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World Bank Document RURAL ACCESS IMPROVEMENT AND DECENTRALISATION PROJECT (IDA Grant H171-NEP, H525-NP and IDA Credit 4664-NP) Implementation Review September 9-18, 2013 AIDE MEMOIRE Public Disclosure Authorized I. Introduction and Acknowledgments 1. A World Bank team1 (Annex 1a provides a team members’ list) carried out an implementation review of the Rural Access Improvement and Decentralization Project (RAIDP) during September 9- 18, 2013. The review had three objectives: (i) to review the progress in achieving the project’s intended results; (ii) to identify the key implementation issues and actions that are necessary for satisfactory project implementation; (iii) to kick-start the process of orderly project completion including the initiation of an Implementation Completion and Results (ICR) report. The Team has visited a number of RAIDP roadwork sites to briefly assess the roadwork quality and contracts’ implementation status. This review is particularly significant as it is potentially the penultimate review that the Bank will carry out for RAIDP. 2. The Team would like to thank the Government of Nepal (GON) for the hospitality extended to Public Disclosure Authorized it, especially by counterpart agencies and officials (Annex 1b provide the list of persons met). This Aide Memoire summarizes the main review findings, meeting decisions, agreements reached, and recommendations made. It also reflects discussions that took place at a wrap-up meeting held on September 20, 2013 at the Ministry of Federal Affairs and Local Development (MoFALD). As per the World Bank’s Access to Information Policy and the wrap up meeting decision, this Aide Memoire will be classified as a public document. II. Key Project Data Project Data Project Performance Ratings Board Approval (original): 21-Jun-2005 Summary Ratings Last Now Additional Financing 17-Dec-2009 Effectiveness Date (original): 16-Aug-2005 Achievement of PDO MS MS ◄► Additional Financing 14-Jul-2010 Original Closing Date: 31-Dec-2013 Implementation Progress MS MS ◄► Public Disclosure Authorized Revised Closing Date: Not applicable Project Management MS MS ◄► Mid-term Review Date: March 1-6, 2009 Procurement S S ◄► Original Credit/Grant Amount: $77.00m Financial Management MS MS ▲ Amount Disbursed: $54.10mm2 (71%) Social Safeguard MS S ▲ Environmental Safeguard MU MS ▲ M&E MS MS ◄► Counterpart Funding MS S ▲ Notes: S- Satisfactory; MS – Moderately Satisfactory; MU - Moderately unsatisfactory; U – unsatisfactory; ▲ Improving trends; ▼ Deteriorating trends; ◄► Static III. Achievement of Development Objectives Status 3. The progress towards achieving the Project Development Objectives (PDO) remains “moderately satisfactory.” Results of an impact study show that the project has surpassed targets in the original 20 project districts (see Annex 2). The PCU has also completed baseline data collection Public Disclosure Authorized activities in new districts taken up under the additional financing. The target date for study completion is mid-December, 2013. Based on initial findings and the Team’s estimates, RAIDP appears likely to achieve its objectives. 1 Hereinafter referred as “the Team” 2 As of September 4, 2013 1 IV. Current Implementation Status Rural Transport Infrastructure Component 4. The overall rating of this component has been judged as “moderately satisfactory”. 5. The project is on track to meet its target for all-season roads. RAIDP has upgraded 1,322km against a revised target of 1,350km. Funds for the increased length will be covered from prior savings under previous contracts. The Bank is restructuring the project to accommodate these changes. 6. The project’s revised target of 140 km of dry-season roads looks achievable. So far the project completed approximately 131km (92%) of this target. Annex 3 provides details on the dry-season roads’ progress. 7. Trail bridge fabrication is on track to achieve RAIDP targets. RAIDP’s target for trail bridges includes supporting full completion of 164 bridges plus fabricating steel parts for a further full completion 486 bridges. The PCU reports that outstanding fabrication activities for the final 100 bridges of this target will reach completion before December 31 2013. DoLIDAR is handling bridge installation under the Trail Bridge Sector-wide Approach (TB-SWAp). Current plans show these bridges will be installed by July, 2014. The Team requests the PCU to monitor the progress of these bridges and report the progress in monthly reports. 8. Action is needed to fully achieve targets for Community Infrastructure schemes. RAIDP has completed 505 of a targeted 583 community infrastructure schemes. Roughly 22 of the remaining 43 schemes are showing no progress. The PCU and DTOs in these districts need to take immediate action to ensure that work completes by December 31, 2013. 9. Several remaining river-crossing structures may not reach completion before project close. RAIDP is supporting 17 river crossing structures. Of these, six contracts are 75% complete, nine contacts are between 50% and 75% complete, one contract is less than 50% complete, and one contract is only 10% complete. The Team has concerns about whether all river crossing structures will reach completion before December 31, 2013. Annex 3 provides progress details for river crossing works. The Ministry of Finance (MoF) and MoFALD may wish to make alternative budget arrangements to compete bridges once RAIDP funding is no longer possible. 10. RAIDP may encounter a budget shortfall in the region of NPR 550m during this fiscal year. This is primarily due to the impact of expenditures carrying over from the previous fiscal year due to Nepal’s budget impasse. The Team would like to request close collaboration between MoF and MoFALD to ensure that project implementation does not stall for lack of funds. 11. Slow progress under 52 road upgrading projects is a cause for concern. The PCU and districts need to take immediate actions considering RAIDP’s impending closure. For the avoidance of doubt, the Team wishes to note that no IDA reimbursements will be possible for expenditures incurred after Dec. 31 2013. This deadline is firm and unchangeable. The Team strongly recommends for the PCU and districts to organize one-to-one meeting with the contractors in order to proactively manage their performance as this deadline approaches. 12. Progress in strengthening laboratories has been encouraging. 30 districts have set up material testing laboratories with RAIDP’s help. These laboratories are capable of performing roadwork related basic material tests. The project has now started the procurement process for additional testing equipment required for more sophisticated testing related to concrete strength. The Team is pleased to note that this will greatly help districts to during RADIP’s follow on project which includes a greater focus on structures work. 13. A field visits to five districts3 (between May and September, 2013) identified implementation issues that require the PCU’s intervention. These include: (i) slow progress or time overruns; (ii) late mobilization following the end of monsoons break; (iii) poor quality work; and (iv) inaction on the 3 Rasuwa, Nuwakot, Dhading, Rupandehi and Kapilvastu 2 part of districts where contractor performance is lagging. These issues need immediate attention to ensure that GON derives the full value from RAIDP investments. 14. Maintenance is on target with respect to RAIDP target quantities but the maintenance culture in districts is lagging. RAIDP reports that DDCs have, so far, maintained a total of 4,290km of rural roads against a target of 4,500km. This progress is satisfactory from the prospective of quantity. However, field observations suggest that many upgraded roads are not being maintained properly and have already begun to fail. RAIDP’s successor operation is actively aiming to address many of the core issues underlying this lagging performance. However, the Team is pleased to note that several length-person-based pilots for routine maintenance have delivered heartening results (with help from the International Labor Organization, or ILO). The roads under these pilot initiatives are now being well maintained. Capacity Building and Advisory Services Component (CBAS) 15. The overall rating of the CBAS component remains “moderately satisfactory” in line with the prior review. 16. Progress in preparing 20 District Transport Master Plans (DTMPs) has been very slow. Consultants engaged to complete these plans could not deliver within their contract period which ended in July, 2013. RAIDP has now set up a new deadline for completion of all DTMPs (end- November, 2013). The Team requested the PCU to monitor the DTMP consultants’ progress closely and to initiate corrective action if deadlines slip further. Failing to complete the outstanding DTMPs will negatively affect RAIDP’s successor project. 17. The progress to operationalize the Rural Transport Infrastructure Management System (RuTIMS) has been slow. A revised implementation plan was agreed with the consultants carrying out this task during the last review. However, the consultant could not achieve the revised targets. The Team notes that RuTIMS software is still not fully functional and requires further revisions. The Team has requested the PCU to review the consultants’ progress on a weekly basis and to initiate contractual remedies if necessary. 15. Sustainable funding for laboratories is essential but yet to materialize. RAIDP has trained laboratory staff and procured equipment. However, a solution
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