusahunga rrâs conpleted, the impact of the compTetion is sornewàaÊ Tinited in the sense tàaÉ the otiginaL plan oÊ completing the stretch from Rusumo to fsaka, and tâus facilitating the international É,rade of Rwanda/Burund.i is geÉ to materialise. Howevet, wiÊh the expected completion of the Lusahunga-Bukonbe sect,ion bg December 7988, and the committment of the EC to f inance the Bu.kornôe-fsa.ka section the whole link sàould be conpleted and É,àus tu7fi7 the original appraisal goals. In spite of the non-compTetion of the whoie 7inh, in current terms, analysis show high benefits both to lanzania and iÉs neighbours of Rwanda and Eurundi. 6.2 Lessons 6.2.7 Lessons arising from the experiences of êhis project reconfira those alreadg Tearnt from other Bank Group ptojeets especiaTly coneerning Tanzania. Sorne of t,hese are sÊated beTow în the form of -Zessons Êo De noted bg the Bank Group and the Borrower: i) In countries Tike îanzania, whete start,-up periods and Êàe overaTT project implementation scàedules have been Tong and continue to be protracted, due time aTTorrance.s sâould be mad.e in the implementat,ion ot future projects and indepth Tooh slroufd always be taken at improving the projeet implementation capability of executing agenciesr. ii) the Bank Group sàou-Id pag increasing attention to the supervision of project implementation especially during the early stages when deficiencies in design, etc, mag become evid.ent; In effeet the .lesson àere js tàat the practice .so far of reLegating technical .supervision mjssjons to Tower prioritg staÉus than appraisal. aissjons àas quite often resufÉed in poor implementation of projects, deTays in project completions and inevitably eost overrun.s. this siÊuation is ôound to have adverse effects on the qttaTity of the Sank Grovp's activitjes. The Bank Group sàould en.sure that on-going projecÊs are .supervised at Teast once evetg yeat; and iii ) the Bank Group should encourage Êhe use of lixed exehange rates in cantracts. -fn addition of being a reguirement of the ADF guideTines for procurement, iÉ faciliÉ,ates the comparison of the acÉua.l cosÊs with the est,imaÉes made during the appraisal . TANZANIA ANNEX: I FilJSUMo- LUSaffi- n6ao pRoJEc r MAP WITHRWANO^trlI ERNAT|ONAL TRANSPORT CONNECTION S _a-a-a-. KENYA burouol .i ' .i, -)-.:-r; f,"r"-"-': ;i:i'..i buRUNDy' fr^;.nro,r-)'-': -t--ar-" \ i wi:-j i\ ritr' --1. , -r.ouc,i I ) / :x rongo fl..*^ .) !.-soîlil-fr6Tre OOI t'a i f<'^-ç-' xgsrdo ../' .i( \l- $.::;:^" L..--j." DAR E5 SALAAH l,-, !"' INDIAN OCEAN - -,çÆ ) fJ t- ../'\.r -\.- ,'ete ltocog'.o i l'. \( t' r-\ .i . Linai ZAMBIA \= \. r'/ ! .loo O f oO !0o krn\ - r -.- i MOZAM bIAUE -+-{,{.+-+.1 RAILWATS û . -a HAIN 1RUNKROÂ03 @ INTÊRHÂItOHÂLBORDERS BORO€RSEETWE€fI REGIONS { ANNEX 2 TANZANIA RUST'MO-LUSAHUNGAROAD PROJECT- PCR Burundi and Rwanda Traffic Thrto Port of Dar es Salaarn A. fusgndi Traffic Thror Dar es Salaam port Z vS Toral Year Inports Exports Total Throughput 1978 78,103 27,741 105,844 4.97 t979 4g,g2g 27,741 76,569 4.42 1980 46,394 L7,764 64,L49 4.02 1981 50,794 30,379 8l,163 4.87. t982 36,749 32,305 69,054 3.97. 1983 30,936 32,070 62,906 4.32 . 1984 54,993 28,560 83,443 5.72 1985 56,986 36,760 93,746 s.zz 1986 88,582 35,843 124,425 7.22 B. RwandaTraffic Throf Dar es Salaam port 1978 t0,654 I ,601 L21255 0.572 l9 79 1,309 2,262 3,570 0.212 r980 1,317 I ,450 2,767 o.t4z t 981 2,297 908 3,245 0.r8z L98Z 1,509 270 L 1779 o.092 1983 5,153 175 s,328 0.362 1984 6,399 225 6,625 0.362 r985 23,305 L69 23,474 t.47 1986 18,776 142 l8, glg t.Lz t987 34,930 821 35,759 L.7Z SOURCE: Port of Dar-es-Salaan, June 1988 ;i t1 l.i AilNEX 3 ÎANZANIA RUSM{O-LUSAHUNGAROAD PROJECT . PCR International Traffic To and From lanzania via the RusumoFall Border PosÈ i 985-r988 Mortth/Year In Out Total ADT '{ Oct. .i985 620 875 L,495 43 Nov. tr L,243 L,O44 21297 77 ,:: Dec. n 2,345 L,223 3,569 115 iû ' a Jan. 1986 940 1r131 2,O7L 69 n Feb. 848 858 L,704 6L rl March 560 360 920 30 'r April 562 315 377 30 ft May s20 205 725 24 tr June 405 259 724 49 rf July 450 195 645 2L fl August 481 252 733 24 I' SepÈ. 4t7 315 732 25 rf Oct. 679 322 1,001 33 tt Nov. 767 493 L,260 42 rl Dec. 542 437 979 32 Jan. 1987 532 293 825 27 n Feb. 343 374 7L7 26 rl Apri 1 574 1,333 L r9O7 64 rl July 611 699 .1,310 43 n August I,oo0 648 L,648 54 n Sept. L,3L2 687 1,999 67 tr Oct. 76r 633 L,394 45 rr Nov. 804 570 L r374 46 n Dec. 880 670 1,550 50 March 1988 765 568 923 30 rl April 355 . 595 1,360 45 SOURCE:Cusroms Dept, Rusuno Border Crossing, 24/6188. ANNEX4 TANZANIA RUSUMO.LIJSAHUNGAROAD PROJECT - PCR lggparison of BruÈings F Burundi to Indian ocean ports!/ Transport Time Cost US$/ Dist.ance Taken ,. , Routings Ton Modes _(kn]_ Shipnenrs Crossings (Days)I/ Rwand to I. Mombasa 585 Rail 1085 15.6 to via Malaba Road 808 Total ME I II. Mombasa 565 Rail r338 l5 .6 to via Kampala Road' 586 L7.5 Total L924 III. Mombasa 675 Road 1737 23.6 to 48.5 IV. Dar es Salaast 24e?-l R^ail 982 4L to via Isaka Road 496 B:.3/ lotal TM V. Dar es Salaam 495 Reit L253 47 to via Kigooa Barge 175 95 Road 285 lota1 lm Egtggê!=Eg I. Mombasa 807 Râi1 r085 16.6 to via MaLaba Road r093 18.5 lotal m II. Monbasa 784 Rail r 338 16.6 to via Kampala Road 871 18.5 Total 6g III. Mombasa 903 Road 2022 24.6 co 49.s IV. Dar es Salaan 26d/ Rail 982 42 to via Isaka Road 598 lota1 tsBo-' v. Dar es Salaam 289 Rail L253 46 to via Kigoma Barge 175 lota1 ffi ll Total transport cost (financial) in 1980 U.S. dollars includes porr costsi tranship- ment costs; road, railroad, and barge costs; forwarders fees; border crossing feesl and shipping costs differencial (assurning a coutmonexternal node--Europe--for analy- tical purposes adds differenËial for longer shipping distance: $20lton to Dar-es- Salaam; 1979 costs updated to 1988 costs use an assumed15 percent inflation race). 2l Assunes road transporr costs of S$0.07lton.-kilometer and railroad costs of $38/ton. 3/ ProraÈes transport Eravel tine for road and railroad links in relation to distance. lt Based on experilnce prior to 1980. SOUE.CE:.{ Report on the fnternat ional Tt.ntpgtcttioo Bottl Suru:di, l;:Èernational Bank for Reconstruction and Deve-op:eni, February i'tè'U' }â'-Jer elo?ne::l, February' 1980, ard u;:dared to 1988 p:ices. ÀNNEX 5 Page 5 of 5 TAI{ZANIA RUSI'MO-LUSAHUNGAROAD PROJECT- PCR Re-Calculation of E!! 1(Tsqza4ia Traffic only) Capital MainËenance Net Year Costs (1) Costs Q) Benefits Benefits L978 39.80 (3e.8) L979 31.50 (31.s ) 1980 49.00 : (4e.0) 198t. 65.00 (6s.0) L982 52.70 (52.7) : 1983 97.70 : (e7.7) 1984 58.30 (58.8) 1985 L9.20 3.00 96.00 (73.8) 1986 L2_.98 3.00 190.00 L74 L987 3.00 23L.oa 228 1988 3.00 237.OO 234 r989 3.00 244.O0 2t+L 1990 3.00 252.OO 2trB 199r 130.60 261.00 , l3l t992 3.00 274.O0 27L 1993 3.00 278.O0 275 1994 3.00 285.00 282 ' 1995 3.00 344.00 341 L996 3.00 365.00 362 1997 I 30.60 386.00 255 I 998 3.00 405.00 402 1999 3.00 424.O0 42L 2000 3.00 445.00 442 2001 3.00 468.00 465 2002 3.00 489.00 486 2003 130.5C 515.00 385 2004 3.00 542.O0 539 ERR - 242