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The World Bank Document of The World Bank FOR OFFICIAL USE ONLY Public Disclosure Authorized Report No. 3987 PROJECT PERFORMANCE AUDIT REPORT Public Disclosure Authorized TOGO SECOND HIGHWAY PROJECT CREDIT 450-TO) Public Disclosure Authorized June 30, 1982 Public Disclosure Authorized Operations Evaluation Department This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization. FOR OFFICIAL USE ONLY PROJECT PERFORMANCE AUDIT REPORT TOGO SECOND HIGHWAY PROJECT (CREDIT 450-TO) TABLE OF CONTENTS Page No. Preface................................................ ......... i Basic Data Sheet................................................... ii Highlights......................................................... iv PROJECT PERFORMANCE AUDIT MEMORANDUM I. BACKGROUND - ...................-................. 1 II. PROJECT RESULTS ...................... 2 III. ISSUES ............... ................... ............ 8 IV. CONCLUSIONS ............................................ 13 Annexes A. Comparison of Appraisal Cost Estimates and Actual Cost............................................. 14 B. Alternative Main Routes of Access for Upper Volta, Niger and Mali.......................................... 15 C. Togo and Benin - Vehicle Operating Costs Excluding Taxes - 1972.................... ....... 16 D. Togo and Benin - Vehicle Operating Costs Excluding Taxes - 1976................................. ......... 17 E. Togo and Benin - Vehicle Operating Costs Excluding Taxes - 1980............................................ 18 F. Borrower Comments.................................. 19 PROJECT COMPLETION REPORT I. Introduction.................................................. 21 II. Project Preparation and Appraisal............................ 21 III. Project Implementation......................................... 25 IV. Institutional Development...................................... 29 V. Economic Reevaluation.......................................... 30 VI. Performance of the Borrower................................ 32 VII. The Role of the Association................................ 33 VIII. Conclusions................................................... 33 This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization. -2- Table of Contents (cont'd.) Page No. Tables 1. Expected and Actual Project Implementation and Costs....... 34 2. Expected and Actual Schedule of Disbursements.............. 35 3. Withdrawal of the Proceeds of the Credit............... .. 36 4. Economic Reevaluation of Civil Works....................... 37 Chart: Togo-Organization of the Public Works Department........... 38 Map - 1 - PROJECT PERFORMANCE AUDIT REPORT TOGO SECOND HIGHWAY PROJECT (CREDIT 450-TO) PREFACE This report presents a performance audit of the Togo Second Highway Project, for which the Executive Directors approved Credit 450-TO in the amount of US$8.7 million on November 27, 1973. The credit was closed, fully disbursed, in December 1980. The report consists of a Project Performance Audit Memorandum (PPAM) prepared by the Operations Evaluation Department (OED) and a Project Completion Report (PCR) prepared by IDA's Western Africa Re- gional Office. The Borrower provided material for the PCR to a mission undertaken by the Region in April 1979. The bases for the PPAM comprised: the PCR, discussions with IDA staff, the transcripts of the Executive Directors' meetings at which the project was considered, and the project files and documents. OED staff did not visit the country. The audit agrees with the PCR on many aspects. However, it points out the shortcomings in the methodology used for the economic analysis of the two roads actually completed, the appraisal underestimation of traffic devel- opment on one of the roads, the variations in estimates of vehicle operating cost savings, and the failure to achieve the "in-house" training objectives of the project. The draft report was sent to the Borrower for their comments in the normal course; their comments are attached as Annex F to the Project Perfor- mance Audit Memorandum and have been reflected therein. - ii - PROJECT PERFORMANCE AUDIT BASIC DATA SHEET TOGO SECOND HIGHWAY PROJECT (CREDIT 450-TO) KEY PROJECT DATA Appraisal Actual or Item Estimate Reestimate Total Project Cost (US$ million) 12.5 12.9/a Overrun () - 3 Credit Amount (US$ million) 8.70 8.70 Disbursed and Outstanding: - 8.70 for Second Highway Project 8.36 for Third and Fourth Highway Projects/b - 0.34 Project Completion Date 12/31/76 06/30/79 Proportion of Time Overrun (%)- 150 Proportion of Main Project Elements Finished by Original Project Completion Date (%) - 80 Economic Rate of Return (%)--Weighted Average 18 23 Blitta-Sokode Road 19.5 25 Sokode-Tchamba Road 13 15 Cumulative Estimated and Actual Disbursements (US$ million) FY74 FY75 FY76 FY77 FY78 FY79 FY80 FY81 Estimated 0.30 4.50 7.00 8.70 8.70 8.70 8.70 8.70 Actual 0 0.60 4.00 7.70 8.20 8.30 8.50 8.70 Actual/Estimated (%) 0 14 57 89 95 96 98 100 /a The project was scaled down. The Credit Agreement was amended in March 1976 to reflect: (a) the deletion of construction of the Agou-Notse (formerly Nuatja) Road from the project, and (b) the transfer of the financing of part of the costs of improvement of the Tchamba-Kambole Road by force account to the Government's Budget. /b A small amount remaining under the Second Highway Project was applied to expenditures incurred under the Third and Fourth Highway Projects. -iii - OTHER PROJECT DATA Item Original Plan Actual First Mention in Files - 04/71 Negotiations Date 03/15/73 10/15-19/73 Board Approval Date 10/09/73 11/27/73 Credit Agreement Date 12/73 12/28/73 Effectiveness Date 04/29/74 04/19/74 Closing Date 06/30/77 12/30/80fl/a Borrower Republic of Togo Executing Agency Ministry of Transport, Public Works, Mines and TelecommunicationsL-b Fiscal Year of Borrower 01/01-12/31 Follow-on Project Name Third Highway Project Credit Number 693-TO Amount (US$ million) 10.0 Credit Agreement Date 04/01/77 MISSION DATA Month/ No. of No. of Staff Date of Item Year Weeks Persons weeks Report Preappraisal 09/72 0.7 2 1.4 10/72 Appraisal 11-12/72 2.0 2 4.0 11/73 Supervision I 03/74 0.7 2 1.4 05/74 Supervision II 05/75 0.9 1 0.9 06/75 Supervision III 10/75 1.4 1 1.4 10/75 Supervision IV 10/76 1.6 1 1.6 12/76 Supervision V 05/77 1.4 1 1.4 06/77 Supervision VI 12/77 1.4 2 2.8 01/78 Supervision VII 05/78 1.1 1 1.1 06/78 Supervision VIII 11/78 1.0 1 1.0 01/79 Supervision XI 03/79 1.1 2 2.2 04/79 COUNTRY EXCHANGE RATES Name of Currency (Abbreviation) CFA franc (CFAF) Year: 1973 (November) Exchange Rate: US$1 = 210 1974 ) US$1 = 241 1975 ) US$1 = 214 1976 ) US$l = 239 1977 ) (Average) US$1 = 246 1978 ) US$1 = 226 1979 ) US$1 = 213 1980 ) US$1 = 211 /a Final disbursement made on 11/03/80. /b Now known as the Ministry of Equipment, Posts and Communications. - iv - PROJECT PERFORMANCE AUDIT REPORT TOGO SECOND HIGHWAY PROJECT (CREDIT 450-TO) HIGHLIGHTS Credit 450-TO for US$8.7 million supported reconstruction and maintenance programs to reduce vehicle operating costs on roads in Togo. The project primarily addressed the rehabilitation of a section of the main south-north highway (78 km) and the construction or improvement of two associ- ated secondary roads (126 km) so as to facilitate the transport of agricul- tural products, thereby stimulating agricultural production. However, when bids indicated that costs of the civil works would be 30% higher than esti- mated at appraisal because of worldwide inflation after 1973, construction of one of the secondary roads was deleted from the project and part of the improvement of one of the two sections of the other secondary road was trans- ferred to the Government's Budget. The design standards of the road to be rehabilitated were improved during implementation, and the resulting cost increases were borne by the Government. The project objectives as regards civil works generally were achiev- ed. However, less success materialized in regard to institution build- ing and "in-house" training. Although some organizational improvements did take place, technical assistance in road maintenance, continued from the First Highway Project, yielded only very limited results. "In-house" training related to road maintenance and to transport planning and coordination also produced less than expected. The project had a 150% time overrun because of the late start and improvements in design of the civil works, the delay in appointment of an expert for technical assistance in transport planning and coordination, and the delay in installation of equipment in the soils laboratory. However, the bulk of the project (equal to 96% of costs) was finished within six months of the original Closing Date. The actual cost of the smaller project (US$12.9 million) is 3% above the appraisal estimate for the entire project (US$12.5 million). However, it is noted that the actual cost is understated because some of the costs of the improvement work transferred to the Government's Budget has not been taken into account (para. 18). The weighted average economic rate of return is 23% on reevaluation, in contrast to the appraisal estimate of 18%. The following points are of particular interest: - the methodology of economic analysis in the appraisal did not lead to the selection of the best solution
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