Completion Report
Project Number: 34333 Loan Number: 2019 and 2020 June 2012
Pakistan: Balochistan Road Development Sector Project
CURRENCY EQUIVALENTS Currency Unit – Pakistan rupee/s (PRe/PRs)
At Appraisal At Project Completion (1 October 2003) (30 November 2011) PRe1.00 = $0.0169 $0.0113 $1.00 = PRs59.00 PRs88.24 $1.00 = ¥111.185 ¥77.93
ABBREVIATIONS
ADB – Asian Development Bank CWD – Communication and Works Department of Balochistan EIRR – economic internal rates of return ICB – international competitive bidding IEE – initial environmental examination NHA – National Highway Authority of Pakistan PMU – project management unit SDR – special drawing rights TA – technical assistance
NOTES
(i) The fiscal year (FY) of the government of Pakistan and the provincial government ends on 30 June. FY before a calendar year denotes the year in which the fiscal year ends, e.g., FY2010 ends on 30 June 2010.
(ii) In this report, ―$‖ refers to US dollars, ―¥‖ refers to Japanese Yen.
Vice-President X. Zhao, Operations 1 Director General K. Gerhaeusser, Central and West Asia Department (CWRD) Director H. Wang, Transport and Communications Division, CWRD
Team leader J. Ning, Senior Transport Specialist, CWRD Team member K. Butt, Associate Project Analyst, CWRD
In preparing any country program or strategy, financing any project, or by making any designation of or reference to a particular territory or geographic area in this document, the Asian Development Bank does not intend to make any judgments as to the legal or other status of any territory or area.
CONTENTS
Page BASIC DATA i
I. PROJECT DESCRIPTION 1 II. EVALUATION OF DESIGN AND IMPLEMENTATION 1 A. Relevance of Design and Formulation 1 B. Project Outputs 2 C. Project Costs 4 D. Disbursements 4 E. Project Schedule 5 F. Implementation Arrangements 5 G. Conditions and Covenants 6 H. Related Technical Assistance 6 I. Consultant Recruitment and Procurement 7 J. Performance of Consultants and Contractors 7 K. Performance of the Borrower and the Executing Agency 8 L. Performance of the Asian Development Bank 9 III. EVALUATION OF PERFORMANCE 9 A. Relevance 9 B. Effectiveness in Achieving Outcome 9 C. Efficiency in Achieving Outcome and Outputs 10 D. Preliminary Assessment of Sustainability 11 E. Impact 11 IV. OVERALL ASSESSMENT AND RECOMMENDATIONS 13 A. Overall Assessment 13 B. Lessons 13 C. Recommendations 14
APPENDIXES
1. Latest Project Status for Loan 2019 16 2. Project Framework 17 3. Summary of Provincial Institutional Development Component 21 4. Project Cost and Financing Plan 24 5. Disbursement of ADB Loan Proceeds 26 6. Appraisal and Actual Implementation Schedules Compared 27 7. Chronology of Major Events 28 8. Organizational Structure for Project Implementation 30 9. Status of Compliance with Major Loan Covenants 32 10. Summary of Contract Packages 38 11. Economic Reevaluation 39 12. Summary of the Technical Assistance Loan (Loan 2020) 45
BASIC DATA
A. Loan Identification
1. Country Pakistan 2. Loan Numbers Loan 2019-PAK and Loan 2020-PAK(SF) 3. Project Title Balochistan Road Development Sector Project 4. Borrower Islamic Republic of Pakistan 5. Executing Agencies (i) National Highway Authority (ii) Communication and Works Department of Balochistan 6. Amount of Loan (i) Loan 2019: ¥20,266,370,000 from the ordinary capital resources (ii) Loan 2020: SDR701,000 from the Asian Development Fund 7. Project Completion Report Number PAK-1321
B. Loan Data 1. Appraisal – Date Started 16 July 2003 – Date Completed 22 July 2003
2. Loan Negotiations – Date Started 22 October 2003 – Date Completed 23 October 2003
3. Date of Board Approval 20 November 2003 for both loans
4. Date of Loan Agreement 17 March 2004 for both loans
5. Date of Loan Effectiveness – In Loan Agreement 90 days after loan agreement signed – Actual 20 August 2004 for both loans – Number of Extensions One
6. Closing Date Loan 2019 – In Loan Agreement 31 December 2009 – Actual 31 August 2010 – Number of Extensions One Loan 2020 – In Loan Agreement 31 December 2009 – Actual 31 December 2009 – Number of Extensions None
7. Terms of Loan Loan 2019, Ordinary Capital Resources – Interest Rate LIBOR-based lending facility – Commitment Charges 0.75% – Maturity (number of years) 25 – Grace Period (number of years) 5 – Front-end Fee 0.5% Loan 2020, Asian Development Fund – Interest Rate 1.0% yearly during grace period 1.5% yearly after grace period
ii
– Maturity (number of years) 32 – Grace Period (number of years) 8
8. Terms of Relending (if any) None – Interest Rate – Maturity (number of years) – Grace Period (number of years) – Second-Step Borrower
9. Disbursements a. Dates Initial Disbursement Final Disbursement Time Interval Loan 2019 19 December 2005 8 April 2011 63 months Loan 2020 13 June 2007 26 April 2010 34 months
Effective Date Original Closing Date Time Interval 20 August 2004 31 December 2009 64 months Note: Loans 2019 and 2020 have the same effectivity and original closing dates. b. Loan 2019, Amount (¥ ’000) Last Amount Original Revised Increased/ Amount Undisbursed Category Allocation Allocation (Canceled) Disbursed Balancea 1 Civil Works 14,349,287 15,646,018 1,296,731 10,281,588 5,364,430 1A PAC 7,943,718 7,454,580 (489,138) 4,594,340 2,860,240 1B CDC 218,270 0 (218,270) 0 0 1C NHC 6,170,929 8,175,068 2,004,139 5,687,248 2,487,821 1D Maintenance 16,370 16,370 0 0 16,370 subcomponent of PAC 2 Equipment 381,973 218,270 (163,703) 61,846 156,424 2A PIDC 218,270 218,270 0 61,846 156,424 2B CDC 163,703 0 (163,703) 0 0 3 Incremental Administration 436,540 158,736 (277,804) 111,591 47,145 4 Consulting Services 1,407,842 1,469,179 61,337 932,268 536,912 4A Inst Development and Capacity Building under the 229,184 229,184 0 184,326 44,858 PIDC 4B Design and Construction 807,599 807,599 0 465,556 342,043 Supervision of PAC 4C Construction Supervision of 371,059 432,396 61,337 282,386 150,010 NHC 5 Front-end Fee 98,222 98,222 0 101,332 3,110 6 Interest and Commitment 873,080 873,080 0 615,516 257,565 Charges 7 Unallocated 2,719,426 217,967 (2,501,459) 0 217,967 Total 20,266,370 18,681,472 (1,584,898) 12,104,139 6,577,333 a Canceled at loan account closing. CDC = cross-border development component, NHC = national highway component, PAC = provincial access component, PIDC = provincial institutional development component. Source: Loan Agreement and Asian Development Bank loan financial information system.
iii
c. Loan 2020 (SF), Amount (SDR) Last Amount Original Revised Increased/ Amount Undisbursed Category Allocation Allocation (Canceled) Disbursed Balancea 1. Community Infrastructure 175,250 175,250 0 76,036 99,214 and Empowerment Fund 2. Social Protection and 175,250 175,250 0 31,682 143,568 Education Fund 3. Equipment 49,070 49,070 0 165,849 (116,779) 4. Consulting Services 175,250 175,250 0 4,240 171,010 5. Interest Charge 28,040 28,040 0 0 28,040 6. Unallocated 98,140 98,140 0 0 98,140 Total 701,000 701,000 0 277,807 423,193
a Canceled at loan account closing. Source: Loan Agreement and Asian Development Bank loan financial information system.
10. Local Costs (Financed) Loan 2019 – Amount ($ million) 11.1 – Percentage of Local Costs 13.2 – Percentage of Total Cost 5.2 Loan 2020 – Amount ($ million) 0.0 – Percentage of Local Costs 0.0 – Percentage of Total Cost 0.0
C. Project Data
1. Project Cost ($ million) Loan 2019
Cost Appraisal Estimate Actual
Foreign Exchange Cost 162.5 129.6 Local Currency Cost 104.8 83.6 Total 267.3 213.2
Loan 2020
Cost Appraisal Estimate Actual
Foreign Exchange Cost 1.00 0.44 Local Currency Cost 0.25 0.25 Total 1.25 0.69
iv
2. Financing Plan ($ million) Loan 2019 Cost Appraisal Estimate Actual Implementation Costs Borrower Financed 81.6 99.6 ADB Financed 176.8 106.9 Total 258.4 206.5 Financial Chargesa Borrower Financed ADB Financed 8.9 6.7 Total 267.3 213.2 a Including front-end fee, interest during construction, and commitment fee. ADB = Asian Development Bank.
Loan 2020 Cost Appraisal Estimate Actual Implementation Costs Borrower Financed 0.250 0.250 ADB Financed 0.960 0.432 Total 1.210 0.682 Financial Chargesa Borrower Financed 0.000 0.000 ADB Financed 0.040 0.007 Total 1.250 0.689 a Including interest during construction. ADB = Asian Development Bank.
3. Cost Breakdown by Project Component ($ million) Loan 2019 Component Appraisal Estimate Actuala A. Base Cost 1. Provincial institutional development component a. Equipment 2.0 0.6 b. Consulting services 2.1 1.7 2. Provincial access component a. Land acquisition and resettlement 3.0 1.9 b. Provincial roads improvement 117.9 86.8 c. Consulting services—detailed design and 7.4 4.9 construction supervision 3. Cross-border development component a. Civil works 2.5 0.0 b. Equipment 1.5 0.0 4. National highway component a. Land acquisition and resettlement 1.0 3.6 b. National highway improvement 91.2 103.3 c. Consulting services—construction supervision 3.4 2.7 5. Incremental costs 4.0 1.0 B. Contingencies 22.4 0.0 C. Financial charges 8.9 6.7 Total 267.3 213.2 a Actual costs for the completed components and latest estimations for the incomplete components.
v
Loan 2020 Component Appraisal Estimate Actual
1. Community infrastructure and empowerment fund 0.250 0.120 2. Social protection and education fund 0.250 0.050 3. Equipment 0.070 0.000 4. Consulting services 0.250 0.262 5. Interest 0.040 0.007 6. Unallocated/contingency 0.140 0.000 7. Others financed by government 0.250 0.250 Total 1.250 0.689
4. Project Schedule Item Appraisal Estimate Actual/Planneda
1. Provincial institutional development component a. Consulting services Q1 2005–Q4 2007 Q3 2005–Q2 2009 2. Provincial access component a. Provincial roads improvement Q4 2004–Q2 2009 Q1 2006–Q4 2013 b. Consulting services—detailed design and Q2 2004–Q2 2009 Q3 2005–Q4 2013 construction supervision 3. National highway component a. National highway improvement Q1 2005–Q3 2008 Q1 2006–Q3 2012 b. Consulting services—construction supervision Q1 2005–Q1 2008 Q1 2006–Q4 2012 4. TA loan a. Implementation Q3 2004–Q1 2008 Q1 2007–Q2 2009 a Actual dates for completed components and latest estimations for incomplete components.
5. Project Performance Report Ratings Loan 2019 Ratings Development Implementation Implementation Period Objectives Progress 27 February 2005–30 December 2007 Satisfactory Satisfactory 01 January 2008–28 February 2008 Satisfactory Unsatisfactory 01 March 2008–30 December 2010 Satisfactory Satisfactory Note: The project was rated ―at risk‖ for the period from 1 January 2008 to 28 February 2008.
Loan 2020 Ratings Development Implementation Implementation Period Objectives Progress 27 February 2005–30 June 2010 Satisfactory Satisfactory
vi
D. Data on Asian Development Bank Missions Name of Mission Date No. of No. of Specialization Persons Person- of Members Days
Fact-Finding 3–15 June 2003 6 60 b, c, e, i, g, k, Appraisal 16–22 July 2003 4 28 c, n, o, i Loan Negotiation 22–23 October 2003 Inception (Loan 2019) 27 November– 3 15 a, c, l 1 December 2004 Special Project Review 1–4 February 2005 4 16 c, c, j, l Inception (Loan 2019 and Loan 2020) 18 May–10 June 2005 6 50 a, c, d, I, j, l Procurement Training 1–3 August 2005 1 3 p Review 1 1–10 February 2007 1 10 c Review 2 13–20 February 2007 1 8 c Midterm Review 13–19 March 2008 3 21 e, k, l Review 3 20–24 October 2008 3 15 k, o, p Review 4 4–31 May 2010 4 32 b, b, l, k Review 5 19–28 July 2010 4 40 b, b, d, l Completion Review 10–18 November 2011 2 16 l, m a = environment specialist, b = transport specialist, c = project specialist, d = social specialist, e = economist, f = financial management specialist, g = counsel, h = operations officer, i = investment specialist, j = project implementation officer, k = portfolio, l = analyst, m = consultant, n = director, o = country director, p = procurement specialist.
I. PROJECT DESCRIPTION
1. At request of the government of Pakistan, the Asian Development Bank (ADB) on 20 November 2003 approved two loans for the Balochistan Road Development Sector Project— a project loan (Loan 2019–PAK) of ¥20,266,370,000 ($185.7 million equivalent) from ADB’s ordinary capital resources and a technical assistance (TA) loan (Loan 2020–PAK) in various currencies equivalent to SDR701,000 ($1.0 million equivalent) from its Special Funds resources.1 The project was to improve connectivity and allow better access in Balochistan Province, and increase the capacity and systems for sustainable road subsector development, specifically road maintenance. The project was also to improve the efficiency of the national highway (NH 25), including one major border crossing, which passes through Balochistan and forms part of the priority road transport corridor linking Pakistan, Afghanistan, and Central Asia. The TA loan was to support devolution and help the Balochistan Provincial Government and the district administration enhance the project benefits to the poor. In addition, a TA grant was approved to prepare a program for more efficient cross-border operations and establish a pilot cross-border facility (TA 4221–PAK).2
2. At appraisal, the project had four main components: (i) the provincial institutional development component, supporting the Communication and Works Department (CWD) and districts in Balochistan Province; (ii) the provincial access component, comprising rehabilitation and construction of about 1,100 kilometers (km) of provincial roads; (iii) the cross-border development component, which was to provide a new pilot cross-border facility; and (iv) national highway component, comprising rehabilitation of 247 km of national highways. The total project cost was estimated at $267.3 million equivalent, for financing by ADB (69.5%) and the government (30.5%). The total TA cost was estimated at $1.25 million, for financing by the TA loan (80%) and the government (20%). The executing agencies were (i) CWD in Balochistan for the provincial access component, the provincial institutional development component, and the TA; and (ii) the National Highway Authority (NHA) for the cross-border development and national highway components. The project and TA loan were to be completed by 30 June 2009.
II. EVALUATION OF DESIGN AND IMPLEMENTATION
A. Relevance of Design and Formulation
3. At appraisal, Balochistan Province was the largest and least-developed province in Pakistan. The province’s economic development potential was constrained by its limited resource base, inadequate social and economic infrastructure, lack of connectivity between the poor rural population and market and district centers, poor access to education and health facilities as well as other social services, and few job opportunities. The onset of peace in Afghanistan and developments in Pakistan and Central Asia offered opportunities for regional cooperation. As one of the principal gateways between Pakistan and Afghanistan, Balochistan was well placed to play a key role in regional trade.
4. To support the country’s development, ADB adopted a programmatic approach that sequences interventions in individual provinces over several years. This project was the third intervention using this approach, following the road projects that were approved in 2001–2002
1 ADB. 2003. Report and Recommendation of the President to the Board of Directors on a Proposed Loan and Technical Assistance Loan and Technical Assistance Grant to the Islamic Republic of Pakistan for the Balochistan Road Development Project. Manila (Loan 2019-PAK and Loan 2020-PAK, approved on 20 November 2003). 2 ADB. TA 4221-PAK: Cross-Border Facility and Efficient Transit Facilitation, $500,000, approved on 20 November 2003, completed on 31 July 2006.
2 covering the provinces of Sindh and Punjab, respectively. In 2009, ADB approved a new country partnership strategy for Pakistan, which aims to support the country’s strategic objectives of prosperity and poverty reduction.3 The new country partnership strategy specifies ADB’s priorities and provides future direction of its assistance to Pakistan, including (i) reforms and investments in key infrastructure sectors, (ii) support for new economic and institutional reforms, (iii) development of urban services, and (iv) effective implementation of projects and programs, and (v) capacity building.
5. During and after implementation, the project’s design and formulation were found to be highly relevant to the government’s objectives and ADB’s country strategy. By ADB’s project completion review mission, 120 km of national highways and 189 km of provincial highways had been reconstructed under the project. Extensive consulting services were provided for institutional development, and project design and supervision. However, some national and provincial highways anticipated at appraisal are still under construction for various reasons (paras. 16 and 18), and the cross-border component was cancelled (para. 9). The majority of the project’s impact and outcome indicators anticipated at appraisal have been achieved; the project’s impact and outcome will be further improved once the ongoing civil works are completed (paras. 34, 35, 40, and 41). The TA loan was well implemented. Appendix 1 shows the latest project status for Loan 2019 and Appendix 2 presents the project framework with the latest results.
B. Project Outputs
1. National Highways 6. The national highway was reconstructed under 4 civil works contracts. Two contracts were completed with reconstruction of 119.8 km of national highways. Works under the other two contracts, with 110.6 km of national highways, are still ongoing (48-50% completed) and are expected to be completed by September 2012 with government funding. The civil works were mainly to reconstruct and widen the existing national highways to a standard of 7.3 meter (m) carriageway with a 3.0-m-wide shoulder on both sides. To facilitate large traffic volume near Quetta, 15.5 km of the Quetta–Kila Adbullah section was widened to dual carriageway. Asphalt concrete pavements were (or will be) provided to all sections of national highways; realignments on some sections were made according to real needs, and six bridges and 883 culverts were (or will be) constructed.
2. Provincial Highway and Rural Roads 7. The provincial highways and rural roads were improved under 15 civil works contracts. Nine contracts were completed with a total length of 189.08 km of roads improved. The remaining 6 contracts for 237.1 km of roads (including the section transferred to the Balochistan Development Authority) are still being implemented and expected to be completed by September 2013 with government funding. The civil works were mainly to reconstruct the existing provincial and rural roads to a standard of 7-m carriageway, 3-m-wide shoulders, and pave them with asphalt. Many bridges and a large number of culverts were (or will be) constructed. Realignment of some road sections was done according to geographic conditions and real needs.
3 ADB. 2009. Country Partnership Strategy: Pakistan 2009–2013. Manila.
3
3. Provincial Institutional Development 8. The provincial institutional development component was implemented through 217 person-months of consulting services. A final report was prepared and submitted in June 2009. The report covered many aspects of road development, including road maintenance, axle-load control, road safety, project implementation guidelines, institutional reform, private sector participation, and project management. Appendix 3 shows the details of the outputs.
4. Cross-Border Development 9. The cross-border development component was designed to improve infrastructure and facilities at Chaman land port at the Pakistan–Afghanistan border. A 32-acre plot was acquired at the Chaman border, and a boundary wall, small office, and restaurant was constructed. During ADB’s midterm review mission in March 2008, it was agreed to drop this component from the project as it would be implemented under another government-funded project covering development of all land ports in Pakistan.
5. Technical Assistance Loan (Loan 2020) 10. The TA was completed in October 2009 and a final report was submitted to ADB. The main TA outputs included (i) improved community infrastructure—10 water tanks and 38 pit latrines in 10 villages were constructed, benefitting 1,119 households or a population of 9,156; (ii) increased awareness of social protection and education—training sessions on the formation and capacity building of road contracting were conducted in five districts, with 50 awareness- raising sessions attended by 1,149 participants and 25 training sessions on road maintenance attended by 562 participants; and (iii) monitored social and poverty impacts of road projects. Domestic and overseas training sessions were provided to CWD officials on grant management and monitoring. A total of 52 CWD officers and staff, as well as 14 representatives from nongovernment organizations received training.
11. The project undertook the following major changes in scope during implementation:
(i) The total length of provincial highways and rural roads was reduced from 1,100 km anticipated at appraisal to 426 km, mainly due to a budget shortfall caused by unexpected high inflation and sharp increases in the prices of construction materials. Some selected road sections were also upgraded to national highways and implemented by NHA, and one road section (Zhob-Mir Ali Khel road, 91 km) was transferred to the Balochistan Development Authority for implementation. (ii) Several small realignments were made to enhance transport efficiency and reduce involuntary resettlement, including a 1.79-km bypass for Pringabad town, a section under the international competitive bidding (ICB) contract-3 to avoid passing by a sensitive area, a section under ICB-4 to avoid passing under a railway line, a 3.83-km bypass for Balleli town, and a section under ICB-4 before entering Khojak Pass. These realignments led to limited changes in project costs. (iii) In 2006–2007, heavy rainfall and flood affected the project area. As a result, a large number of culverts were added to both national highway and provincial highway components to allow for adequate drainage of roads and its long-term serviceability.
4
C. Project Costs
12. At appraisal, the total cost was estimated at $267.3 million for the project and $1.25 million for the TA. During implementation, the price of construction materials escalated and the project was delayed, which resulted in increases in construction costs. Meanwhile, some components including the cross-border development component were dropped, resulting in cost savings. The project completion review mission updated the project cost by using the actual costs for the completed components and the latest cost estimates for the incomplete components. The total adjusted project cost is $213.2 million, about 20% lower than that estimated at appraisal.4 The final cost for the TA was $0.69 million, about 45% lower than that estimated at appraisal because (i) the budget for some components was not fully used, and (ii) the equipment was not procured. Appendix 4 compares the details of the total project and TA costs at appraisal and at the project completion review mission.
13. Under the financing plan envisaged at appraisal, the ADB loan was to finance 69.5% of the total project cost and the government to finance the remainder (30.5%). During implementation, the ADB loan was not fully used, increasing the share of government financing from 30.5% to 46.7% in the revised financing plan. The TA loan was also not fully used, decreasing ADB’s financing share from 80% to 63.7%. Appendix 4 shows the actual financing plan and that envisaged at appraisal.
D. Disbursements
14. The ADB loans were signed on 17 March 2004 and became effective on 20 August 2004. Disbursements for Loan 2019 were initially slow, with the first disbursement on 19 December 2005.5 After the civil works began, the disbursements picked up in 2006–2007. However, the project implementation started slowing down again for several reasons (para. 16), which affected loan disbursements. The project implementation and loan disbursement could not meet the deadline for the original loan closing date of 31 December 2009. Upon request from the government, ADB approved a 12-month extension, with quarterly milestones. On 30 June 2010, upon the government’s request, ADB cancelled part of the loan in the amount of ¥1,584,897,732 ($16.5 million equivalent) and the loan proceeds were also reallocated (see project data). In July 2010 the ADB loan review mission found that the second quarter milestones had not been met. Finally, ADB closed the loan on 31 August 2010. By the loan account closing (8 April 2011), ADB loan proceeds of ¥12,104,139,122 ($113.65 million equivalent) had been disbursed. The undisbursed amount of ¥6,577,333,145 was cancelled at the loan account closing.
15. The first disbursement for Loan 2020 was made on 13 June 2007 and the last disbursement on 26 April 2010. The loan was closed on the original closing date of 31 December 2009. However, only SRD277,807 ($0.439 million equivalent) was disbursed. The undisbursed amount of SRD423,193 was canceled on 30 June 2010 at the loan account closing. Appendix 5 shows the projected and actual annual disbursements of loan proceeds.
4 When adjusting costs, the cost items presented in PRs were converted using the currency exchange rate at the project completion review mission ($1.00=PRs88.24). 5 $51,191 for consulting services. Before this disbursement, there were loan disbursements for the front-end fee and financial charges.
5
E. Project Schedule
16. The ADB loans became effective in August 2004. The ADB inception missions in November 2004 and May 2005 found that the project implementation was delayed for about 7 months for the national highway component and 10 months for the provincial access component. The delay was mainly caused by slow progress in consultant selection, slow bidding process, and inadequate procurement capacity of NHA and CWD. However, the inception missions believed that the project would be expedited and completed according to the original schedule. Consequently, the design and supervision consultant contracts were signed in June 2005 for the provincial access component and January 2006 for the national highway component, respectively. The civil works started in November 2005 for two provincial roads, between May 2006 and December 2007 for the other provincial roads, and between March and May 2006 for all the national highways.
17. Project implementation was delayed in 2008 due to: (i) the deteriorating security situation due to the killing of a tribal chief; (ii) heavy rains and a flood that affected the project area in late 2007; (iii) unexpected high inflation in 2008; (iv) an earthquake in 2008; (v) delayed consultant recruitment for Loan 2020 because of the security situation; (vi) delays in land acquisition and resettlement; (vii) delay in the release of counterpart funds by CWD due to unexpected government expenditures in 2006–2007; and (viii) poor performance of some contractors. The ADB midterm review mission in March 2008 noted that these delays were mainly related to the provincial access component and proposed a change in project scope by cancelling some components.
18. Implementation under Loan 2019 was delayed and could not be closed within the original closing date of 31 December 2009. Taking into account the political and security situation in the project area, ADB approved a loan extension in March 2010, with quarterly implementation milestones. The first ADB quarterly review mission fielded in March 2010 found that the milestones for the first quarter were fully achieved by CWD and substantially achieved by NHA. However, the second ADB quarterly review mission in July 2010 found that both NHA and CWD failed to fully comply with the milestones for the second quarter and thus recommended closing the loan immediately. Finally, ADB closed Loan 2019 on 31 August 2010. By the loan closing, two national highway contracts and six provincial highway contracts were completed, while the other civil work contracts were ongoing. The contract for the provincial institutional development component was awarded in March 2005, but mobilization of consultants was delayed for about 5 months due to the unavailability of some of the original nominees. The TA loan started in February 2007 and smoothly completed in October 2009.
19. NHA and CWD informed ADB’s project completion review mission in November 2011 that the remaining awarded national highway contracts would be completed by September 2012 and the remaining awarded provincial highway contracts by 2013. Appendix 6 compares the actual implementation schedule with the schedule envisaged at appraisal, and Appendix 7 shows a chronology of main events.
F. Implementation Arrangements
20. As agreed at appraisal, NHA was the executing agency for the national highway component and CWD Balochistan was the executing agency for the provincial components. A project steering committee was established within NHA, which was headed by the chairman and comprised senior members. In Balochistan, a project steering committee was also established, which was chaired by the secretary of CWD and comprised high-level officials from
6 related provincial government agencies including CWD, the Planning and Development Department, and the Financial Department. These two steering committees held regular meetings to guide and coordinate project implementation.
21. Under the national highway component, a project office was established in Quetta and led by an ADB general manager for Balochistan. The office acted as both the project management unit (PMU) and the implementing agency. Two project managers were designated in the PMU, each of whom managed two contracts of the national highway component. Each project manager was supported by a group of technical staff, including assistant directors and staff in land acquisition, contract procurement, project monitoring, and financial management. In addition, the consultants assisted in contract administration and construction supervision. For the provincial components and TA loan, a PMU was established under CWD. The provincial PMU was supported by a group of deputy directors, each of whom was responsible for several contracts.6 The PMU was supported by staff in accounting, engineering, and project administration. The consultant assisted in procurement, supervision, quality control, and implementation coordination. Appendix 8 shows the institutional frameworks for project implementation.
G. Conditions and Covenants
22. The project complied substantially with the loan conditions and covenants in the loan agreements. 7 The government established an adequate organizational structure for project implementation, establishing the steering committees, designating the executing and implementing agencies, and setting up the PMUs with sufficient staffing. The government provided (and will provide) counterpart funds for the project, much higher than the amount estimated at appraisal. Many issues on improving road sector performance were studied under the provincial institutional development component and the recommendations have been incorporated into the ongoing institutional reform programs. However, the cross-border development component was dropped and project implementation was substantially delayed. Release of counterpart funds was also delayed on certain occasions. The land acquisition and resettlement plan was not well implemented. The monitoring and evaluation activities were not implemented. The financial audit reports for NHA were not submitted timely, which caused the project performance rated at risk in early 2008. The funding for road maintenance has increased, but remains inadequate, especially for provincial and rural roads. Out of total 27 loan covenants, 22 are complied and 5 are partially complied. Appendix 9 shows the detailed status of compliance with major loan covenants for the project.
H. Related Technical Assistance
23. The TA grant (TA 4221-PAK) started in February 2005 and was completed in July 2006. The consultant analyzed the legal and institutional aspects of cross-border operations and the handling of transit cargo to Afghanistan through Pakistan. The TA discussed the necessity of amending the Afghanistan Trade and Transit Agreement of 1965 and other initiatives. It also sought the adoption of international best practices at the Chaman border. A study tour was organized to Thailand and the Lao People’s Democratic Republic. The consultant produced a
6 There were seven deputy directors before loan closing, each of whom was responsible for several project contracts. Four deputy directors remain in the PMU because of the reduced workload. 7 The Loan Agreement between the Islamic Republic of Pakistan and the Asian Development Bank (Loan 2019- PAK) and the Loan Agreement between the Islamic Republic of Pakistan and the Asian Development Bank (Loan 2020-PAK [SF]), both dated 17 March 2004.
7 comprehensive report. However, the TA was rated partly successful due to (i) significant implementation delays, and (ii) the unlikelihood of the cross-border facility in Chaman being implemented as planned.8
I. Consultant Recruitment and Procurement
24. Consultant recruitment conformed to ADB’s Guidelines on the Use of Consultants by the Asian Development Bank and its Borrowers (2002, as amended from time to time). Although ADB approved the advance action, consultant recruitment was delayed. Three consultants were eventually recruited following quality- and cost-based selection (QCBS) procedures. The contract for the provincial institutional component was awarded on 17 March 20059 and the design and construction supervision contract for provincial highways and rural roads was awarded on 14 June 2005.10 The construction supervision contract for national highways, with total inputs of 1,319 person-months, was awarded on 4 January 2006.11 However, none of these consultants could complete work on schedule (paras. 16–18), and extensions of the contracts were made accordingly. The consultant under the TA loan was selected following QCBS procedures and the contract was awarded on 13 February 2007.12 After the loan closing in August 2010, the consultants for the provincial highway component were withdrawn and remaining works have been taken over by a local consulting firm, with a new agreement signed on 1 March 2011.13
25. The civil works procurement conformed to ADB’s Procurement Guidelines (2007, as amended from time to time). Although ADB approved the advance action, procurement of the civil work contracts started late. Under the national highway component, all four contract packages were procured following the ICB procedure among the prequalified bidders. Contracts ICB-1 and ICB-3 were awarded to M/s Saadullah Khan & Brothers on 6 February 2006, while other two contracts were awarded to M/s Husnain Cotex Ltd. on 6 February and 6 May 2006. Taking the security concerns into consideration, works under ICB-2 and ICB-4 were subsequently assigned to a local contractor (M/s MAB/REX JV). The reassignment contract was finalized in December 2010. Under the provincial highway component, some sections anticipated at appraisal were upgraded to national highways and some sections were eliminated due to the budget constraints. Out of 12 provincial highways packages, 3 ICB contracts and 12 local competitive bidding contracts were awarded. The first contract was awarded on 14 November 2005 (ICB-5) and the last on 10 December 2007. By the project completion review mission, nine contracts had been completed while the others remained under implementation. Appendix 11 summarizes the project contract packages under Loan 2019.
J. Performance of Consultants and Contractors
26. Overall, the performance of the consultants was satisfactory. Under the national highway component, the consultants mobilized quickly and worked closely with NHA on contract administration and construction supervision. While NHA initially reported that the consultants’ performance was unsatisfactory, but it improved after the replacement of the team leader in 2009. The consultants helped NHA prepare project progress reports. By the loan closing, a total
8 ADB. 2007. Technical Assistance Completion Report for Cross-Border Facility and Efficient Transit Facilitation (Pakistan) (TA 4221-PAK). Manila. 9 SMEC International in association with Dainichi (Japan), Louis Berger (USA), ACC, NESPAK, and SEBCON. 10 SMEC in association with seven other consulting firms. 11 SMEC International Pty Ltd. and Associates. 12 Asian Institute of Development Studies, Inc., Philippines. 13 M/s Associated Consultancy Centre (Pty) Ltd., Islamabad (an associate of the original consulting team).
8 of 2,260 person-months of consulting services were provided, including 55 person-months from international and 2,205 person-months from national consultants. It is estimated that another 562 person-months of national consultant inputs will be needed to complete the ongoing civil works contracts by September 2012. The construction supervision consultant under the provincial highway component effectively assisted the PMU in project implementation. However, the international consultant firm withdrew after the ADB loan closing. The remaining works are being implemented by a local consulting firm that was associated with the original consulting consortium. Currently, the local consulting firm works closely with the PMU. It is estimated that another 459 person-months of consulting inputs will be needed to complete work in 2013.
27. The consultant for the provincial institutional development mobilized late due to security concerns and the unavailability of some team members. The consultants assisted CWD in institutional development and capacity building. Three overseas study tours were organized and a large number of in-house training sessions were conducted. The consultants submitted the final report in June 2009. A total of 217 person-months of consulting services were provided, including 32 person-months from international and 185 person-months from national consultants. The consultants under the TA loan mobilized timely. The consultants submitted the Final Report in October 2009. A total of 92 person-months of consulting services were provided, including 6 person-months from international and 86 person-months from national consultants.
28. The performance of the civil works contractors was generally satisfactory. All of the civil works contractors were national construction firms with inadequate expertise, equipment, and funds. The contractor for the ICB-1 and ICB-3 performed satisfactorily and completed the work generally on schedule. The highway that was constructed is in good condition after one year. However, the performance of the contractor for the other two contracts was unsatisfactory because of delays and a lack of funding resources. The performance of the contractors for provincial highways was partially satisfactory because of inadequate capacity and slow work progress. Because of the security conditions, only Balochistan local contractors were able to work under the project. The PMU for the provincial highways component expects to raise the bidding rate to attract more bidders. The contractors’ capacity was slightly improved through the project implementation and capacity-building programs under the project.
K. Performance of the Borrower and the Executing Agency
29. The performance of the borrower and the executing agencies was partly satisfactory. During implementation, an adequate organizational framework was established for project management. Despite some delays, the government provided a large amount of counterpart funds to the project. NHA and CWD exercised close coordination and regular monitoring of work progress and quality control. The PMUs, with assistance from the consultants, prepared the project progress reports. The project accounts and financial statements were audited by the external chartered accountants acceptable to ADB. However, NHA submitted its financial reports late. With ADB assistance, the capacity of NHA and CWD was significantly improved under the project. NHA and CWD facilitated and supported ADB’s review missions during implementation and at completion. However, the government failed to prepare the project completion reports as requested by ADB.14
14 The government submitted an incomplete project completion report on the national highway component to ADB during the ADB project completion review mission, and did not prepare a project completion report on the provincial components.
9
L. Performance of the Asian Development Bank
30. The performance of ADB was satisfactory. The project was initially implemented from ADB headquarters and the implementation responsibility was transferred to the Pakistan Resident Mission in November 2009. During implementation, ADB was closely involved in identifying and resolving issues through regular review missions. ADB conducted five loan review missions and seven special review missions, including the midterm review mission in 2008. However, some of the review missions were unable to visit the project sites in Balochistan due to security constraints. Approval of documents at both the processing and implementation stages (e.g., procurement of civil works and consulting services) was punctual. All claims for payment were processed without unreasonable delays. ADB extended the loan closing date for one year, but closed Loan 2019 in August 2010 because the loan extension milestones were not achieved.
III. EVALUATION OF PERFORMANCE
A. Relevance
31. Although there were many challenges during implementation, the project is rated highly relevant and in line with the government’s strategy for economic growth and poverty reduction through developing highways and rural roads. The project objectives are consistent with national road transport needs and Pakistan’s infrastructure development priorities. The project has improved the road connectivity in the poorest area of Pakistan, facilitated trade, and improved the performance in the road subsector.
32. Since joining ADB in 1966, Pakistan has received more than $20.89 billion in loans, of which $2,178.9 million was for the transport sector.15 ADB helped build or upgrade nearly 1,000 km of roads and highways, benefiting more than 2 million people. A multitranche financing facility for the National Trade Corridor Highway Investment Program was provided to improve key sections of motorways and expressways. Pakistan is a participating country of the Central Asia Regional Economic Cooperation (CAREC) Program, which promotes development through cooperation in the priority areas of transport, trade facilitation, trade policy, and energy. Since 2001 the program has mobilized more than $16 billion worth of investments in the transport, trade, and energy sectors. ADB assistance to the transport sector in Pakistan in general and the project in particular are highly relevant for the government’s development strategy.
B. Effectiveness in Achieving Outcome
33. The project is rated effective in achieving its outcome. Despite highly challenging circumstances relating to security, unprecedented floods, and earthquake, the majority of the project outcome has been achieved. About 120 km of national highways (out of the total 230 km) and 189 km of provincial highways (out of the total 426 km) were reconstructed; the remaining road sections are under reconstruction. The reconstructed highways have significantly improved the connectivity in the project area. Travel time and the vehicle operating costs on the completed roads were reduced by 59% and 20–40%, respectively, which are much higher than those anticipated at appraisal (each by at least 25%). Although the cross-border development component was canceled, the project is likely to benefit a total of about 761,000 people along the national highways and about 238,700 people along the provincial highways and rural roads.
15 Pakistan Fact Sheet, www.adb.org/Pakistan.
10
The institutional development component and capacity-building programs have significantly improved the road subsector’s performance. The TA loan was implemented successfully. While the ADB loan was closed in August 2010, the government plans to complete the ongoing reconstruction of the remaining 110 km of national highways and 237 km of provincial highways by September 2012 and September 2013, respectively. The total length of provincial highways and rural roads was reduced from 1,100 km anticipated at appraisal to 426 km, so the benefits from the provincial highway and rural roads may be reduced from those anticipated at appraisal. The project’s full effects should be evident after its full completion.
C. Efficiency in Achieving Outcome and Outputs
34. The project is rated efficient in achieving its intended outcome and outputs. This assessment is made mainly based on the completed components of the project. Works on some project road sections remain ongoing, so it is difficult to assess the efficiency of these sections due to the unavailability of data and uncertainty of the completion dates. During the ADB project completion review mission, the latest traffic counts for some selected roads were collected. The traffic increase rates were generally in line with those estimated at appraisal.16 In comparison with that at appraisal in 2003, the traffic in 2011 increased by an average of 3.2% per year for national highways and 6.1% per year for provincial highways. The traffic on the Quetta–Kalat section increased by 5.3% per year, but traffic on the border section of the Quetta–Chamman highway increased by only 1.2% per year. The truck traffic on the national highways increased sharply on average by about 24.3% per year. On the provincial highways, traffic on the Zhob–Mir Ali Khail–Khajuri Kuch section, a key road connecting Balochistan with other provinces, increased significantly. Bus traffic on the provincial highways also increased significantly, on average by about 10.2% per year. Taking into account socioeconomic development in the project area, traffic should increase more rapidly after project completion. Future traffic was adjusted using the latest traffic counts and the adjusted future traffic increase rates.
35. Based on the latest project cost estimates and revised traffic forecasts, the project completion review mission reevaluated the economic internal rate of return (EIRR), using similar methodology to that adopted at appraisal. The EIRR was recalculated at 22.6% for national highways and 13.2% for provincial highways, which are above a discount rate of 12%. The project is thus considered economically viable. However, the EIRRs are lower than those estimated at appraisal,17 mainly due to the higher unit construction costs. The sensitivity analysis results show that the project continued to be economically viable for most scenarios. If a 20% maintenance cost increase were combined with a 20% benefit reduction, the EIRR for the project would be 15.0%. The sensitivity test also shows that the EIRR is more sensitive to changes in benefits, which means that the government needs to pay attention to socioeconomic development in the project area, promote cross-border transport, foster transport services, and increase incomes for rural users. Appendix 11 presents the traffic analysis and economic reevaluation.
16 Four to seven percent per year by different vehicle types. 17 At appraisal, the EIRR for the selected two national highways were 33.7% and 40.4%, respectively. The EIRR was 14.8–48.9% for the six core provincial roads.
11
D. Preliminary Assessment of Sustainability
36. The project is rated less likely to be sustainable, due to the following:
(i) Road maintenance. The lack of an adequate budget for road maintenance threatens the project’s sustainability. NHA estimated that the shortfall in meeting the road maintenance requirement was about 27% in 2010–2011. Many sections of the provincial highways in the project area were damaged by landslides, floods, and heavy traffic, but they were not timely repaired. Although the Balochistan Provincial Government allocated a proportion of its development expenditure to the road subsector in its budget for 2011–2012,18 most of budget was for new construction. (ii) Government budget. Construction of the remaining road sections is planned to be fully financed by the government. Along with rapid road development and due to economic difficulties, the government has faced significant budget constraints. For the national and provincial highways, budget availability will be a constraint for timely completion of the project. (iii) Government’s strategy on road development. The government has assured to give high priority to road development and made strong efforts on the national road network development. With assistance from the international aid community, the national highway network has been significantly improved. The NHA Balochistan office is committed to complete remaining two incomplete contracts by September 2012. This will depend on continued budget allocations. (iv) Axle load control. Vehicle overloading has become a perennial issue in Pakistan. The provincial road (Sajavi–Duki) under the project was 93% completed in mid-2011, but has been badly damaged by overloaded trucks.20 Many sections need to be repaved. NHA is installing weigh stations at strategic locations along the highway network. However, effective enforcement of weight limits remains an issue.
E. Impact
1. Environmental Safeguards
37. At appraisal, an initial environmental examination (IEE) was prepared for two national highways and six provincial highways. The IEE indicated that the project roads would generally follow the existing alignments and would not pass through any environmentally sensitive areas. Hence, the project would not have significant adverse environmental impact. The monitoring of the environmental impacts during implementation was institutionalized through an environmental management plan that covers mitigation measures to offset any adverse environmental impacts. The monitoring and reporting of these actions was included in the bidding documents for civil works and consultancy contracts. The PMUs and the contractors generally complied with the environmental monitoring requirements and took precautions to prevent any adverse environmental impact during design and construction. Noise, air pollution, soil erosion, and the availability of clean drinking water and proper sewage disposal at contractor’s camp facilities were monitored. However, traffic management during construction, including maintenance of diversions and detours by the contractors, remained weak.
18 Balochistan Government White Paper on Budget 2011–2012, http://www.balochistan.gov.pk/. 20 The road section connects to a coal mine.
12
2. Land Acquisition and Resettlement
38. At appraisal, the project was designed to avoid or minimize the land acquisition and involuntary resettlement impact. Land acquisition and resettlement plans were prepared in accordance with ADB’s Involuntary Resettlement Policy (1995). To expedite the project, the Loan Agreement for Loan 2019 was amended to allow construction work to start for the road sections where land acquisition and compensation for affected persons were completed. 21 During implementation, there were several occurrences of noncompliance with ADB’s policies. The compensation to affected persons was not fully paid due to a dispute among the communities involved. An ADB special review mission fielded in late 2007 helped prepare a detailed action plan to comply with ADB’s policy on involuntary resettlement, which was confirmed with CWD and NHA. ADB’s midterm mission in 2008 found that both NHA and CWD failed to meet the targets in the action plan and requested them to comply with ADB’s policy by updating the land acquisition and resettlement plans.
39. To approve the loan extension, ADB requested the government for additional documents on land acquisition and resettlement, including revising or updating the plans, engaging an external monitoring agency, and confirming the status of compensation and assistance to the affected persons. In November 2009 ADB received most of the documents from NHA, including an internal monitoring report. The report noted that 230.97 acres had been acquired and another 96.82 acre would be acquired for the national highway component. In all, 2,525 persons were affected and 1,536 persons received compensation. ADB’s second quarterly mission in July 2010 found that most of the milestones related to land acquisition and resettlement had not been complied with. These included hiring external monitoring agencies, completing all short resettlement plans, and confirming the availability of funds by CWD. Finally, NHA hired an external monitoring agency and an independent resettlement monitoring report was submitted to ADB in November 2010. The ADB project completion review mission learned that all the funds for land acquisition and resettlement had been released, but some funds had not been allocated to individuals due to disputes among local communities and authorities.
3. Socioeconomic Impacts
40. During implementation, the required monitoring and evaluation activities were not conducted under the national and provincial highway components. However, the project has had significant social impacts, especially along the completed road sections. Traffic increased rapidly on the national highways. A gas station owner told the project completion review mission that his daily sales had more than doubled, from about 4,000 liters to 10,000 liters after completion of the highway. A large number of roadside businesses recently opened, including gas stations, restaurants, garages, car washes, hotels, transport businesses, and rest areas, which use a substantial amount of local labor. The total number of beneficiaries was estimated at 760,976 for the national highway component and 238,679 for the provincial highway component.22
41. Under the TA loan, 10 water tanks and 38 pit latrines were constructed in 10 villages, benefiting 1,119 households or a minimum population of 9,156. Community-based training on the formation and capacity building of road contracting was provided in five districts. A study of
21 The Loan Agreement for Loan 2019-PAK had the clause that states: ―counterpart funds and disbursements shall be provided promptly to affected people, with agreed compensation provided to them before any land is taken or civil works contracts awarded.‖ 22 Twenty percent of the district population in five districts of the project area.
13 the project’s socioeconomic and poverty impacts was carried out and included a survey of 271 selected households located in 10 villages along the Zhob–Mir, Ali Khail–Khajuri Kach road and Katch–Sharag–Harnai road. The survey collected random socioeconomic data and main findings were recorded in the TA report.23 Appendix 12 provides a summary of the TA.
IV. OVERALL ASSESSMENT AND RECOMMENDATIONS
A. Overall Assessment
42. Overall, this project is rated successful. The project was highly relevant and in line with the government’s development strategy and ADB’s country partnership strategy. Despite the highly challenging circumstances experienced during implementation—deteriorated security situation, flood, earthquake, and sharp increases in prices of construction materials, the majority of the project outcome anticipated at appraisal has been achieved and the project outcome will be further improved once the ongoing works financed by the government are completed. The reconstructed project highways and rural roads have effectively improved the connectivity in the project area. The project was efficient in achieving its intended outcome and outputs based on the completed components of the project. The institutional development and capacity- building programs have contributed to road subsector development in Balochistan. The TA loan was implemented successfully and has improved the infrastructure in some poor villages and increased awareness of social protection and education. Nevertheless, the project experienced non-compliance of some covenants and conditions, and implementation delays resulting in works still ongoing on some road sections. Sustainability of the project roads is also an issue that needs to be addressed.
B. Lessons
43. Several lessons can be drawn from the project and need to be incorporated into ongoing and future ADB-assisted projects in Pakistan. The main lessons are summarized below.
(i) Project design. The project comprises several components comprising national highways, provincial highways and rural roads, cross-border development, institutional development, and community development. These components were implemented by different government agencies with limited coordination. Combining all of these components into one project was difficult for both ADB and the government to manage. If a project is so comprehensive, a PMU at the national level should be established to coordinate its implementation. (ii) Local financing capability. The project experienced substantial delays due to security conditions, which led ADB to close the loan before completion of all the components. As a result, and because of weak government financing, the project experienced serious financial problems. ADB needs to pay more attention to local situation and assist in timely project completion. Only fully completing the project, the benefits anticipated can be revealed. (iii) Price escalation. The global price for construction materials rose sharply during implementation.24 The delays in project implementation made this problem more serious. For some provincial roads under the project, retendering was conducted, but the low rate is unlikely to attract bidders. For future ADB-assisted projects, reasonable price contingencies should be included in the investment plan.
23 Final Report, Community Development and Poverty Reduction Project (Loan 2020-PAK), October 2009. 24 In 2003–2010, the construction material prices and labor cost were increased by 17% for cement, 210% for steel, 234% for diesel, 248% for labor, and 320% for bitumen.
14
(iv) Land acquisition and resettlement. Project implementation encountered land acquisition and resettlement challenges. ADB amended the Loan Agreement, which allowed construction to start on the sections where land issues had been resolved. ADB needs to make the government well aware of ADB’s safeguard policy and prepare a more feasible loan agreement under future projects. (v) Private sector participation. All of the contractors were local, with inadequate funding, expertise, and equipment, which contributed to implementation delays. With rapid road development in Pakistan, such problems may be worsening. To promote capacity development of local and private contractors, ADB needs to strengthen the capacity-building programs, especially in the area where local construction capacity is lacking.
C. Recommendations
1. Project-Related 44. Further actions or follow-up. The remaining road sections will likely be completed by the most recent schedule. Before it is fully completed, the project benefits anticipated at appraisal cannot be determined. It is suggested that ADB help the government complete the project as soon as possible. Before this, ADB needs to undertake due diligence of the project’s details, including the actual progress of the remaining project roads, the latest status of land acquisition and resettlement, and financial and technical difficulties.
45. Project monitoring. The project failed to conduct required monitoring and evaluation activities, or complete the baseline survey and after-completion survey. It is recommended that the government conduct the survey as soon as possible for the completed road sections. The data collected should compare with those at appraisal. The government also needs to conduct full monitoring and evaluation activity after completion of ongoing works.
2. General
46. Better coordination. This project covers several subsectors and was implemented by different government agencies. This caused a challenge for ADB and the government to manage implementation. The cross-border development component was removed. If several components need to be included to maximize the project benefits, it is recommended that a coordination mechanism be established at the national level.
47. Enhancing ADB project supervision. Despite being rated satisfactory, ADB’s performance needs to be further improved. There were several changes in project officer during implementation. There was only one member during several ADB review missions and several missions could not visit the project sites due to security conditions. The project administration was later transferred to the Pakistan Resident Mission. These resulted in challenges to ADB in project administration. ADB needs to enhance project supervision by keeping a project officer as long as possible, fielding regular review missions with adequate expertise, developing the project administration capacity of its resident mission, and enhancing effective coordination between resident mission and the headquarters.
48. Road safety. During the site visit, the project completion review mission noted that many vehicles were speeding and many buses had passengers sitting on the roof. The average accident rate was about 6-7 per month on the Quetta–Kila Abdullah highway and the fatality rate
15 was about 3 persons per month. Traffic laws and regulations need to be enforced and public awareness about road safety to be raised.
49. Public transport development. Public transport in the project area was inadequate. The government needs to promote public transport and provide low-cost transport services to the local population. A well-developed public transport system will substantially increase accessibility of the poor to economic opportunities and social services.
16 LATEST PROJECT STATUS FOR LOAN 2019
(as of 30 November 2011)
Target 1 Appendix No. Scope/Components Quantity Status up to Project Completion Completion Date Remaining Issues/Remarks Review Mission
Civil Works 1. National highways 1.1 Kalat – Khad Kucha 60.00 km Completed 1.2 Khad Jycga – Quetta 54.00 km In progress, 48% completed September 2012 Fund availability, contractor’s capacity 1.3 Quetta – Kila Abdullah 59.80 km Completed 1.4 Kila Abdullah – Chaman 56.60 km In progress, 50% completed September 2012 Fund availability, contractor’s capacity
2. Provincial Highways 2.1 Zhob-Mir Ali Khel road 91.00 km Transferred to BDA, 43% completed April 2013 Transferred to Balochistan Development Authority 2.2 Kach-Shahrag – Hamai road 93.40 km In progress, 35.5% road and 45% Government and contractors are not interested to Bridge completed complete the work 2.3 Dureji – Lohi road 30.00 km Completed 2.4 Sajavi – Duki road 29.09 km in progress, 93.37% completed December 2011 Inadequate release of funds, heavy axle load Vehicles are moving on the road. 3. Rural access road 3.1 Dera Allah Yar – Hair Din road 40.20 km Tending in progress December 2013 Twice tender called for LCB-3, low rates fixed by Government, no bidders participated tendering 3.2 Dera Allah Yar–Usta Mohammad road 41.50 km LCB-19: stay issued by H.Court December 2013 Three times tender called for LCB-21, Government LCB-20:19.39% completed set low rates, no bidders participated. LCB-21: tending in process. 3.3 Khurkhera – Kanraj road 25.72 km Completed 3.4 Chad Sher Ali – Chad Gambola road 48.00 km Completed 3.5 Gandawah – Kotra – Pir Chatta road 27.37 km Completed
4. Cross-Border Development Deleted To be implemented by government using other fund Equipment 4.1 Provincial institutional development Completed 4.2 Cross-border development Dropped off Consulting Services 4.3 National highways–construction supervision Ongoing December 2012 4.4 Provincial institutional development 217 pm Completed 62% of loan allocation disbursed 4.5 Provincial roads – detailed design and 497 pm Ongoing Being implemented by a domestic consulting firm Construction supervision ICB = international competitive bidding, km = kilometer, LCB = local competitive bidding, pm = person-month. Source: ADB project completion mission.
PROJECT FRAMEWORK Design Summary Performance Results Monitoring Mechanisms Assumptions and Risks Indicators/Targets Impact Enhanced economic growth and Increased gross domestic Likely to be achieved Provincial economic data and Complementary investments reduced poverty in Balochistan product and reduced poverty Annual fiscal receipts statistics and initiatives of other and neighboring areas (provincial own) increased by economic infrastructure, 25% in 2010–2011 social services, and programs Outcome 1. Improve connectivity and Improve year-round access Likely to be achieved Progress reports Neighboring governments are access to social services and to rural areas committed to cross-border economic opportunities for the Achieved Provincial economic indicators trade. Economic conditions poor in Balochistan Reduce travel times by at Travel time reduced by 59% on and statistics favor increased trade. Other least 25% upon completion the completed roads unforeseen barriers to trade 2. Increase efficiency, reduce cost of project roads Project performance do not exist nor are they and time for movement of goods, Achieved monitoring imposed. Maintenance vehicles, and passengers Increase cross-border Export to Afghanistan in 2011 funding is adequate and between Pakistan and movement of freight and ($1,395 million) increased by Project completion report sustained. Regulations to Afghanistan and Central Asia passengers about 2.8% from 2009 and prevent overloading of trucks 232.2% from 2003. Most goods Cross-border statistics are adequately implemented were transported by road
Achieved Stability, regional peace, Reduce transport costs for The vehicle operating cost ADB review missions confidence building, and cross-border freight (VOC) cut by 20–40% on the development of relationships movement by at least 25% completed roads continue. Government by 2009 commitment to regional economic cooperation and trade is strong Outputs 1. Provincial institutional As per policy matrix and Likely achieved Monthly progress reports Involved agencies and development action plan agreed upon with a. CWD reorganized in 2007 by stakeholders are in close a. Institutional strengthening ADB project review missions establishing a RMU/RESAC ADB review missions coordination.
and organizational changes by 2006 Directorate, including a road 2 Appendix at Communication and safety cell Audited annual financial Actions implemented as Works Department (CWD) statements agreed with ADB b. Road user charges b. The consultant proposed introduced, road imposing fees, levies, or Project completion reports Weak maintenance practices management practices and charges redesign processes Benefit monitoring and Reform program implemented
improved evaluation as scheduled 17 c. Strengthened capacity in c. Road maintenance
planning and road management system Award of civil works contracts
18
Appendix 2 Design Summary Performance Results Monitoring Mechanisms Assumptions and Risks Indicators/Targets maintenance at CWD and in (RMMS) redeveloped, RMU is timely districts staffs trained, and manuals
on road maintenance Award of civil works contracts operation provided. RMU is timely staff would distribute the RMMS to all Executive District Office administrative centers d. Strengthened axle-load d. Weighing equipment for control measuring axle loads of trucks purchased by CWD
e. Improved road safety Accidents reduced by 50% in e. Not achieved. The fatality 2008 rate for road accidents in 2006 (221 persons) was 67% higher than that in 2003 (132 persons) f. Increased private-sector Increased 40% by 2007 f. All contractors under the involvement (base year 2003) project were private. Most of the large road maintenance work is contracted to the private sector g. Increased involvement of g. The TA loan enabled the road-user associations in beneficiaries and CWD to various areas of provincial become involved in road road development projects
Partly achieved 2. Improved 1,100 km of Completed by June 2008 at This was reduced to 426 km provincial roads in appropriate quality and cost during implementation. 189 km Balochistan completed and 237 km under construction
Likely achieved 3. New cross-border facility at Completed in June 2006 Dropped from the project, but Chamman constructed and will be implemented by the operational government under another project
Design Summary Performance Results Monitoring Mechanisms Assumptions and Risks Indicators/Targets 4. Improved 247 km of national Completed by June 2008 at Likely achieved highways of regional appropriate quality and cost 119.8 km completed and 110.6 significance km under construction Activities Partly achieved 1. Institutional reform program Implemented 2003–2005 a. Propose to establish a Proposal by Balochistan Capacity to implement system a. Strengthen planning and Highway Planning and Provincial Government (BPG) exits budget capacity with Design Directorate delegation of tasks and Commitment to reform and separation from executive institutional changes functions continues b. Expand road asset January 2004–December b. RMMS redeveloped with Proposal by BPG management system at 2007 link to HDM4, and Institutional capacity exists CWD equipment for road data collection procured Rules are enforced c. Develop new maintenance January 2004–December c. Manuals on road Progress reports procedures, revise 2007 maintenance operation Road safety measures are maintenance manuals, and prepared and two pilot effective. Local contractors prepare contracts contracts awarded respond. Risks are d. Analyze maintenance January 2004–December d. Assessed as being less appropriately shared funding requirements and 2006 than 10% of what was design a charging and actually required. The funds Advance procurement action funding mechanism for road could be managed by results in speedy asset preservation imposing fees, levies, or preconstruction activities, with charges timely award of contracts. e. Build capacity at Road Appointment of three core e. RESAC established in 2007, Consultant report CWD Environment and Social staff by end 2003 and an environmental impact proposal with action plan Assessment Cell (RESAC) training conducted assessment manual at CWD prepared, and training provided f. Implement axle-load control January 2004–December f. A system axle-load survey Progress reports and reviews program with awareness 2006 proposed, and weighing and information campaigns equipment purchased g. Implement provincial road January 2004–December g. A 5-year road safety action Progress reports and safety action plan 2006 plan developed Reviews h. Increase private sector 10% contracted out in 2005 h. A large number of workers share in periodic and routine 20% contracted out in 2006 used for routine road maintenance maintenance and most large 2 Appendix maintenance works contracted to the private sector
19
20
Design Summary Performance Results Monitoring Mechanisms Assumptions and Risks Appendix 2 Indicators/Targets 2. Implement provincial road January 2004–December Partly achieved component 2008 Started in Q1 2006 and will be BPG proposal and confirmation
fully completed by Q4 2013
3. Implement action plan for Implemented 2004–2006 Eliminated Progress reports and reviews improved cross-border movements 4. Develop, design, and construct Implemented 2004–2006 Eliminated Progress reports and reviews a new cross-border facility at Chamman with improved trade Partly achieved 5. Implement national highway Started in Q1 2006 and will be component fully completed by Q3 2012 Inputs 1. Project funding totaled $267.3 Loan approval in Oct 2003; Loan 2019 Loan agreement signed Counterpart funds are million: ADB, $185.7 million and effectiveness in January 1. Project cost: $213.2 million: on time adequate and available on (69.5%); Government of 2004 ADB: $113.7 million time Pakistan, $81.6 million (30.5%) (53.3%); Annual financial statement Government: $102.2 million Advance action results in 2. Consulting services (46.7%). ADB’s loan ledger speedy recruitment of a. Design and construction January 2004–June 2009 2. PIDC ($ million) consultants supervision, preparation of a. Equipment 0.6 Progress reports subprojects, and benefit b. Consultants 1.7 Timely preparation and monitoring for CWD 3. PAC Subproject approval requests implementation of subprojects component; institutional a. Land 1.9 and approvals development and capacity b. Civil works 86.8 Good performance of building at CWD c. Consultants 4.9 Periodic review missions contractors b. Design and construction January 2004–June 2008 4. NHA supervision, and benefit a. Land 3.6 monitoring of NHA b. Civil works 103.3 component c. Consultants 2.7 5. Management 1.0 3. Civil works contracts 6. Financial charges 6.7 a. National highways January 2005–June 2009 b. Provincial roads January 2005–June 2009 Loan 2020 1. TA cost: $0.689 million: ADB: $0.44 million (63.7%); Government: $0.25 million (36.3%). ADB = Asian Development Bank, CWD = Communication and Works Department of Balochistan, HDM4 = highway development and management tool (version 4), NHA = National Highway Authority of Pakistan, NHC = national highway component, PIDC = provincial institutional development component, RMU/RESAC = Road Maintenance Unit/Road Environment and Social Assessment Cell, PAC = provincial access component, RMMS = road maintenance management system, TA = technical assistance.
Appendix 3 21
SUMMARY OF PROVINCIAL INSTITUTIONAL DEVELOPMENT COMPONENT
A. Introduction
1. Under the Balochistan Road Development Sector Project (Loan 2019), financed by the Asian Development Bank (ADB), a provincial institutional development component was designed and implemented to help the Communication and Works Department (CWD) of Balochistan Province strengthen its capacity for project implementation, road asset management, road maintenance, environmental plans, and the social aspects of road development.
2. A consultant team was recruited to implement this component.1 The consultant team was mobilized on 27 August 2005 and finished its work on 30 June 2009. A final report was prepared and submitted to ADB. The main activities and outputs of the component follow.
B. Road Maintenance Enhancement and Sustainability
3. Balochistan’s transport problems are exacerbated by the province’s geography and demographic features. The existing institutions lacked the capacity for effective planning and maintenance of the road network. The basic ingredients of road planning were missing, maintenance was neglected, and the budget lacked details as to where expenditures should be allocated. The problem was partly resolved by the establishment of the Road Maintenance Unit (RMU) and redevelopment of the Road Maintenance Management System (RMMS). Under the project, RMU staffs were fully trained in road data collection and operation. Manuals on road maintenance operation were provided. RMU staffs were to distribute the RMMS to all Executive District Office (EDO) administrative centers. A maintenance specification was prepared and submitted to CWD to enhance maintenance procurement. The amount allocated for maintenance funding was assessed as being less than 10% of that actually required for a sustainable road network. The required funding could be managed by imposing fees, levies, or charges to sustain the road network.
C. Axle-Load Control
4. A study revealed that over 35% of drivers were illiterate and did not understand the full extent of the law. Under the loan, CWD purchased weighing equipment to measure axle loads of various types of trucks. RMU staffs were trained in the use of the portable weigh scales. It was recommended that RMU conduct a systematic axle-load survey on provincial roads where heavily loaded traffic was expected. The government needs to be encouraged to undertake a media campaign to advise all people of the requirements under the law, need for enforcement, cost to the people and environment, and the danger of overloading vehicles. CWD should arrange workshops at the provincial level to involve other stakeholders, such as policy and environment departments and provincial transport authorities, to resolve the existing situation.
D. Road Safety
5. Statistics revealed that 221 persons were killed in road accidents in 2006, a rate that was 67% higher than that in 2003 (132 persons). Driver and road user behavior in Balochistan was unsophisticated and did not generally follow the rules of the road. A road safety audit
1 SMEC International, in association with Dainich (Japan), Louis Berger (USA), ACC, NESPAK, and SEBCON.
22 Appendix 3 should be carried out by experienced traffic engineers. Fifteen RMU and CWD staffs were trained in road safety auditing and traffic management. A document was prepared detailing the requirements for undertaking road safety audits. The police agreed to implement the collection and entry of detailed accident data using a standardized form prepared by the consultants. The education department agreed in principle to allow road safety to be introduced into schools. A policy and strategy paper was prepared on enhancing road safety awareness and strengthening driver education and training on road safety. A 5-year Road Safety Action Plan was developed.
E. Environment, Social Gender, and Resettlement
6. Training was provided to CWD in project impact monitoring and environmental controls. All RMU and Road Environment and Social Assessment Cell (RESAC) staffs received 13 intensive training sessions in the use, applications, and process of environmental impact assessment (EIA). The consultants, together with PMU and RESAC staffs, completed the environmental monitoring of all contract packages. An EIA manual was produced and presented to the Project Management Unit (PMU) and RESAC. The consultants also assisted in the tendering and bid evaluation for purchasing environmental monitoring equipment. A simple social/gender development database was developed to monitor the social impact. A questionnaire was prepared for data collection, analysis, and monitoring. Several papers on the resettlement were prepared, including (i) an involuntary resettlement policy and practice, (ii) guidelines for preparing resettlement plans, and (iii) the creation of a resettlement database.
F. Institutional Reform and Reorganization of CWD
7. CWD’s organizational structure was studied, including its administrative budget, working atmosphere, and problems with contractors. A final report on restructuring CWD was prepared and submitted to the PMU in July 2008. The report noted that (i) the staff strength of CWD was out of proportion with annual budgets and workload; the staff level should be reduced from 3,283 to 1,287 within 3 years; (ii) CWD should strengthen its road and building planning and design capability by establishing a Highway Planning and Design Directorate and an Architectural Planning and Design Directorate; (iii) the field administration should be restructured into two zones with five districts per zone for the road work. A list of tasks for CWD’s reorganization was provided, which included organizational restructuring, budget provision, promotion system reform, and contract system revision.
G. Support to the District Government
8. The consultant’s report covered the full spectrum of the district government’s administration and recommended that an executive district office system be established on the basis of work load. All ―district‖ roads and buildings and all related CWD staff should be transferred to the local government and rural development ministry. Once an appropriate agreement has been reached and the roads officially transferred, the RMU should install and train all district staff in the operation of the road management system and create an effective and organized maintenance plan. The report also recommended that the RMMS be installed in selected EDO offices and that RMU train the selected district officials in the development of a road information database for each district; develop a detailed road inventory, including the condition of all roads in the province; and help districts develop a road needs budget and not just an estimate.
Appendix 3 23
H. Private Sector Participation
9. Most of the contractors for the provincial roads were unable to complete the work within the contracted schedule. The study concluded that local contractors had limited capacity and could only undertake small projects. The private sector lacked ―middle management‖ and professional and/or technical skills. The development of a Balochistan construction management standard was essential for a development strategy. The development of the private sector must encompass the two areas of project management and technical skills relating to civil work. The private sector should understand that the government wants to delegate construction work to the private sector. A comprehensive report and a full set of training programs were prepared and presented to the PMU to enable CWD to take up the challenge and train contractors to better support the road sector development in Balochistan.
I. Project Management and Assistance
10. The consultants continued to hold meetings with the PMU as required to assist in project implementation and to prepare monthly reports. The consultants repeatedly offered the contractors support to bolster their inadequate capacity. The resettlement specialist on the consultant team conducted audits and monitoring of road packages and checked the details of the land acquisition compensation and payments. The environment specialist also conducted audits and monitoring of several contract packages and offered training sessions to contractors on their responsibility in environmental mitigation measures. The RMU/RESAC staffs were fully trained in many aspects of road construction, management, and maintenance.
J. Budgetary and Financial Control
11. The consultants provided support in establishing budgetary and financial controls, including assisting the PMU with the project’s management and control. The consultants developed a simple database covering all project components that were to be reported to ADB, all contract packages, and the tracking of local contributions from the government. The consultants also noted that the PMU’s administrative costs far exceeded the contractors’ monthly outputs due to the slow progress of the construction.
K. Training Programs
12. Three overseas study tours were held in Australia, the UK, and Malaysia, focusing on traffic management, road financing, road maintenance, and project programming and control. Substantial training was provided to CWD staff in many aspects of road development and maintenance, including computer operation, road rehabilitation and maintenance management, road geometrics, pavement and structure design, environmental impact assessments, social development, and poverty assessment and monitoring.
24 Appendix 4
PROJECT COST AND FINANCING PLAN
Table A4.1: Cost Comparison for Loan 2019 ($ million, as of 30 November 2011) Appraisal Actual/Latest Estimation Foreign Local Foreign Local Total Cost Total Cost Item Exchange Currency Exchange Currency A. Base Cost 1. RoadProvincial Improvement institutional Component development component a. Equipment 1.5 0.5 2.0 0.4 0.1 0.6 b. Consulting services 1.6 0.5 2.1 1.3 0.4 1.7 2. Provincial access component a. Land acquisition and resettlement 3.0 3.0 0.0 1.9 1.9 b. Provincial roads improvement 71.1 46.8 117.9 52.3 34.5 86.8 c. Consulting services - detailed design and 4.7 2.7 7.4 3.1 1.8 4.9 construction supervision 3. Cross-border development component a. Civil Works 1.8 0.7 2.5 0.0 0.0 0.0 b. Equipment 1.0 0.5 1.5 0.0 0.0 0.0 4. National highway component a. Land acquisition and resettlement 1.0 1.0 0.0 3.6 3.6 b. National highway improvement 54.7 36.5 91.2 61.9 41.3 103.3 c. Consulting services - construction supervision 1.5 1.9 3.4 1.2 1.5 2.7 5. Incremental costs 4.0 4.0 0.0 1.0 1.0 Subtotal (A) 137.9 98.1 236.0 120.3 86.2 206.5 B. Contingencies 1. Physical contingencies 8.3 3.5 11.8 0.0 0.0 0.0 2. Price contingencies 7.4 3.2 10.6 0.0 0.0 0.0 Subtotal (B) 15.7 6.7 22.4 0 0.0 0.0 C. Financial Charges 1. PhysicalFront-end contingencies fee 0.9 0.0 0.9 0.9 0.0 0.9 2. PriceInterest contingencies during construction and commitment 8.0 0.0 8.0 5.8 0.0 5.8 charges Subtotal (C) 8.9 0.0 8.9 6.7 0.0 6.7 Total (A+B+C) 162.5 104.8 267.3 127.0 86.2 213.2 Note: The numbers in above table might be not exact due to rounding. Sources: Report and Recommendation of the President, ADB loan financial information system, and ADB project completion review mission.
Table A4.2: Cost Comparison for Loan 2020 ($ million) Appraisal Actual Foreign Local Total Foreign Local Total Exchange Currency Cost Exchange Currency Cost Item 1 Community infrastructure and empowerment fund0.250 0.250 0.120 0.120 2 Social protection and education fund 0.250 0.250 0.050 0.050 3 Equipment 0.070 0.070 0.000 4 Consulting services 0.250 0.250 0.262 0.262 5 Interest 0.040 0.040 0.007 0.007 6 Unalloacted/contingency 0.140 0.140 0.000 7 Others financed by government 0.250 0.250 0.250 0.250 Total (A+B+C) 1.000 0.250 1.250 1.250 0.250 1.500 Sources: Report and Recommendation of the President, ADB loan financial information system, and ADB project completion review mission.
Appendix 4 25
Table A4.3: Financing Plan for Loan 2019 ($ million, as of 30 November 2011)
Appraisal Actual/Latest Estimation Foreign Local Total Foreign Local Total Source Exchange Currency Cost % Exchange Currency Cost % ADB 162.5 23.2 185.7 69.5 102.6 11.1 113.7 53.3 Government 81.6 81.6 30.5 24.4 75.2 99.6 46.7 Total 162.5 104.8 267.3 100.0 127.0 86.2 213.2 100.0 ADB = Asian Development Bank. Note: The numbers in above table might be not exact due to rounding. Sources: Report and Recommendation of the President, ADB loan financial information system, and ADB project completion review mission.
Table A4.4: Financing Plan for Loan 2020 ($ million)
Appraisal Actual/Latest Estimation
Foreign Local Total Foreign Local Total Source Exchange Currency Cost % Exchange Currency Cost % ADB 1.0 1.0 80.0 1.3 1.3 83.3 Government 0.3 0.3 20.0 0.3 0.3 16.7 Total 1.0 0.3 1.3 100.0 1.3 0.3 1.5 100.0 ADB = Asian Development Bank. Sources: Report and Recommendation of the President, ADB loan financial information system, and ADB project completion review mission.
26 Appendix 5
DISBURSEMENT OF ADB LOAN PROCEEDS Table A5.1: Annual and Cumulative Disbursement of ADB Loan Proceeds (Loan 2019, $ million) Annual Disbursement Cumulative Disbursement Amount Year Projected Actual % of Total Amount % of Total 2004 4.180 0.992 0.87 0.992 0.87 2005 11.120 0.430 0.38 1.422 1.25 2006 15.000 27.985 24.62 29.407 25.87 2007 23.100 27.468 24.17 56.875 50.04 2008 25.000 18.434 16.22 75.309 66.26 2009 19.000 18.792 16.54 94.101 82.80 2010 0.000 19.333 17.01 113.434 99.81 2011 0.000 0.217 0.19 113.651 100.00 Total 97.400 113.651 100.00 ADB = Asian Development Bank. Source: Asian Development Bank.
Figure A5.1: Annual and Cumulative Disbursement of ADB Loan Proceeds (Loan 2019, $ million)
ADB = Asian Development Bank. Source: Asian Development Bank.
Table A5.2: Annual and Accumulative Disbursement of ADB Loan Proceeds (Loan 2020, $ million) Annual Disbursement Cumulative Disbursement Amount Amount Planned Actual % of Total ($ million) % of Total 2004 0.010 2005 0.020 2006 0.020 2007 0.160 0.144 32.90 0.144 32.90 2008 0.300 0.073 16.68 0.217 49.58 2009 0.000 0.192 43.72 0.409 93.30 2010 0.000 0.029 6.70 0.439 100.00 Total 0.439 100.00 ADB = Asian Development Bank. Note: The numbers in above table might be not exact due to rounding. Source: Asian Development Bank.
APPRAISAL AND ACTUAL PROJECT IMPLEMENTATION SCHEDULES COMPARED
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Item Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 1 Provinical Institutional Strengthening
Consultant selection
Implementation
2 Provincial and Rural Road
Civil work procurement
Construction
Consulting services
Equipment procurement
3 National Highways
Civil work procurement
Construction
Consulting services
4 TA on Community Development
Consultant selection
Implementation
At appraisal Actual Preparation, tendering, mobilization, liablity period Preparation, tendering, mobilization, liablity period Implementation Implementation
Appen
Source: Report and Recommendation of the President, ADB project completion review mission.
dix dix 6
27
28 Appendix 7
CHRONOLOGY OF MAJOR EVENTS
Date Main Event 2003 3–15 June ADB fact-finding mission 16–22 July ADB appraisal mission 22–23 October Loan negotiations in Manila 20 November ADB approval of Loan 2019 and Loan 2020 2004 17 March Loan agreement signing for Loan 2019 and Loan 2020 20 August ADB loan effective for Loan 2019 and Loan 2020 27 November–1 December ADB inception mission for Loan 2019 2005 1–4 February ADB special project review mission by Operation Evaluation Department 17 March Contract awarded for the provincial institutional development component 18 May–10 June ADB inception mission for Loan 2019, Loan 2020 Contract awarded for provincial highway design and construction 14 June supervision 1–3 August ADB procurement training at project site 14 November First contract awarded for the provincial highways (ICB-5) 19 December First loan disbursement from the government for Loan 2019 2006 4 January Contract signing for national highway construction supervision ADB project review mission for Loan 2019, Loan 2020, and other 1–10 February projects in Pakistan 2 February Contracts awarded for ICB-1 and ICB-3 of the national highways Completion of TA 4221: Cross-Border Facility and Efficient Transit 31 July Facilitation 2007 13 February Agreement signing for the TA loan 13–20 February ADB loan review mission 13 June First loan disbursement from the government for Loan 2020 30 October–14 November ADB portfolio review mission December ADB land acquisition and resettlement review mission 2008 13–19 March ADB midterm review mission for Loan 2019 and Loan 2020 20–24 October ADB loan review mission 2009 30 October Completion of the TA loan 31 December Original loan closing date for Loan 2019 and Loan 2020
Appendix 7 29
Date Main Event 31 December ADB loan closing for Loan 2020 2010 25 March ADB approval of loan extension for 12 months for Loan 2019 ADB loan review mission for Loan 2019 and Loan 2020 on quarterly 4–31 May milestones ADB approved a loan cancellation of ¥1,584,897,732 ($16.5 million 30 June equivalent) and the loan proceeds were also reallocated for Loan 2019 30 June ADB loan account closing for Loan 2020 ADB loan review mission for Loan 2019 and Loan 2020 on quarterly 19–28 July milestones 31 July Completion of ICB-3 of the national highway component 31 August Actual loan closing date for Loan 2019 31 October Completion of ICB-1 of the national highway component ADB received the ―Independent Resettlement Monitoring Report for the 11 November Kalat–Quetta–Chamman Highway,‖ which was prepared by the supervision consultants in November 2010 2011 Contract awarded to ACC for provincial highway construction 1 March supervision 8 April ADB loan account closing for Loan 2019 10–18 November ADB project completion review mission to the project site in Balochistan ADB = Asian Development Bank. Source: ADB project completion review mission.
ORGANIZATION STRUCTURE FOR PROJECT IMPLEMENTATION 30
Implementation Arrangement for National Highway Component (Construction and Maintenance) Appendix 8
NHA Balochistan Regional Office NHA Headquarters in Islamabad
General Manager General Manager ADB
Maintenance Projects Consultants at HQ
Director Accounts GOP Project ADB Project in Balochistan
ICB 1&2 ICB 3&4 Director Land
Project Director Project Director Director Admin.
Consultants in Field
Director Maintenance Assistant Director Assistant Director Assistant Director Assistant Director Deputy Director (land) (manage project) (accountant) (design, procure) Assist Director Inspector Staff Staff Staff Staff
Regional units Contractors and Suppliers Unit 1 Unit 2 Unit 6
ADB = Asian Development Bank, GOP = Government of Pakistan, HQ = headquarters, ICB = international competitive bidding, NHA = National Highway Authority. Source: ADB project completion review mission.
IMPLEMENTATION ARRANGEMENT FOR PROVINCIAL HIGHWAY COMPONENT (Construction and Maintenance)
Communication and Works Department
Maintenance Wing Construction Wing Building Wing
Secretary GOB Project ADB Project
Chief and Senior Eng. ADB Project Director
Consultants Engineers Assistant Engineers Sub-Engineers Accounting Administration IT and Drawing Supporting Branch Branch Branch Staff District Stations
DS 1 DS 2 DS 3 contracts contracts contracts
Project Director Project Director … … Project Director
Appendix 8 Appendix Road Maintenance Workers
Contractors and Suppliers
ADB = Asian Development Bank, DS = District Station/Office, GOB = Government of Balochistan. Source: ADB project completion review mission. 31
32 Appendix 9
STATUS OF COMPLIANCE WITH MAJOR LOAN COVENANTS (LOAN 2019)
Reference in Particulars Loan/Project Status of Compliance Agreement Sector 1. BPG will review CWD’s institutional capacity and staffing, LA, Sch 6, Substantially complied. and consult with ADB on recommendation measures and para. 18(a) CWD is being structured following actions to transform CWD into a modern road management recommendations of the Institutional agency, and other actions as agreed upon in the policy Development consultants. Policy matrix matrix and action plan. and action plan are being addressed. 2. NHA will continue the reform of its organization, institutional LA, Sch 6, Substantially complied. structure, and other key areas in accordance with its policy para. 18(b) Institutional reform of NHA is and institutional reform program. undergoing. The project management is more decentralized and more responsibility is delegated to NHA regional offices. 3. Private Sector Participation. The Borrower shall cause CWD Partially complied. to contract out road maintenance to private sector operations Routine and periodical road and such contracts shall attain the following percentage of all maintenance is implemented by CWD maintenance contracts award on an annual basis: 10% by district offices. Routine maintenance is 31 December 2005; 20% by 31 December 2006; 40% by 31 done by CWD maintenance workers December 2007. and periodical maintenance and large repair projects are contracted to private sector. 4. Road Sector Reform. The Borrower shall cause the LA, Sch 6, Complied with. Provincial Government to conduct a review of CWD and its para. 18(a) The provincial institutional institutional capacity and staffing within 6 months of loan development component included effectiveness and consult with ADB on the recommended substantial analysis on the CWD’s measures and actions to move CWD towards a modern road institutional reform issues. management agency and other actions as agreed in the policy matrix and action plan adopted by the Borrower and ADB. 5. Road maintenance. The Borrower shall cause NHA and LA Sch 6, Partially complied. CWD to maintain the roads improved under the project to para. 19(a) Completed road maintenance design standards and in accordance with sound mechanism is in place for both NHA maintenance practice. and CWD. The national highways under the project are well maintained. But, one of the provincial highway was damaged seriously by overloaded truck. More fund is required to keep the project highways in good condition. 6. Road Maintenance. The Provincial Government will (a) LA Sch 6, Partially complied. increase its spending on road maintenance by 5% yearly in para. 20 Road maintenance budget has real terms; (b) award three maintenance contracts covering increased reasonably in recent years, at least 500 km in total to the private sector within 24 months but still not adequate. Large of loan effectiveness; (c) award at least one performance- maintenance projects are contracted to based maintenance contract to the private sector within 24 private contractors. The provincial months of loan effectiveness; and (d) conduct a study on institutional development component road user charges and suitable sources and mechanisms for did substantial analysis on private increased funding of road maintenance and consult with participation and user charges. ADB on implementation of recommended measures. Environment 1. Road construction and maintenance will be carried out as LA, Sch 6, Complied with. required under the Government’s environmental laws and para. 8 The construction was under the regulations and ADB’s environmental guidelines including (a) government’s law and ADB appropriate selection of quarry and borrow sites and their environment guidelines. Appropriate rehabilitation after use; (b) proper disposal of soils and requirement to environment protection construction materials; (c) use of sound environmental was incorporated in the civil work design and construction techniques that ensure slope contracts. Environment monitoring was stability and drainage; and (d) minimization of construction conducted by the consultants and the
Appendix 9 33
Reference in Particulars Loan/Project Status of Compliance Agreement impacts such as dust, diversion of stream flow and increase PMUs. turbulence and equipment noise. 2. When project roads pass through or near protected or LA, Sch 6, Complied with. sensitive areas (e.g., nature reserves, parks, conservation para .9 The project would generally follow areas, biodiversity reserves, or cultural and historical sites), existing alignment and not pass rapid assessment will be carried out before any construction through any environment sensitive work starts. BGD will ensure cooperation with the areas. During construction, both responsible authority in preparing and implementing contractors and consultants took great protective measures, which may include area demarcation, caution to avoid any adverse fencing, checkpoints, speed bumps, wildlife passage zones, environment impacts. patrols or other measures to protect the area from encroachment or environmental degradation due to road improvement and increased access. 3. The Borrower shall cause each of NHA and CWD to ensure LA Sch 6, Complied with. that all environmental mitigation identified in the initial para. 7 The project design and contracts environmental examination are incorporated into the project incorporated all environmental design and implemented during project construction and mitigation measures identified in the operation and maintenance. IEE. Social 1. Health Risks and Provisions. NHA and BPG will ensure that LA, Sch 6 Complied with. the civil works contracts include an information and para. 10 The civil works contacts included the education campaign on sexually transmitted diseases and information on sexually transmitted HIV/AIDS for construction workers as part of the health and disease and HIV/AIDS. The contractors safety program at campsites during the construction period. generally complied with providing clean NHA and BPG will ensure that the civil works contracts drinking water and proper sewage include legally mandated provision on health, sanitation, and disposal to camps. appropriate working conditions, including accommodation, and clean drinking water for construction workers at campsites during the construction period. 2. Illegal Trafficking of Women, Children, and Goods. The LA, Sch 6, Likely complied. Borrower will ensure that NHA and CWD enact measures, para. 14 The civil works contracted included the satisfactory to ADB, to prevent, monitor, detect, and arrest information on illegal trafficking of illegal trafficking of women and children and illegal women, children and goods. However, movement of goods. NHA and CWD will submit to ADB the project progress report didn’t quarterly reports summarizing issues addressed, progress include this issue and related actions. made and future plans for action. 3. Labor Laws. HHA and BPG shall ensure that the civil works LA, Sch 6, Likely complied. contractors comply with all applicable labor and worker para. 15 The civil work and consultant contracts safety laws, and do not employ children in construction included the clause on labor laws. The activities. NHA and BPG will set employment targets for project completion review mission women for road construction activities acceptable to ADB mission was told that large number of and will cause contractors to adhere to such targets. The local labors was used by the project. Government will provide equal opportunity for women for However, there was no M&E activities road construction activities, and will not allow contractors to conducted and the details on above differentiate wages for men and women for work of equal was not reported. value. 4. Resettlement. The Borrower shall ensure that NHA and the LA, Sch 6, Partially complied. Provincial Government implement land acquisition and para .11 In November 2009, ADB received most resettlement activities in accordance with all applicable laws of the documents required from NHA, and regulations of the Borrower and in accordance with including a monitory report. The report ADB’s policy on Involuntary Resettlement as set forth in the indicated the progress for the national agreed resettlement plans (for core subprojects) and highway component that total 230.97 resettlement framework (for noncore subprojects), including acre was acquired and another 96.82 that (i) land and rights-of-way shall be acquired in lawful and acre would be acquired. The total timely manner; (ii) compensation shall be provided at affected people were 2,525 persons replacement cost together with any entitlements as and 1,536 persons received the stipulated in the resettlement plan, with ADB’s policy to compensation. In ADB’s second prevail in the case of any difference with the Borrower’s or quarterly mission in July 2010, it was Balochistan’s law and regulations; (iii) counterpart funds and found that most of the milestones
34 Appendix 9
Reference in Particulars Loan/Project Status of Compliance Agreement disbursements shall be provided promptly to affected people, related to land acquisition and with agreed compensation provided to them before any land resettlement were not complied or not is taken or civil works contracts awarded and the project fully complied, including hiring external shall not use any emergency provisions that allow land to be monitoring agencies, completing all taken in advance payment. short resettlement plans, confirming fund availability by CWD, etc. During ADB project completion review mission, it was told that all funds for land acquisition and resettlement were released, but the some funds were still not allocated to individuals during some disputes internal communities/local authorities. 5. Resettlement. The Borrower shall cause CWD and NHA to LA Sch 6, Complied with. form within six months of the date of loan effectiveness and para. 12 For the national highways, Grievances independent committee consisting of individuals unrelated to Redress Committees were formed in the project to hear any grievances or other complaints to early stage. 20 consultation resettlement issues. committees were also formed for the affective households. Financial 1. NHA shall (i) maintain separate accounts for the project and PA, Article II, Complied with. its overall operations; (ii) have such accounts and related Section NHA established a separate account financial statements (balance sheet, statement of income 2.09(a) for the project. The financial account and expenses and related statements) audited annually, in was audited by external auditor. All accordance with appropriate auditing standards consistently audited financial reports were applied, by independent auditors whose qualifications, submitted to ADB, but not most of them experience and terms of reference are acceptable to ADB; were later than required timing. and (iii) furnish to ADB, promptly after their preparation but in any event not later than six months after the dose of the fiscal year to which they relate, certified copies of such audited accounts and financial statements and the report of the auditor’s relating thereto (including the auditor’s opinion on the use of the loan proceeds and compliance with the covenants of the Loan Agreement as well as on the use of the procedures for imprest account/statement of expenditures). 2. Balochistan shall cause CWD to (i) maintain separate PA, Article II, Complied with. accounts for the project and its overall operations; (ii) have Section CWD established a separate account such accounts and related financial statements (balance 2.09(a) for the project. The financial account sheet, statement of income and expenses and related was audited by external auditor. All statements) audited annually, in accordance with appropriate audited financial reports were auditing standards consistently applied, by independent submitted to ADB. auditors whose qualifications, experience and terms of reference are acceptable to ADB; and (iii) furnish to ADB, promptly after their preparation but in any event not later than six months after the dose of the fiscal year to which they relate, certified copies of such audited accounts and financial statements and the report of the auditor’s relating thereto (including the auditor’s opinion on the use of the loan proceeds and compliance with the covenants of the Loan Agreement as well as on the use of the procedures for imprest account/statement of expenditures). Others 1. Established, staffed, and Operating PMU/PIU. LA Sch 6, Complied with. The Project Management Unit (PMU), through the Project para. 1 Within NHA, an ADB project office was Engineering Cell, shall be responsible for Project established to manage the national management. The PMU shall be headed by a Project highway component, which is located Director and supported by other staff including two deputies in Balochistan. This office acted as the who shall be in charge of day-to-day administration of the PMU to implement the project. A
Appendix 9 35
Reference in Particulars Loan/Project Status of Compliance Agreement provincial roads. steering committee was established, which was chaired y the Chairman of The Chairman of NHA will chair a steering group, comprising NHA and assisted by senior staff the senior staff members of the NHA, which will guide the members of NHA for providing implementation of the NHC. guidance to the implementation of the national highway components. 2. Fielding of Consultants. PA, Section Complied with. In the carrying out of the Project, CWD and HNA shall 2.03(a) Both NHA and WCD hired consultants employ competent and qualified consultants and contractors, for design, construction supervision, acceptable to ADB, to an extent and upon terms and institutional development, which conditions satisfactory to ADB. followed the ADB guidelines for using consultants. 3. After the conclusion of negotiations but before signing of the LA, Sch 5, Complied with. contract, the contract as negotiated shall be furnished to para. 5(c) During implementation, all contract ADB for approval. Promptly after the contract is signed, ADB negotiation results were submitted to shall be furnished with three copies of the signed contract. If ADB for approval before signing. any substantial amendment of the contract is proposed after Substantial amendments to the its execution, the proposed changes shall be submitted to contracts and scope changes were ADB for prior approval. also submitted to ADB for approval. 4. Anticorruption. Consistent with its commitment to good LA, Sch 6, Complied with. governance, accountability, and transparency, ADB reserves para. 16(a) Anticorruption clause was incorporated the right to investigate directly, or though its agents, and in all contract documents for both possible financial or management impropriety in conducting consulting services and civil work the project. The Government, NHA, BPG, and CWD agree to packages. fully cooperate with any such investigation and extend all necessary assistance, including access to all relevant books and records as well as engagement by NHA or CWD of independent experts that may be needed for satisfactory completion of such investigations. All external costs related to the investigations will be borne by the Project. Within 5 months of loan effectiveness, BPG and NHA will also prepare an anticorruption strategy, which will be implemented during the project implementation period.
The Borrower shall ensure that within 6 months of loan effectiveness, each of CWD and NHA, in consultants with civil society, will prepare an anticorruption strategy acceptable to ADB, which will be implemented during the remaining project implementation period. 5. Project Management. In order to ensure continuity, LA, Sch 6, Complied with. transparency, efficiency and good management, NHA, BPG para. 6 The replacement of ADB project and CWD will consult with ADB on matters related to director for national highway management of the project. All matters relating to selection component was notified to ADB. or appointment, or any changes to such selection or appointment, of any project director or deputy project director, will be duly notified to ADB. 6. RESAC. CWD will establish RESAC and provide a core staff LA Sch 6, Substantially complied. including two experienced experts by December 2003 to para. 17 RMU/RESAC was operational and deal with issues such as resettlement planning and staffed by experienced expertise. management, poverty reduction monitoring, labor practices, gender analysis and environment. 7. Private Sector Participation. The Borrower will cause CWD LA Sch 6, Partially complied. to contract out road maintenance to private sector operators. para. 13 Most of the large road maintenance Such contracts will attain the following percentages of all projects under CWD are contracted to maintenance contracts awarded annually: 10% by 31 private sector. December 2005, 20% by 31 December 2006, and 40% by 31 December 2007. Within 4 months of each the dates specified, CWD will confirm to ADB the actual percentages attained.
36 Appendix 9
Reference in Particulars Loan/Project Status of Compliance Agreement
8. Transit Agreement. Within 6 months of the receipt of the LA, Sch 6, Likely complied. consultant’s report, the Government and ADB will hold a joint para 21 The TA 4221-PAK (Cross-Border workshop to review the report and identify areas for action Facility and Efficient Transit by the Government, which may facilitate increased trade Facilitation ) was completed in July between Pakistan and Afghanistan through the Chamman 2006. A workshop was conducted. border crossing. 9. Cross-Border Facility. Within 3 months of the delivery to LA, Sch 6, Likely complied. MOC of the consultant’s recommendations and plan for the para. 22 The cross-border development proposed new cross-border facility, the Government will component under the project was approve that proposal; within 24 months after the dropped off, but will be implemented by Government approves the plan, NHA will complete government with government own construction and installation of all necessary equipment in financing. 32 acre plot of land has been accordance with the plan; within 36 months of loan acquired at the Chaman border and a effectiveness, the Government will have started operating boundary wall, a small office and a the cross-border facility at Chamman. restaurant have been constructed 10. NHA and CWD shall furnish to ADB all such reports and PA, Section Complied with. information as ADB shall reasonably request concerning (i) 2.08(a) NHA and CWD provided all data and the Loan and the expenditure of the proceeds thereof; (ii) the information related to the project costs, goods and services financed out of such proceeds; (iii) the expenditures, management, and project; (iv) the administration, operations and financial outputs, which are required for condition of Balochistan; and (v) any other matters relating to preparing the project completion report the purposes of the loan. report. 11. Without limiting the generality of the foregoing, NHA and PA, Section Complied with. CWD shall furnish to ADB brief quarterly reports on the 2.08(b) With assistance from the consultants, execution of the Project and on the operation and NHA and CWD prepared all project management of the project facilities. Such reports shall be progress reports in the format submitted in such form and in such details and within such a acceptable, which were submitted to period as ADB shall reasonably request, and shall indicate, ADB timely. among other things, progress made and problems encountered during the period under review, steps taken or proposed to be taken to remedy these problems, and proposed program of activities and expected progress during the following period. Source: ADB project completion review mission.
Appendix 9 37
STATUS OF COMPLIANCE WITH MAJOR LOAN COVENANTS (LOAN 2020)
Reference in Loan/Project Particulars Agreement Status of Compliance Financial 1. The Borrower, through the Provincial Government, shall Substantially complied. ensure that CWD appoints an independent auditor A international consulting entity was acceptable to ADB to routinely monitor and annually recruited to manage and monitor the evaluate and document progress with the execution of (i) TA funds. Community Infrastructure and Empowerment Fund and (ii) Social Protection and Education Fund. Such auditors will be replaced every two years. Others 1. Established, staffed, and Operating PMU/PIU Complied. Within four months of effective date, the Borrower shall A Project Director was in place. cause the appointment of a Project Director to provide overall direction and management of the (i) Community Infrastructure and Empowerment Fund and (ii) Social Protection and Education Fund. In selection such Project Director, consideration will be given to the person’s successful experience in community development programs in rural areas. 2. Fielding of Consultants PA, Section Complied with. In the carrying out the project, Balochistan through CWD and 2.03(a) An international consulting entity and the selected NGOs, shall employ competent and qualified two local NGOs were recruited to consultants and contractors, acceptable to ADB, to an extent implement the TA. and upon terms and conditions satisfactory to ADB.
3. After the conclusion of negotiations but before signing of the LA, Sch 5, Complied with. contract, the contract as negotiated shall be furnished to para. 5 ADB for approval. Promptly after the contract is signed, ADB shall be furnished with three copies of the signed contract. If an substantial amendment of the contract is proposed after its execution, the proposed changes shall be submitted to ADB for prior approval. 4. Balochistan shall make available, promptly as needed, the PA, Section Complied with. funds, facilities, services, equipment, land and other 2.02 The PMU provided all required resources which are required, in addition to the proceeds of resources for carrying out the TA. the loan, for carrying out of the project. 5. Balochistan, through CWD, shall furnish to ADB all such PA, Section Complied with. reports and information as ADB shall reasonably request 2.09 (a) concerning the loan and the expenditures of the proceeds thereof; the goods and series financed out of such proceeds; the project; the administration, operations and financial condition of Balochistan, and any matters relating to the purposes of the loan. 6. Without limiting the generality of the foregoing, Balochistan, PA, Section Complied with. through CWD, shall furnish to ADB brief quarterly reports on 2.07(b) A final report was prepared by the the execution of the project and on the operation and consultants, which included the details management of the project facilities. Such reports shall be of the TA implementation. submitted in such form and in such detail and within such a period as ADB shall reasonably request, and shall indicate, among other things, progress made and progress encountered during the period under review, steps taken or proposed to be taken to remedy these problems, and proposed program of activities and expected progress during the following period. Source: ADB project completion review mission.
38 Appendix 10
SUMMARY OF CONTRACT PACKAGES
No. of Procurement Original Contract Actual / Revised Contract Cost No. Name of Road / Contract Constracts Contractor / Consultants Package Date Currency Amount Totala $ Equivalentb ADB Finance ($) 1 National Highways 1.1 Kalat - Khad Kucha 1 Saadullah Khan & Bros. ICB-1 06/02/06 PRs 1,318,584,106 2,090,160,663 23,687,224 14,686,079 1.2 Khad Jycga - Quetta 1 Husnain Cotex Ltd. ICB-2 06/02/07 PRs 1,436,080,647 2,995,900,000 33,951,723 11,318,179 1.3 Quetta - Kila Abdullah 1 Saadullah Khan & Bros. ICB-3 06/02/08 PRs 1,426,718,383 2,236,814,831 25,349,216 15,716,514 1.4 Kila Abdullah - Chaman 1 Husnain Cotex Ltd. ICB-4 06/02/09 PRs 1,461,213,847 1,790,680,000 20,293,291 11,006,142 Sub-total 5,642,596,983 9,113,555,494 103,281,454 52,726,914 2 Provincial Highways 2.1 Zhob - Mir Ali Khel Road 1 M/s Husnain Cotex Ltd. Lahore ICB-5 14/11/05 PRs 1,447,446,820 1,310,865,260 14,855,681 9,210,522 2.2 Kach -Shahrag - Harnai Road 1 M/s Husnain Cotex Ltd. Lahore ICB-7 14/11/06 PRs 1,305,909,437 2,066,569,437 23,419,871 11,204,076 2.3 Dureji - Lohi Road 2 Malik Abdul Qayum Kakar LCB-13&14 29/07/06, 10/11/06 PRs 276,171,452 341,603,797 3,871,303 2,400,208 2.4 Sajavi - Duki Road 1 M/s Rakhshani Builders ICB-9 10/12/07 PRs 937,778,983 1,073,130,983 12,161,503 7,229,481 Sub-total 3,967,306,692 4,792,169,477 54,308,358 30,044,287 3 Rural Access Roads 3.1 Dera Allah Yar - Hair Din Road 2 M/s Behram & M/s Haji Ranjhan Khan LCB-3&4 02/05/06&13/03/06 PRs 526,104,343 813,261,343 9,216,470 3,657,305 3.2 Dera Allah Yar - Usta Mohammed Road 3 M/s Mehmood, M/s Hameed & M/s M.Shahi LCB-19-21 10/10/06, 23/03/07, 23/03/07 PRs 606,330,146 1,028,850,146 11,659,680 2,868,560 3.3 Khurkhera - Kanraj Road 1 M/s Agha Construction Co. LCB-2 02/05/06 PRs 187,277,562 438,776,246 4,972,532 3,082,970 3.4 Chad Sher Ali - Chad Gambola Road 3 M/s M.Shahi, M/s Hameed & Shah Builders LCB-16-18 29/07/06, 29/07/06, 29/07/06 PRs 284,353,822 368,013,175 4,170,594 2,585,768 3.5 Gandawah - Kotra - Pir Chatta Road 1 M/s Mohammed Shahi Builders LCB-8 28/08/07 PRs 288,826,095 218,682,346 2,478,268 1,536,526 Sub-total 1,892,891,968 2,867,583,256 32,497,544 13,731,129 4 Equipments 4.1 Provincial Institutional Development 16 01/02/06－10/03/08 PRs 36,872,067 36,872,067 578,541 578,541 5 Consulting Services 5.1 Provincial Institutational Development 1 M/s SMEC (Pty) Ltd. Australia QCBS 17/03/05 PRs 49,949,138 48,436,849 AUD 996,082 954,503 USD 129,412 128,012 1,669,917 1,669,917 5.2 Provincial Roads - Design and Construction 2c M/s SMEC (Pty) Ltd. Australia QCBS 14/06/05 PKR 274,409,711 233,631,545 Supervision AUD 2,191,717 1,254,929 USD 258,823 118,649 4,416,359 4,416,359 M/s Associated Consultancy Centre (Pty) Ltd. QCBS 01/03/11 PRs 39,941,190 39,941,190 452,643 Islamabad 5.3 National Highways - Construction Supervision 1 SMEC International Pty Ltd. and Associates QCBS 04/01/06 PKR 69,816 123,263,286 AUD 1,197,616 1,081,856 USD 926,939 184,774 2,705,758 2,705,758 Total 199,910,573 105,872,905 Notes: a The total cost is the actual cost for completed components and the latest estimation for incomplete components. b Converted using the exchange rate at project completion reviews. c At ADB loan closing, the original consultant left and a local consultant took over with a new contract. ICB= international competitive bidding, LCB = local competitive bidding, QCBS = quality- and cost-based selection. Source: ADB project completion review mission.
Appendix 11 39
ECONOMIC REEVALUATION A. General
1. The Asian Development Bank (ADB) project completion review mission conducted an economic reevaluation of the project using similar methodology as that at appraisal and updated data. In the ―without project‖ case, it was assumed that the original state of the road would be retained. In the ―with project‖ case, the roads were reconstructed so that vehicles could drive at faster speeds with lower operating costs and less travel time. A traffic analysis compared the latest traffic counts on some sample roads with those at appraisal. The traffic forecast for future years was revised accordingly. Economic benefits were calculated by comparing the ―with project‖ and ―without project‖ cases. Consequently, the economic internal rate of return (EIRR) was calculated for the whole project as well as for the national and provincial highways, separately.
B. Traffic Analysis
2. During the ADB project completion review mission, the latest traffic counts for some sample roads were collected. In comparing the 2011 traffic with that at appraisal (2003), the traffic increased by an average of 3.2% per annum for national highways and 6.1% for provincial highways. The traffic on the Quetta–Kalat section of the national highway increased by 5.3% per annum, but traffic on the border section of Quetta–Chamman increased by only 1.2% per annum. The truck traffic on the national highways increased sharply, on average by about 24.3% per annum. On the provincial highways, the traffic on the Zhob–Mir Ali Khail– Khajuri Kuch section, a core road connecting Balochistan with other provinces, increased sharply. The bus traffic increased markedly on provincial highways, on average by about 10.2% per annum. The traffic increase rates are generally at the same levels as those estimated at appraisal.1 Taking into account the socioeconomic development in the project area, the traffic should increase more after completion of the project. Future traffic rates were adjusted using the latest traffic counts and the adjusted future traffic increase rates.
Table A11.1. Existing Traffic Counts on Some Sample Roads (number of vehicles, AADTa) Motor- Car wagons Trucks Trucks Trucks Year cycles Jeep pickup Buses 2 Axles 3 Axles >3 Axles Total Existing traffic in RRP (2003) 1. National highways Quetta - Kalat 266 507 1,448 179 412 92 27 2,931 Quetta - Chamman 97 1,845 908 174 573 191 31 3,819 2. Provincial highways and rural Road Zhob—Mir Ali Khail—Khajuri Kuch 1 10 16 1 12 1 0 41 Kach—shahrag—Hamai 15 25 25 8 265 15 1 354 Khurkhera—Kanraj 10 7 19 3 26 1 0 66 Dera Akllahyar—Hairdin 228 201 290 31 197 16 2 965 Existing traffic during PCR (2011) 1. National highways Quetta—Kalat 42 711 1642 187 863 834 166 4,445 Quetta—Chamman 38 1480 1110 118 559 783 129 4,217 2. Provincial highways and rural Road Zhob—Mir Ali Khail—Khajuri Kuch 8 56 154 25 33 4 0 279 Kach—shahrag—Hamai 29 48 48 15 509 31 2 682 Khurkhera—Kanraj 18 12 34 5 65 1 0 135 Dera Akllahyar—Hairdin 404 356 308 49 66 8 3 1,194 a AADT = annual average daily traffic. Source: ADB project completion review mission.
1 Four to seven percent per year by different vehicle types.
40 Appendix 11
Table A11.2. Adjusted Future Traffic increase Rates (%) Motor- Car Wagons Trucks Trucks Trucks cycles Jeep pickup Buses 2 Axles 3 Axles >3 Axles Total Average traffic increase rate in 2002-2011 (% per year) National highway (17.2) (0.9) 2.0 (1.8) 4.7 24.3 22.5 3.2 Provincial highway 7.7 8.7 5.7 10.2 3.8 3.7 6.6 6.1 Adjusted future traffic increase rates (% per year) National highway 7.5 5.0 4.0 4.0 5.0 5.0 5.0 4.7 Provincial highway 8.0 6.0 5.5 6.0 7.0 6.5 6.0 6.7 Source: ADB project completion review mission.
C. Costs and Benefits
3. The project costs comprised capital and maintenance costs. The actual capital costs for the project were much higher than those at appraisal. The unit costs per kilometer (km) were about 76% higher for national highways and 180% higher for provincial highways, due to sharp increases in prices of construction materials and implementation delays. Actual annual investment costs for the project were used in the economic reevaluation. The standard national norm for road maintenance cost was used in the analysis. The financial costs for capital and maintenance were converted into economic costs with a standard conversion factor of 0.95 in the project area. All economic costs were estimated in 2011 prices.
4. Using a methodology similar to that at appraisal, the main sources of economic benefits were (i) savings in vehicle operation cost (VOC), (ii) savings in travel time costs, and (iii) other non-quantified benefits. The benefit calculation only considered normal and diverted traffic. Induced traffic was excluded from the benefit calculation. The VOC savings were recalculated using unit VOC data by different road roughness. The VOC savings in PRs per vehicle-kilometer were estimated at 2.74 for cars, 7.38 for wagons, 10.82 for buses, 5.81 for small trucks, and 5.14 for large trucks. Average passenger vehicle speeds were assumed at 40–60 km per hour for the ―with project‖ case and 20–30 km per hour for the ―without project‖ case. The passengers’ travel time cost savings were recalculated by different types of passenger vehicles. The passenger time cost was derived from the gross domestic product per capita of the country in 2010 and was estimated to increase by 3–5% each year to reflect income increases in the near future. Other factors taken into account in the calculation for passenger time cost savings include average vehicle loads, percentage of work-related trips, time costs for different road users, and travel speeds for different types of passenger vehicles. Due to data unavailability, 10% was added to the VOC and time cost savings to reflect other benefits such as socioeconomic development in the project area, poverty reduction, lower accident costs, and maintenance cost savings. The benefit calculation results show that VOC savings were 67–77% of the total benefits, but passenger time cost benefits increased rapidly along with socioeconomic development and income increases, reached 24% of the total benefits in 2030.
D. Economic Reevaluation and Sensitivity Test
5. Based on the above estimations on economic costs and benefits, the economic internal rate of return (EIRR) was recalculated at 17.8% for the project (22.6% for national
Appendix 11 41 highways and 13.2% for provincial highways), lower than that estimated at appraisal. 2 The lower EIRRs were mainly due to higher unit construction costs. However, all of the recalculated EIRRs are above a discount rate of 12%. The project is thus considered economically viable. The detailed EIRR reevaluations for the project and for each road section are in Tables A11.4–A11.6.
6. The EIRRs were subjected to sensitivity analysis to test different scenarios of costs and benefits. The sensitivity analysis results show that the project continued to be economically viable for most scenarios, especially to the national highway component. If a 20% maintenance cost increase were to be combined with a 20% benefit reduction, the EIRRs would be 15.0% for the whole project. The sensitivity test also shows that the EIRR is more sensitive to changes in benefits. Therefore, the government needs to pay attention to socioeconomic development in the project area, promote cross-border transport, foster transport services, and increase incomes for the rural users. The results of the sensitivity tests are in Table A11.3.
Table A11.3. Sensitivity Test (PRs million) Scenarios EIRR (%) ENPV Base Case 17.8 12,149 Sensitivity Tests 1 Maintenance Cost 10% Higher 17.5 9,942.0 2 Maintenance Cost 20% Higher 16.3 7,734.6 3 Benefits 10% Lower 17.4 8,727.1 4 Benefits 20% Lower 15.8 5,304.7 5 Benefits 10% Higher 20.2 15,571.7 6 Benefits 20% Higher 21.5 18,994.0 7 Maint. Cost 10% Higher & Benefits 10% Lower 16.1 6,519.7 8 Maint. Cost 20% Higher & Benefits 20% Lower 15.0 5,312.3 EIRR = economic internal rate of return, ENPV = economic net present value. Source: ADB project completion review mission.
2 At appraisal, the EIRRs for the two national highways were 33.7% and 40.4%, respectively. For the six core provincial roads, the EIRRs were 14.8–48.9%.
A11.4: Economic Reevaluation for Whole Project 42 (PRs million) Costs Benefits Net Appendix 1 ENPV Capital Maintenance Total VOC Time Cost Others Total Benefit 2005 801.1 - 801.1 -801.1 -1,411.8
2006 2,523.3 - 2,523.3 -2,523.3 -3,970.4 1
2007 3,844.9 - 3,844.9 -3,844.9 -5,401.8 2008 1,722.2 - 1,722.2 -1,722.2 -2,160.3 2009 2,182.7 - 2,182.7 -2,182.7 -2,444.6 2010 1,782.2 - 1,782.2 -1,782.2 -1,782.2 2011 1,782.2 68.1 1,850.2 2,419.7 429.2 284.9 3,133.8 1,283.6 1,146.1 2012 1,782.2 128.0 1,910.2 2,539.0 472.0 301.1 3,312.2 1,402.0 1,117.6 2013 801.1 146.9 948.0 2,664.5 519.1 318.4 3,502.0 2,554.0 1,817.9 2014 - 173.9 173.9 3,140.1 645.6 378.6 4,164.2 3,990.4 2,536.0 2015 - 179.1 179.1 3,300.3 711.0 401.1 4,412.5 4,233.4 2,402.2 2016 - 184.4 184.4 3,469.0 783.2 425.2 4,677.4 4,493.0 2,276.3 2017 4,292.6 190.0 4,482.6 3,646.7 862.7 450.9 4,960.4 477.8 216.1 2018 - 195.7 195.7 3,833.9 950.4 478.4 5,262.7 5,067.0 2,046.5 2019 - 201.5 201.5 4,031.0 1,047.2 507.8 5,585.9 5,384.4 1,941.7 2020 - 207.6 207.6 4,238.6 1,153.8 539.2 5,931.7 5,724.1 1,843.0 2021 - 213.8 213.8 4,457.4 1,221.1 567.9 6,246.4 6,032.5 1,734.2 2022 - 220.2 220.2 4,688.0 1,319.7 600.8 6,608.5 6,388.3 1,639.7 2023 - 226.8 226.8 4,930.9 1,426.5 635.7 6,993.2 6,766.3 1,550.7 2024 4,292.6 233.7 4,526.3 5,187.0 1,542.0 672.9 7,401.9 2,875.6 588.4 2025 - 240.7 240.7 5,456.9 1,667.1 712.4 7,836.3 7,595.7 1,387.7 2026 - 247.9 247.9 5,741.4 1,802.4 754.4 8,298.2 8,050.3 1,313.2 2027 - 255.3 255.3 6,041.3 1,948.9 799.0 8,789.2 8,533.9 1,242.9 2028 - 263.0 263.0 6,357.6 2,107.4 846.5 9,311.6 9,048.6 1,176.7 2029 - 270.9 270.9 6,691.1 2,279.1 897.0 9,867.2 9,596.4 1,114.2 2030 -12,502.9 279.0 -12,223.9 7,042.8 2,465.0 950.8 10,458.6 22,682.5 2,351.4
Economic Net Present Value (ENPV): 12,149.4 Economic Internal Rate of Return (EIRR): 17.8% Discount Rate: 12% Source: ADB project completion review mission.
A11.5: Economic Reevaluation for the National Highway Component (PRs million) Costs Benefits Net ENPV Capital Maintenance Total VOC Time Cost Others Total Benefit 2005 - - - 2006 921.1 921.1 -921.1 -1,449.3 2007 1,842.1 1,842.1 -1,842.1 -2,588.1 2008 921.1 921.1 -921.1 -1,155.4 2009 1,381.6 1,381.6 -1,381.6 -1,547.4 2010 1,381.6 1,381.6 -1,381.6 -1,381.6 2011 1,381.6 43.8 1,425.4 1,846.7 320.9 216.8 2,384.4 959.0 856.2 2012 1,381.6 87.6 1,469.2 1,930.2 351.5 228.2 2,509.9 1,040.7 829.7 2013 90.2 90.2 2,017.5 385.0 240.3 2,642.8 2,552.6 1,816.9 2014 92.9 92.9 2,108.8 421.8 253.1 2,783.6 2,690.8 1,710.0 2015 95.7 95.7 2,204.3 462.1 266.6 2,933.0 2,837.3 1,610.0 2016 98.5 98.5 2,304.1 506.2 281.0 3,091.4 2,992.8 1,516.3 2017 3,133.4 101.5 3,234.9 2,408.6 554.5 296.3 3,259.4 24.5 11.1 2018 104.5 104.5 2,517.8 607.5 312.5 3,437.9 3,333.3 1,346.3 2019 107.7 107.7 2,632.1 665.6 329.8 3,627.4 3,519.7 1,269.3 2020 110.9 110.9 2,751.6 729.2 348.1 3,828.9 3,718.0 1,197.1 2021 114.2 114.2 2,876.6 783.7 366.0 4,026.3 3,912.1 1,124.6 2022 117.7 117.7 3,007.3 842.4 385.0 4,234.6 4,117.0 1,056.7 2023 121.2 121.2 3,144.1 905.4 404.9 4,454.4 4,333.2 993.1 2024 3,133.4 124.8 3,258.3 3,287.1 973.1 426.0 4,686.3 1,428.0 292.2 2025 128.6 128.6 3,436.8 1,046.0 448.3 4,931.1 4,802.5 877.4 2026 132.4 132.4 3,593.4 1,124.3 471.8 5,189.4 5,057.0 824.9 2027 136.4 136.4 3,757.1 1,208.5 496.6 5,462.3 5,325.9 775.7 2028 140.5 140.5 3,928.5 1,299.1 522.8 5,750.4 5,609.9 729.5
2029 144.7 144.7 4,107.8 1,396.5 550.4 6,054.7 5,910.0 686.2 1 Appendix 2030 -7,738.8 149.1 -7,589.7 4,295.3 1,501.2 579.7 6,376.2 13,965.9 1,447.8
Economic Net Present Value (ENPV): 10,657.7
1 Economic Internal Rate of Return (EIRR): 22.6% Discount Rate: 12% 43 Source: ADB project completion review mission.
A11.6: Economic Reevaluation for the Provincial Highway Component 44 (PRs million) Costs Benefits Net Appendix 1 ENPV Capital Maintenance Total VOC Time Cost Others Total Benefit 2005 801.1 801.1 -801.1 -1,411.8
2006 1,602.2 1,602.2 -1,602.2 -2,521.1 1 2007 2,002.7 2,002.7 -2,002.7 -2,813.7 2008 801.1 801.1 -801.1 -1,004.9 2009 801.1 801.1 -801.1 -897.2 2010 400.5 400.5 -400.5 -400.5 2011 400.5 24.3 424.8 573.0 108.3 68.1 749.4 324.6 289.8 2012 400.5 40.5 441.0 608.8 120.5 72.9 802.3 361.3 288.0 2013 801.1 56.7 857.8 647.0 134.1 78.1 859.2 1.4 1.0 2014 81.0 81.0 1,031.3 223.8 125.5 1,380.6 1,299.6 825.9 2015 83.4 83.4 1,096.1 249.0 134.5 1,479.5 1,396.1 792.2 2016 85.9 85.9 1,164.9 277.0 144.2 1,586.1 1,500.2 760.0 2017 1,159.2 88.5 1,247.7 1,238.1 308.2 154.6 1,701.0 453.3 205.0 2018 91.1 91.1 1,316.0 342.9 165.9 1,824.9 1,733.7 700.2 2019 93.9 93.9 1,398.9 381.6 178.0 1,958.5 1,864.7 672.4 2020 96.7 96.7 1,487.1 424.6 191.2 2,102.8 2,006.2 645.9 2021 99.6 99.6 1,580.9 437.3 201.8 2,220.0 2,120.4 609.6 2022 102.6 102.6 1,680.7 477.4 215.8 2,373.9 2,271.3 583.0 2023 105.7 105.7 1,786.9 521.1 230.8 2,538.8 2,433.1 557.6 2024 1,159.2 108.8 1,268.0 1,899.8 568.9 246.9 2,715.6 1,447.6 296.2 2025 112.1 112.1 2,020.1 621.1 264.1 2,905.3 2,793.2 510.3 2026 115.4 115.4 2,148.0 678.1 282.6 3,108.7 2,993.3 488.3 2027 118.9 118.9 2,284.2 740.3 302.5 3,327.0 3,208.1 467.2 2028 122.5 122.5 2,429.1 808.3 323.7 3,561.2 3,438.7 447.2 2029 126.2 126.2 2,583.3 882.6 346.6 3,812.6 3,686.4 428.0 2030 -4,764.1 129.9 -4,634.2 2,747.5 963.8 371.1 4,082.4 8,716.6 903.6
Economic Net Present Value (ENPV): 79.9 Economic Internal Rate of Return (EIRR): 13.2% Discount Rate: 12% Source: ADB project completion review mission.
Appendix 12 45
SUMMARY OF THE TECHNICAL ASSISTANCE LOAN (LOAN 2020)
A. Introduction
1. Under the Balochistan Road Development Sector Project, financed by the Asian Development Bank (ADB) a technical assistance (TA) loan was approved to support devolution and help the Balochistan Provincial Government (BPG) and the district administration enhance the project benefits to the poor.1 The TA loan was implemented by (i) community infrastructure and empowerment, (ii) social protection and education, and (iii) consulting services. The selected consultants mobilized on 21 March 2007 and the TA was closed on 30 October 2009. 2 A final TA report was prepared in October 2009. 3 Two local nongovernment organizations (NGOs) administered a block grant.4 The project management unit (the PMU) selected five pilot districts in Balochistan for the block grant implementation.
B. Component A - Community Infrastructure
2. In May 2007, a community consultation was held in the districts to introduce the project and generate inputs for priority projects. A survey was then conducted to identify poverty status and needs for infrastructure improvement. The survey collected the basic information from the communities located near the project roads, including the extent and reason for poverty, priority needs, and priority projects. The survey indicated that the communities’ highest priority was provision of clean drinking water to protect the community from waterborne diseases and provide access to basic health and education facilities. Therefore, the development of water tanks and pit latrines was made the highest priority. The contracted NGOs constructed 10 water tanks and 38 pit latrines in ten villages in the five districts. These infrastructures should benefit at least 1,119 households or a minimum population of 9,156. The NGOs also established 10 community-based organizations at these sites to ensure project sustainability.
C. Component B - Social Protection and Education
3. Bearing in mind the low level of awareness of the villagers along the road sections, the NGOs focused on educating the communities, especially the women, about basic health and hygiene practices, safe water usage, mother and child care, first aid, HIV and AIDS, agriculture and livestock, and road safety. The NGOs prepared their training plans with specific implementation dates, and submitted them to the PMU for approval. The training sessions were mostly held earlier in the day and the participants were mainly women and children. The NGOs established good community relations in order to be successful and have more gender-oriented activities. Community-based training sessions were conducted on formation and capacity building of road contracting groups, and social awareness seminars were held on health, education, and road safety. In the five districts, a total of 50 awareness raising sessions were attended by 1,149 of the targeted 1,130 participants, a 102% participation success rate. The NGOs conducted 25 training sessions on road maintenance that were attended by 562 of the targeted 600 participants, a 93% participation success rate.
1 Loan 2020-PAK, Community Development and Poverty Reduction, approved on 20 November 2003, SDR701,000 ($1.00 equivalent) from the Asian Development Fund. 2 Asian Institute of Development Studies, Inc., Philippines. 3 Final Report, Community Development and Poverty Reduction Project. Loan 2020-PAK, October 2009. 4 The Balochistan Foundation for Development (BFD); The Legends Society (TLS).
46 Appendix 12
D. Component C - Consulting Services and Capacity Building
4. The national and international consultants conducted training sessions for CWD officers on block grant management monitoring and for NGOs on road maintenance. Other capacity- building programs were implemented, including (i) a comparative study visit on community- managed development initiatives (UK); (ii) a training program on block grant management and implementation (Quetta, Pakistan); (iv) a study tour on project implementation and management (Malaysia); (v) a training session on social impact analysis (Philippines); and (vi) a training program on entrepreneur development and micro-enterprise development (Islamabad, Pakistan). A total of 52 CWD officers and staff and 14 NGO representatives were trained in these programs. Finally, a socioeconomic survey of all sites was conducted to establish benchmarks for road projects. The survey focused on 271 selected households located in 10 villages along the roads of Zhob–Mir Ali Khail–Khajuri Kach and Katch–Sharag–Harnai. The survey collected random socioeconomic data. Main findings were recorded in the TA report. However, there were no follow-up surveys or evaluation activities and no comparison was reported on the changes before and after the project.
E. Conclusion and Recommendation
5. Overall, the short-term objectives of involving the beneficiaries and CWD in road benefits monitoring have been achieved, leaving the medium- and long-term goals of the social impact on poverty reduction. However, the full outcome or measurement of the social impacts will have to wait until two years after completion of the physical works, including the roads and the community infrastructure. At that time, a ―post-project‖ measurement will be done, comparing the state of benchmarks against the baseline socioeconomic survey conducted at the corresponding project sites (the villages selected) before and during project implementation.