Document of The World Bank

Public Disclosure Authorized

Report No: ICR0000712

IMPLEMENTATION COMPLETION AND RESULTS REPORT (IDA-34320 IDA-3432A)

Public Disclosure Authorized SPECIFIC INVESTMENT LOAN

IN THE AMOUNT OF SDR 51.20 MILLION (US$ 66.50 MILLION EQUIVALENT)

TO THE

REPUBLIC OF HONDURAS

FOR THE

ROAD RECONSTRUCTION AND IMPROVEMENT PROJECT Public Disclosure Authorized

December 18, 2007

Sustainable Development Department Central America Country Management Unit Latin America and Caribbean Region

Public Disclosure Authorized CURRENCY EQUIVALENTS (Exchange Rate Effective September 30, 2000)

Currency Unit= Lempiras LC LC 1.00 = US$ 0.067 US$ 1.00 = LC 15.00 FISCAL YEAR [January 1 – December 31]

ABBREVIATIONS AND ACRONYMS

CABEI Central American Bank for Economic Integration CAS Country Assistance Strategy DGC General Roads Directorate (Dirección General de Carreteras) DGCCA General Road Maintenance Directorate (Dirección General de Conservación de Carreteras y Aeropuertos) ECLAC The Economic Commission for Latin America ERR Economic Rate of Return GDP Gross Domestic Product GNP Gross National Product GOH Government of Honduras HDM Highway Design and Maintenance Model IADB Inter-American Development Bank ICR Implementation Completion Report IDA International Development Association IRI International Roughness Indicator JICA Japanese International Cooperation Agency LAC Latin America and the Caribbean Region LACI Loan Administration Change Initiative MCA Millennium Challenge Account NPV Net Present Value PAD Project Appraisal Document PCU Project Coordination Unit PDO Project Development Objective PMRTN Master Plan for National Reconstruction and Transformation (Plan Maestro de la Reconstrucción y Transformación Nacional) PRRI Remedial Involuntary Resettlement Plan (Plan Remedial de Reasentamiento Involuntario) SEFIN Ministry of Finance (Secretaría de Finanzas) SOPTRAVI Ministry of Public Works, Transport and Housing (Secretaría de Obras Públicas, Transporte y Vivienda) TSRP Transport Sector Rehabilitation Project UGA Environmental Management Unit

(Unidad de Gestión Ambiental) UPEG Planning and Evaluation Unit (Unidad de Planificación y Evaluación de Gestión) USAID U.S. Agency for International Development

Vice President: Pamela Cox Country Director: Jane Armitage Sector Manager: Jose Luis Irigoyen Project Team Leader: Stephen Brushett ICR Team Leader: Stephen Brushett HONDURAS

Road Reconstruction and Improvement Project

CONTENTS

Data Sheet ...... i A. Basic Information...... i B. Key Dates...... i C. Ratings Summary...... i D. Sector and Theme Codes ...... i E. Bank Staff...... i F. Results Framework Analysis ...... i G. Ratings of Project Performance in ISRs ...... i H. Restructuring...... i I. Disbursement Graph...... i 1. Project Context, Development Objectives and Design...... 1 2. Key Factors Affecting Implementation and Outcomes ...... 6 3. Assessment of Outcomes ...... 11 4. Assessment of Risk to Development Outcome...... 18 5. Assessment of Bank and Borrower Performance ...... 19 7. Comments on Issues Raised by Borrower/Implementing Agencies/Partners...... 24 Annex 1. Project Costs and Financing...... 26 Annex 2. Outputs by Component...... 28 Annex 3. Economic and Financial Analysis...... 31 Annex 4. Bank Lending and Implementation Support/Supervision Processes...... 33 Annex 5. Beneficiary Survey Results ...... 36 Annex 5. Beneficiary Survey Results ...... 36 Annex 6. Stakeholder Workshop Report and Results...... 37 Annex 7. Summary of Borrower's ICR and/or Comments on Draft ICR ...... 38 Annex 8. Comments of Cofinanciers and Other Partners/Stakeholders...... 46 Annex 9. List of Supporting Documents ...... 47 MAP...... 48

A. Basic Information HN ROAD RECONSTRUCTION Country: Honduras Project Name: AND IMPROVEMENT Project ID: P057538 L/C/TF Number(s): IDA-34320,IDA-3432A ICR Date: 12/18/2007 ICR Type: Core ICR REPUBLIC OF Lending Instrument: SIL Borrower: HONDURAS Original Total XDR 51.2M Disbursed Amount: XDR 51.2M Commitment: Environmental Category: B Implementing Agencies: SOPTRAVI Fondo Vial Cofinanciers and Other External Partners:

B. Key Dates Revised / Actual Process Date Process Original Date Date(s) Concept Review: 09/07/1999 Effectiveness: 11/06/2001 11/06/2001 Appraisal: 04/10/2000 Restructuring(s): 01/29/2007 Approval: 11/07/2000 Mid-term Review: 08/20/2004 10/22/2004 Closing: 03/31/2006 09/30/2007

C. Ratings Summary C.1 Performance Rating by ICR Outcomes: Satisfactory Risk to Development Outcome: Moderate Bank Performance: Highly Satisfactory Borrower Performance: Satisfactory

C.2 Detailed Ratings of Bank and Borrower Performance (by ICR) Bank Ratings Borrower Ratings Quality at Entry: Highly Satisfactory Government: Satisfactory Implementing Quality of Supervision: Satisfactory Satisfactory Agency/Agencies: Overall Bank Overall Borrower Highly Satisfactory Satisfactory Performance: Performance:

i C.3 Quality at Entry and Implementation Performance Indicators Implementation QAG Assessments Indicators Rating Performance (if any) Potential Problem Project Quality at Entry No None at any time (Yes/No): (QEA): Problem Project at any Quality of No None time (Yes/No): Supervision (QSA): DO rating before Satisfactory Closing/Inactive status:

D. Sector and Theme Codes Original Actual Sector Code (as % of total Bank financing) Central government administration 10 10 Roads and highways 90 90

Theme Code (Primary/Secondary) Natural disaster management Primary Primary Rural services and infrastructure Primary Primary

E. Bank Staff Positions At ICR At Approval Vice President: Pamela Cox David de Ferranti Country Director: Makhtar Diop D-M Dowsett-Coirolo Sector Manager: Jose Luis Irigoyen Danny M. Leipziger Project Team Leader: Stephen J. Brushett Guillermo Ruan ICR Team Leader: Stephen J. Brushett ICR Primary Author: Oswaldo Patino

F. Results Framework Analysis

Project Development Objectives (from Project Appraisal Document) The objectives of the Project were: (a) to restore roads damaged by Hurricane Mitch, which struck Honduras in October 1998; (b) to improve trade corridors; and (c) to establish a sustainable and accountable financial and institutional set-up for the road sub- sector.

The performance indicators to measure the achievement of the project#s objectives were: (i) verification that traffic volumes and vehicle operating costs on the upgraded roads meet those projected in the feasibility studies; (ii) implementation of the road

ii maintenance pilot project through micro-enterprises; (iii) verification that the Road Fund is financing the maintenance of at least 70% of the national network by the end of the project (main, secondary and feeder roads); (iv) kilometers of main and rural roads and meters of bridges to be reconstructed / rehabilitated

Revised Project Development Objectives (as approved by original approving authority) There were no revisions to the project development objectives (PDO). The project was restructured January 29, 2007 without changes in the PDO. Project key indicators were not revised with the following exception: As part of the first amendment to the credit agreement countersigned December 2005, GOH agreed to the following changes to the Implementation Letter: (A) (i) funds were to be allocated to the Road Fund sufficient to meet at least respectively of 40% in 2001, 55% in 2002, 65% in 2003 and 70% in 2004 of the maintenance needs on the national network; (ii) maintenance on the main road network will be prioritized to ensure 100% of the requirements are met from 2006 onwards; (iii) further actions will be taken to assure 100% of national road network requirements are met by 2010. (B) (i) number of micro-enterprises providing routine maintenance eon the paved network will increase as follows 22 in 2001, 44 in 2002 and 64 in 2003. (ii) from 2005, a sufficient number of micro-enterprises will be contracted and financed to meet 100% of the needs on the paved road network.

(a) PDO Indicator(s)

Original Target Formally Actual Value Values (from Revised Achieved at Indicator Baseline Value approval Target Completion or documents) Values Target Years Indicator 1 : To restore road access damaged by Hurricane Mitch By the end of the project -- about 100 km of rural 103 km of rural roads and 550 m Value No or limited road access roads and 566 of of bridges will be quantitative or as a result of Hurricane bridge reconstructed Qualitative) Mitch improvements have and/or been completed rehabilitated, improving rural access Date achieved 10/16/2000 11/09/2000 06/29/2007 Comments (incl. % Objective achieved more than 100% achievement) Indicator 2 : To improve trade corridors About 262 km of Improvements of roads in good about 238 km Value Trade corridors in bad condition will be completed. Vehicle quantitative or condition added to the operating cost and Qualitative) network. Upon time saving are in completion, excess of original

iii vehicle operating estimates costs will be reduced by 35%, and travel time on average by 20% on those roads. Date achieved 10/16/2000 11/09/2000 06/29/2007 Comments (incl. % Completed to about 95% of the original target vlaues in kilometers achievement) To establish a sustainable and accountable financial and institutional setup for the Indicator 3 : road subsector The Road Fund Substantial. Road would be Fund met 65% of operational and national network maintaining not Value requirements by Weak financial and less than 8% of the quantitative or end of project, with institutional setup national network Qualitative) commitment to by close of project. meet 85% by 2010. Complete DGC restructuring restructurin of completed. DGC. Date achieved 10/13/2000 06/29/2007 06/29/2007 Road fund targets were modified 12/05 Rate of achievement in meeting Comments intermediate targets was as follows# 2001 # 34% 2002 # 42% 2003 # 55% (incl. % 2004 # 49%. And whereas 100% of main road maintenance was to be met from achievement) 2006, the rate of achievement was 95%.

(b) Intermediate Outcome Indicator(s)

Original Target Actual Value Formally Values (from Achieved at Indicator Baseline Value Revised approval Completion or Target Values documents) Target Years Civil Works: Indicator 1 : Kilometers of Road reconstructed, rehabilitated, and improved About 238 km have About 262 km of been reconstructed, Value road will be Roads in bad condition. rehabilitated or (quantitative reconstructed, IRI in range 5-7 improved. Av. IRI or Qualitative) rehabilitated, and ex post in generally improved under 2 Date achieved 10/16/2001 06/29/2007 06/29/2007 Comments About 34 km of Tegucigalpa-Dali improvement could not be completed due to (incl. % implementation delays and insufficient funds. Financing for the section still to achievement) be completed is to be mobilized though the Government of Spain and CABEI Indicator 2 : Rural roads rehabilitated Value Rural Roads in bad About 100 km of 103 km. of rural

(quantitative condition rural roads will be roads rehabilitated

iv or Qualitative) rehabilitated Date achieved 10/13/2000 06/29/2007 06/29/2007 Comments (incl. % 103% rate of achievement achievement) Indicator 3 : Bridge reconstructed and rehabilitated About 550 m of 566 meters of Value bridge will be bridges damaged because bridge (quantitative reconstructed of Mitch improvements have or Qualitative) and/or been completed rehabilitated. Date achieved 10/13/2000 06/29/2007 06/29/2007 Comments 102% rate of achievement. Review carried out in 2002 identified structural (incl. % weaknesses in some bridges. These were fully and effectively remedied by 2004 achievement) Indicator 4 : Road maintenance carried out throug micro-enterprises (ME) pilot program Total of 70 ME 22 micro- were established enterprises employing 889 Value established persons. 36 of these No micro- enterprise (quantitative providing direct ME were funded by program in place or Qualitative) employment to the Bank through about 300 persons 2006. 2, 700 km are from 2005) now under maintenance Date achieved 10/13/2000 06/29/2007 06/29/2007 Comments The pilot program was extremely successful and was scaled up considerably (incl. % during the life of the project. The program was fully funded by GOH resources achievement) at project completion Capacity Building: Indicator 5 : Improve transport sector management capacity with emphasis on the road subsector. UPEG#s planning unit would have been further strengthened in planning and DGC has been programming - restructured. UPEG training in HDM; has been Value preparation of a Weak sector management strengthened and (quantitative multi-year capacity the projected or Qualitative) investment training carried out. program, and The Road Fund is carrying out of operational road inventories. DGC will be restructured, the Road Fund will be fully operational

v Date achieved 10/13/2000 06/29/2007 06/29/2007 Comments A multi-year road investment program was prepared in 2005. Additionally (incl. % during the project life, capacity for environmental management was achievement) substantially improved, through the creation of a new unit (UGA).

G. Ratings of Project Performance in ISRs

Actual Date ISR No. DO IP Disbursements Archived (USD millions) 1 12/22/2000 Satisfactory Satisfactory 0.00 2 02/01/2001 Satisfactory Satisfactory 0.00 3 07/27/2001 Satisfactory Satisfactory 0.00 4 04/29/2002 Satisfactory Satisfactory 7.95 5 11/27/2002 Satisfactory Satisfactory 14.16 6 05/29/2003 Satisfactory Satisfactory 24.86 7 11/29/2003 Satisfactory Satisfactory 32.40 8 05/28/2004 Satisfactory Satisfactory 38.74 9 11/30/2004 Satisfactory Satisfactory 41.80 10 05/23/2005 Satisfactory Satisfactory 47.79 11 08/24/2005 Satisfactory Satisfactory 48.94 12 11/30/2005 Satisfactory Satisfactory 52.78 13 02/06/2006 Satisfactory Satisfactory 53.93 14 04/18/2006 Satisfactory Satisfactory 54.02 15 09/15/2006 Satisfactory Satisfactory 63.24 16 03/15/2007 Satisfactory Satisfactory 71.97 17 08/09/2007 Satisfactory Satisfactory 72.46

H. Restructuring (if any)

ISR Ratings at Amount Board Restructuring Disbursed at Restructuring Reason for Restructuring & Approved Restructuring Date(s) Key Changes Made PDO Change DO IP in USD millions The Project was restructured January 29, 2007 for the following reasons: (i) the formal inclusion of a new sub- component of the Project # 01/29/2007 N S S 69.92 civil works for the improvement of the Taulabe to La Barca section; (ii) the modification of another sub-component of the Project # the improvement of the San Lorenzo # Olanchito

vi ISR Ratings at Amount Board Restructuring Disbursed at Restructuring Reason for Restructuring & Approved Restructuring Date(s) Key Changes Made PDO Change DO IP in USD millions section # to include only studies and not works. This was a second tier restructuring in that it involved significant changes, but none in the Project#s development objectives or in the associated outcomes

I. Disbursement Profile

vii 1. Project Context, Development Objectives and Design

1.1 Context at Appraisal

In 1998, Honduras ranked among the least developed countries in the Western Hemisphere. It was the third poorest country in LAC with a GNP per capita of US$ 730. Unprecedented damage was caused to the physical infrastructure of the country when Hurricane Mitch struck the country in October 1998. An estimated 5,660 people died, over 8,000 disappeared and 12,270 were injured. Winds blew at speeds of about 285 km/hr and over a meter of rain fell in some areas. The Economic Commission for Latin America (ECLAC) estimated that the cost of damage incurred on roads, bridges and telecommunication infrastructure was about US$571.4 million (about 11 % of the GDP). Nearly 60% of the road network was affected; 100 bridges were either destroyed or severely damaged. The main trade road corridors suffered extensive damage to the point that Tegucigalpa and other towns were cut off from the rest of the country for several days. The San Pedro Sula airport was flooded and shut down for one week. A number of regions suffered from isolation as roads were buried under mud slides and from loss of power as lines went down.

When Hurricane Mitch struck, the government (GOH) was completing the implementation of the Transport Sector Rehabilitation Project (TSRP, Credit 2458-HO). The TSRP was scheduled to close on December 31, 1998 with most project targets fully achieved and, in some cases, exceeded. Some of the works financed under the project were damaged by the hurricane and this prompted the GOH to request an extension to its Closing Date to provide support to infrastructure repair. Thus on January 7, 1999, IDA approved a Supplemental Credit of US$20 million to Credit 2458 to assist the GOH with the immediate road and bridge reconstruction/repair needs. The Supplemental Credit was implemented and completed satisfactorily.

During the implementation of the IDA-financed TSRP, several positive developments took place in the road sector including: (i) shifting from road maintenance by force account to road maintenance by contract (100%); in the process, the staff of the General Road Maintenance Directorate (DGCCA) was reduced from 5,500 to 700; (ii) design and implementation of the Road Fund which was originally approved by Congress in December 1993, but which eventually became operational only in June1999; (iii) financing of road rehabilitation works (main, secondary and feeder roads) and bridge rehabilitation and construction; (v) financing the rehabilitation of the runway at the San Pedro Sula Airport; (vi) creation of, and provision of training for, a road unit within the planning unit of SOPTRAVI (UPEG --Unidad de Planificación y Evaluación de Gestión) to handle the economic evaluation, planning and programming of road investments; and (vii) design and implementation of a bridge management system (HONDUSAP) for the evaluation and prioritization of bridge

1 reconstruction.

TSRP made significant contributions to the improvement of the transport sector of Honduras, but an unfinished agenda was left to be dealt with. On the one hand, there remained a number of key projects to be implemented in regard to the restoration of roads and bridges damaged by Hurricane Mitch. On the other hand, there was the need to support the investment requirements and the institutional framework needed to carry forward the development of the road sector in line with national goals. GOH’s strategy was detailed in the Master Plan for National Reconstruction and Transformation (PMRTN). Particular emphasis was placed on the strengthening of the Road Fund organization and its associated funding to ensure adequate maintenance levels. Also, emphasis was placed on the improvement of the main trade corridors particularly those on the “Natural Corridor” (the road corridor along the Pacific side of Central America that connects all countries), the Pan-American Highway, and the Central Highway (the road corridor connecting Tegucigalpa and the central region of the country to Puerto Castilla), all of these part of the broader regional transport improvement program known as Plan Puebla Panama. Also, GOH's strategy required that SOPTRAVI continue to be strengthened and its capacity built to manage the transport sector, with particular emphasis on environmental management.

Consistent with this strategic framework, the rationale for the Project was to provide both immediate assistance in regard to Hurricane Mitch related damage and to support investment and institutional development in the road sector based on the successful experiences under the TRSP. The Project was consistent with the Country Assistance Strategy (CAS) dated December 14, 1999 to support the GOH medium term reconstruction program while laying the groundwork for a stronger economy and a more equitable distribution of the benefits of growth.

1.2 Original Project Development Objectives (PDO) and Key Indicators

The objectives of the Project were: (a) to restore roads damaged by Hurricane Mitch, which struck Honduras in October 1998; (b) to improve trade corridors; and (c) to establish a sustainable and accountable financial and institutional set- up for the road sub-sector.

The performance indicators to measure the achievement of the project’s objectives were: (i) verification that traffic volumes and vehicle operating costs on the upgraded roads meet those projected in the feasibility studies; (ii) implementation of the road maintenance pilot project through micro-enterprises; (iii) verification that the Road Fund finances the maintenance of at least 70% of the national network by the end of the project (main, secondary and feeder roads); (iv) rehabilitation / reconstruction of kilometers of main and rural roads and meters of bridges.

2 1.3 Revised PDO (as approved by original approving authority) and Key Indicators, and reasons/justification

There were no revisions to the project development objectives. Project key indicators were not revised with the following exception: As part of the first amendment to the credit agreement countersigned December 2005, GOH agreed to the following changes to the Implementation Letter: (A) (i) funds were to be allocated to the Road Fund sufficient to meet at least respectively of 40% in 2001, 55% in 2002, 65% in 2003 and 70% in 2004 of the maintenance needs on the national network; (ii) maintenance on the main road network will be prioritized to ensure 100% of the requirements are met form 2006 onwards; (iii) further actions will be taken to assure 100% of national road network requirements are met by 2010. (B) (i) number of micro-enterprises providing routine maintenance eon the paved network will increase as follows 22 in 2001, 44 in 2002 and 64 in 2003. (ii) from 2005, a sufficient number of micro- enterprises will be contracted and financed to meet 100% of the needs on the paved road network

1.4 Main Beneficiaries,

The population at large was primarily expected to benefit from the Project through the improvement of the road network with increased access, reduced vehicle operating costs and travel times. The population at large would also benefit from the increased economic activity along the various trade corridors.

Specifically the construction industry and consulting firms and individuals, many of these expected to be local, would benefit from the civil works to be implemented under the project which in turn would generate employment opportunities. Many of these opportunities were intended for people from rural communities with low skills, through the proposed road maintenance micro- enterprises program implemented under the project.

Finally SOPTRAVI and Road Fund staff members were to benefit from the project technical assistance component whose objective was to improve their institutional capacity.

1.5 Original Components

The project comprised five major components. Component 1 (i) was funded by the Spanish government. Component 1 (ii) was funded by the Nordic Development Fund. All other components were funded by the IDA credit and by GOH counterpart funding:

Component 1: Road Reconstruction, Rehabilitation and Improvement. This

3 component aimed at financing: (i) rehabilitation of Tegucigalpa – Danli Highway (US$19.2 million financed by Instituto de Cooperación Oficial de España, 84 km.); this section is part of one of the main Central America corridors that connects Tegucigalpa to the border of Nicaragua; (ii) rehabilitation of Jícaro Galán – El Amatillo Highway (US$6.3 million financed by Nordic Development Fund, 40.2 km.); this section is part of the “Natural Corridor”, and connects Honduras to El Salvador; (iii) reconstruction and rehabilitation of Santa Rita-Yoro (US$ 18 million, 46.5 km.); this road is the main link connecting Yoro to the rest of the country, and was severely damaged by Hurricane Mitch; (iv) improvement of San Lorenzo – Olanchito (US$ 11.8 million, 45 km.); this road connects the central part of the country to the Aguan River Valley and Port Trujillo in the Caribbean Sea, and was also damaged by Hurricane Mitch; and (v) improvement of Rio Dulce – El Porvenir (US$ 13.5 million, 46.5 km.), this road is part of the southern section of the Central highway and connects the central part of the country with the Aguan River Valley and the Port of Castilla on the Caribbean Sea.

Component 2: Rural Roads and Bridges Program. This component financed the reconstruction / rehabilitation of 550 linear meters of bridges, including the rehabilitation of 100 kilometers of high priority rural roads. This financing was a complement to the US$ 50 million rural road program financed by USAID for the rehabilitation of approximately 2 000 kilometers of unpaved roads and 2 000 linear meters of bridges.

Component 3: Road Maintenance Pilot Project. This component aimed at financing a pilot project of routine maintenance of main roads (between 900 and 1 100 kilometers), with the participation of local communities through the formation of micro-enterprises with the assistance of consultants.

Component 4: Consultant Services, Technical Assistance, Training. This component included the financing of: (i) consultants for the supervision of the works carried out under Components 1, 2 and 3; (ii) technical assistance to SOPTRAVI, including the Management Planning and Evaluation Unit (Unidad de Planificación y Evaluación de Gestión - UPEG) and the Environmental Unit (Unidad de Gestion Ambiental - UGA); (iii) technical assistance to strengthen the Road Fund organization; (iv) technical assistance to complete the work begun under Credit 2458-HO on the rationalization of the railways; (v) technical assistance for the implementation and monitoring of the Road Maintenance Pilot Project; (vi) implementation of a training program for SOPTRAVI and Road Fund; and (vii) contracting of a consulting firm for the Project Coordination Unit (PCU).

Component 5: Goods. This component aimed at financing a limited amount of goods for SOPTRAVI (pavement evaluation equipment, vehicles, and computers) and for the Road Fund (computers, vehicles).

4 1.6 Revised Components

Due to a shift in government priorities and a renewed focus on the Regional Integration Program PPP (Plan Puebla Panama), the rehabilitation and upgrading of the Northern Highway became a major sector priority for the GOH. Under these circumstances, sector authorities asked IDA for the reallocation of credit proceeds from the San Lorenzo-Olanchito road to Taulabe – La Barca road, a section of the Northern Highway (52 km). IDA approved this revision in principle on April 23, 2003 justifying it by its coherence with the main objectives of the project – it forms part of the “corredor logistico” which is the key road in Honduras for Central America Trade Integration - and by its evident economic viability. In addition it should be recognized that the feasibility study on this and one other section (works for which were to be funded by IDB) of the “corredor logistico” were funded by IDA under the previous project. In regard to San Lorenzo to Olanchito section, it was determined that the works could not feasibly be completed within the timeframe of the Project. Support however was to continue to be provided for the preparation of a detailed plan required for the preservation of the fragile natural environment through which the road passes (bosque tropical muy seco) and for the sustainable protection of endangered endemic species in the area, notably the Honduran Emerald Hummingbird (colibri esmerelda).

1.7 Other significant changes

During project implementation, there were two credit amendments as listed below:

The first credit amendment, in December 2005, included (i) a reallocation of funds to increase the number of kilometers of roads to be maintained by micro- enterprises, from 900 to 1,670, due to the highly satisfactory performance of the road maintenance pilot program to that date, which had assured cost effective and timely maintenance services, and the social and economic positive impacts on rural communities; (ii) an extension of the loan closing date, originally scheduled for March 31, 2006, to June 30, 2007, in order to accommodate IDA financing for eleven additional months to support the routine maintenance micro- enterprise program, from March 2006 to January 2007 and the revised schedule for the completion of the trade corridor improvements to be funded by the Credit; and, (iii) an increase in the aggregate ceiling for civil works contracts procured through micro-enterprises, from US$4.6 million to US$8.0 million, with the purpose of bringing the category ceiling in line with the planned procurement of routine maintenance contract work for the additional year. The credit amendment also provided for the revision of the targets for road maintenance funding and for micro-enterprise development as mentioned earlier under Revised Project Development Objectives.

A second amendment on the Credit Agreement was granted in January 2007, to

5 formalize the inclusion of Taulabe-La Barca road improvement as a new sub- component of the project and to limit the San Lorenzo-Olanchito road improvement only to studies. In April 2003 as previously mentioned, the Bank had approved the reallocation of funds; however, there was no amendment to the Credit Agreement made at that time.

The improvement of about 53 kilometers of Taulabe-La Barca road included: (i) the rehabilitation of about 31 kilometers of carriageway; (ii) improvements in road geometry to improve visibility and safety; (iii) the addition of two lanes to over 14 km of high traffic areas; (iv) the addition of a third climbing lane to over 8 km of high gradient sections; and (v) various other improvements in road design and road furniture which increase road safety for vehicles, pedestrians and cyclists.

As a consequence of the second amendment, the San Lorenzo-Olanchito road component was reorganized to cover only the following elements: (i) engineering and economic analyses of construction alternatives; (ii) social and environmental assessments, including, but not limited to, the Honduran Emerald Habitat Study; and (iii) preparation of a plan covering actions to be taken to mitigate any negative natural habitat impact likely to be caused by subsequent improvement works.

2. Key Factors Affecting Implementation and Outcomes

2.1 Project Preparation, Design and Quality at Entry

The overall quality at entry and preparation is rated satisfactory. In general, the project was designed to achieve the benefits it was intended to deliver. The project development objectives were clear, realistic and relevant. These reflected both the Borrower’s development priorities at the time as described in the PMRTN, and also the Bank’s strategic objectives as outlined in the CAS at that time. This was commendable, given that the project had to be prepared and appraised quickly in response to the need to provide resources to respond to Hurricane Mitch, in line with one of the project’s development objectives.

The project components were well targeted to accomplish the project development objectives. Their design was technically sound, based on comprehensive technical, economic and fiduciary assessments. Project design provided that bidding on some of the proposed works could not go ahead until the completion of either a satisfactory environmental impact analysis (the case of San Lorenzo to Olanchito) or an acceptable resettlement plan (El Negrito to Portillo de Chancaya and Rio Dulce to El Porvenir) was in place.

Potential risks and measures to mitigate them were generally identified and incorporated in project design. The project’s implementation arrangements were

6 well conceived as detailed in the PAD and in the project’s operational manual. Specifically, the institutional set-up of hiring a consulting firm to help SOPTRAVI manage and administer the project in the role of a PCU was a forward looking proposal.

2.2 Implementation

During project implementation, the following were the key factors that affected project performance:

Delays in the fulfillment of conditions for loan effectiveness. The procurement process for contracting the consulting firms responsible for project management (outsourcing of PCU) and external auditing took longer than expected and delayed the start up of the project. Both firms needed to be contracted as a condition for loan effectiveness. In both processes, GOH was slow to approve the contracts, resulting in delays of approximately one year. Thus, although the IDA Credit was approved in November, 2000, the credit only became effective in November 2001.

Lengthy implementation of the Action Plan for the preservation of the Emerald Hummingbird habitat. In order to initiate the bidding for the San Lorenzo-Olanchito road civil works, the implementation of an Action Plan for the preservation of the Emerald Hummingbird habitat was required. The preparation of an acceptable action plan took much longer than originally anticipated because it comprised many related activities and also required the prior declaration of the zone as a protected one. The plan aimed at the conservation of at least 3 000 out of the 4 000 hectares of tropical dry forest (bosque tropical muy seco) which were found on both sides of the San Lorenzo – Olanchito road. All the activities in the plan have now been completed only. Decisions though have yet to be taken in regard to the various recommendations made for sustainable environmental management in the area –such as instituting payments for environmental service to private owners whose land includes stands of the forest.

Requirement for a remedial resettlement plan for the Taulabe to La Barca road section. As previously mentioned, the project was restructured to include the civil works for the improvement of this new section. A resettlement plan had been originally prepared in October 2004 prior to the commencement of works in February 2005. However a subsequent review of this plan carried out by the Bank safeguards team in September 2005 revealed deficiencies in relation to Bank guidelines – principally that the payment of compensation to affected households and businesses did not concur with the Bank requirement that livelihoods be fully restored. Subsequently, therefore, SOPTRAVI was required to prepare a remedial resettlement plan before the formal inclusion of the road as a new sub-component of the project as part of a proposed restructuring. The Bank provided substantial assistance to the client during supervision such that an

7 acceptable remedial resettlement plan was accepted by the Bank in December 2006.

Cost increases in regard to civil works execution. Most of the civil works carried out under the Project experienced cost increases in relation to estimate. These increases were attributable to different causes such as: (i) additional tasks identified during works execution not contemplated during road engineering designs; (ii) changes needed due to problems in engineering designs and to considerable lags between the dates of design preparation and of works execution; and (iii) price adjustments higher than originally budgeted. For the IDA financed roads, these cost increases could be accommodated due to the SDR/US dollar devaluation and there were no shortfalls in the completion of works. In the case of Tegucigalpa-Danli road, funded in full by the Spanish government, only about 55% of the road as originally specified could be completed with the available funding. The financing of road rehabilitation and improvement increased from US$68.8 million as projected to US$ 91.8 million as delivered.

Frequent turnover of key staff. There were a number of changes in key staff during the project, particularly at the time of, and as a result of, the change in the Government administration at the beginning of 2006. Not only did the Minister, Vice ministers and Department heads change, but also the contracts of a number of key consultancy staff were not renewed. Such changes had a somewhat adverse effect lasting about 6 months into the year in terms of the effectiveness of project oversight, mitigated however by two factors mentioned below. Firstly, project implementation was not too seriously delayed due to the continuity provided in the PCU, services of which were provided under a consultancy services contract not affected by the change in government. Also it should be noted that through the efforts of the project, improved procedures and policies adopted in key department of SOPTRAVI made the organization more robust than before to staff turnover.

2.3 Monitoring and Evaluation (M&E) Design, Implementation and Utilization

Monitoring and Evaluation (M&E) According to the Project’s design, progress implementation was measured against a list of monitoring outputs and outcomes indicators defined in the PAD for the following interventions: road corridor reconstruction and improvement, rural roads and bridges program, and road maintenance pilot program.

The M&E indicator targets were specifically linked to the project, and focused on achievement of different project outputs over given periods. During implementation, the system was developed and used by the PCU as the project successfully achieved most of its objectives. The monitoring of achievement of

8 outputs was carried out and documented on a regular basis. This was not however consistently done in the case of measurement of outcomes. Some “ad hoc” studies were carried out, for example in relation to the ex-post economic evaluation of road improvements.

The Project was to provide through goods and consulting services the assistance required by SOPTRAVI to design and implement an overarching M&E system for the transport sector as a whole. However, the project advanced only the first phase of the sector M&E system, purchasing the equipment and designing the inputs, outputs and outcomes indicators. The second phase of this system will now be financed and implemented by SOPTRAVI with the support of an IADB loan.

2.4 Safeguard and Fiduciary Compliance

Safeguards: Project preparation with respect to environmental assessment was carried out in accordance with Bank operational directives. The Project was assessed as Category B. SOPTRAVI developed additional capacity for environmental management (UGA) during the implementation of the Project. All civil works carried out under the Project were regularly assessed for compliance with GOH and Project specific requirements.

The project also supported the implementation of the Honduran Emerald Hummingbird action plan before the start up of works in the San Lorenzo – Olanchito section. The Action Plan was required for the preservation of the Emerald Hummingbird habitat. The project assisted in the development of the following actions: (i) creation of a project executing unit to manage the plan; (ii) extension of the Pico Bonito National Park area; (iii) cadastre and demarcation, (iv) identification and registration of land owners to establish incentives for conservation, (v) protection of the areas, (vi) environmental education, (vii) development of ecotourism and (viii) environmental monitoring of protected species. Under this technical assistance, the following activities were executed satisfactorily: (i) rural cadastre and occupiers census; (ii) declaratory of the Poligono de Tiro de la Fuerza Aerea as a protected area and the demarcation of the area and, (iii) identification and registration of land owners of potential ecological services or private reserves to establish incentives aimed at the conservation of the Honduran Emerald Hummingbird. Further actions, including the biological monitoring of the protected area and an environmental management plan for the Honduran Emerald Hummingbird are still pending and SOPTRAVI is providing the resources to continue with these activities. Despite the somewhat lengthy period over which the activities were carried out, it is to SOPTRAVI’s credit that the activities were completed such that consideration could now seriously be given to undertaking the works improvement under subsequent financing. It is to be noted that the completion of the action plan required a substantial amount of coordination with other GOH agencies, the responsibility for which largely fell to SOPTRAVI.

9

In regard to social assessment, the Project generally followed acceptable and appropriate guidelines, including a resettlement policy framework document for the roads sector. An issue however arose in regard to the resettlement plan prepared in October 2004 for the Taulabe to La Barca road section which was in due course to be formally integrated as a new sub-component of the Project. A Bank safeguards review in September 2005 found this plan to be deficient in regard to Bank guidelines in regard to the compensation of affected parties. Therefore a remedial resettlement plan had to be worked through. It is worth noting that the Government did then undertake remedial actions and the road resettlement activities were successfully completed and in full conformity with the Bank requirements. It is again to SOPTRAVI’s credit that they fully and actively supported all the remedial measures that had to be taken to ensure compliance.

Financial Management: Fiduciary aspects of the project were carried out by the PCU staff on behalf of SOPTRAVI. The activities were found to be satisfactory during project implementation and at completion. The formal external financial audit for the Project was performed on an annual basis, stating the adequacy of the accounting system and internal controls, the reliability of the Statements of Expenditure (SOEs) as a basis for credit disbursements, and compliance with the credit agreement. The external audits were carried out in accordance with International Standards of Auditing each year and the reports submitted were found to be free of major qualifications and submitted in a timely manner.

Procurement: SOPTRAVI staff with the assistance of the PCU carried out procurement activities in accordance with IDA procurement procedures. The preparation of tender documents and procurement proceeded smoothly without any major problems, and the record keeping and filing systems were good. The PCU reported procurement information to IDA on a quarterly basis. Bank procurement staff carried out periodic ex post reviews and was satisfied with the high level of performance of the Project.

2.5 Post-Completion Operation/Next Phase

The improved road trade corridors, financed under the project, are already in operation and being maintained by the Road Fund under its pluri-annual maintenance plan. Routine maintenance activities are being carried out by micro- enterprises assigned to the specific section. The utilization of the improved corridors is expected to be high, in fact higher then originally forecast due to strong growth in regional trade and traffic. This has been fostered, inter alia, by the signing of the CAFTA-DR trade agreements with the USA and by renewed interest in the promotion of regional economic integration through coordinated transport investments under the Plan Puebla Panama. The completion of the Tegucigalpa-Danli section is an important element of the plan as it affords

10 efficient access of Nicaraguan producers to ports in Honduras.

In the context of the new 2007-2010 CAS for Honduras (approved November 30, 2006) further support to the road sector is envisaged, primarily as a means of providing the infrastructure support needed for the GOH agenda to promote growth and competitiveness. It had originally been intended that this support be provided through a second (infrastructure oriented) phase to the Rural Competitiveness Project, scheduled for FY2010. A decision was subsequently taken to proceed with the preparation of a road repeater project – for delivery in FY2008 - with the same objectives and components as the recently completed project with the sole exception of the part dedicated to Hurricane Mitch restoration. IDA is now working with the Government to develop this follow-on operation in the expected amount of US$45 million equivalent. The new project will also help sustain the reforms and carry on as necessary technical assistance to SOPTRAVI and Road Fund with particular emphasis on: (i) increasing private sector participation in road management; (ii) increasing resource flow to road maintenance; (iii) extending the micro-enterprise program; and (iv) increasing the effectiveness and efficiency of SOPTRAVI as a road management agency.

3. Assessment of Outcomes

3.1 Relevance of Objectives, Design and Implementation

The Project development objectives, their design and implementation are fully consistent with the current development priorities of the GOH, emerging from the Poverty Reduction Strategy (PRS). The project development objectives are directly relevant to three of the four pillars of the current CAS: competitiveness, sustainability, and macroeconomic stability (Country Assistance Strategy Progress Report). Thus, the objectives are still relevant because they are consistent and in line with the government’s broader objectives to promote growth, since the deficiencies of road infrastructure, especially in rural areas, constitute a limitation for economic growth and competitiveness.

The project’s objective link to the achievement of other key results expected in the GOH´s Multiyear Investment Strategy 2007-2010 supported by the present CAS which includes: (i) reaching an annual 5-6% growth rate of the economy while sustaining macroeconomic stability and generating employment, (ii) reaching the Millennium Development Goals (MDGs), (iii) improving the quality of energy and transport services and (iv) promoting competitiveness, particularly in the rural areas.

Specifically, the focus of one of the PDOs on restoring infrastructure damaged by Hurricane Mitch was highly relevant in view of the significant economic and social costs incurred by the country in its immediate aftermath.

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3.2 Achievement of Project Development Objectives

The achievement of project development objectives is rated overall as satisfactory. Virtually all the intended project outcomes and outputs have been achieved.

Restore roads damaged by Hurricane Mitch. Achievement of the objective is rated highly satisfactory. The project successfully achieved the implementation of the Rural Roads and Bridges Program formulated in response to Hurricane Mitch. This rating is justified because (i) basic transit was restored in key rural areas cut off as a result of the hurricane, (ii) communication was restored on secondary roads resuming agricultural production and continuity of various economic sectors; (the IDA credit support being complemented by other donor programs), and (iii) private companies and community members participated in the execution of small civil works, generating short-term employment. The expected project estimated outputs were exceeded: 102 km of high priority rural roads and 566 linear meters of bridges in Santa Barbara and El Paraiso departments. An additional feature was that the design of the new bridge structures took advantage of the HONDUSAP systems set up under TRSP and were expected to be resilient in the face of future events of comparable magnitude.

Improve road trade corridors. Achievement of this objective is rated satisfactory. The major civil works contracts for the rehabilitation of the five sections financed under this component were almost fully completed, and 236 km out of the 262 km initially proposed were rehabilitated or reconstructed with substantive impact on the road network system and on user benefits. The variation in relation to the original targets was due to: (i) the cancellation of San Lorenzo – Olanchito section (45 km) the funds for which were reallocated to Taulabe - La Barca section (53 km); and, (ii) the high cost increases experienced in Tegucigalpa - Danli section, reducing the extent of the works completed under the Project from 84 km to 50 km.

All the sections rehabilitated or improved form part of the most important logistical corridors for their economic importance and their potential contributions to the integration of the country with the neighbouring countries. They serve as important commercial trade links for the north, central and south zones of the country, and all were included under the PMRTN.

The completed rehabilitation and reconstruction of all the road sections has extended the life of the pavement and average roughness (IRI) has been reduced from 5 - 7 on average, to under 2. This is reflected in major benefits in terms of reduction in vehicle operating costs and travel times - a combined average benefit to the road user of a 26% reduction on average compared to the situation before the project - and should facilitate the increase of exports and imports between Honduras and its major trading partners. All these road sections are

12 currently in operation and are being maintained by the Road Fund.

The rehabilitation of Tegucigalpa - Danli section benefited the departments of Francisco Morazan and El Paraiso, improving the connection between Honduras and Nicaragua and ensured interregional transport and trade since this road is used by Nicaragua to access Puerto Cortez, the main Honduran port on the Caribbean Sea, for the export of coffee and other products. Works in this section reduced vehicle operating costs by 24% and increased average daily traffic from 2,500 to 3,190 in 2007. GOH has initiated discussions with the Government of Spain in regard to additional financing beyond the life of the Project to complete the works on a 42 kilometer section which has yet to be improved.

The rehabilitation of Jicaro Galan - El Amatillo highway improved the connection between Honduras and El Salvador, a critical element in the Plan Puebla-Panama road regional integration program. This highway represents one of the most highly trafficked sections of the southwestern region of the country and is part of what is called “Natural Corridor” that connects all the Central American countries. Works in this section contributed to reduced vehicle operating costs by 7% and increased average daily traffic from 2,430 in 1999 to 3,263 in 2005.

The rehabilitation of Santa Rita-Yoro, specifically the section El Negrito - Portillo de Chancaya which was severely damaged by Hurricane Mitch, benefited El Negrito, Morazan and Yoro municipalities. Works in this section contributed to reduced vehicle operating costs by 21% and increased average daily traffic from 1,275 in 1999 to 1,957 in 2005. This section is the main link connecting Yoro to San Pedro de Sula and El Progreso, important economic centers; and its rehabilitation and reconstruction ensured local supplying and trade.

With respect to Rio Dulce - El Porvenir improvement, works in this section enhanced the connection of the central part of the country with the Aguan River Valley and Puerto Castilla on the Caribbean Sea, benefiting the department of Francisco Morazon, and reduced vehicle operating costs by 51%. In addition, average daily traffic increased from 800 in 1999 to 1,202 in 2005.

Finally, improvements to the Taulabe - La Barca section of the CA-5 Highway were supported by the project. This road forms part of the “corridor logistico” and is crucial to the country’s trade and competitiveness prospects. The improvements included adding a third lane on steep gradients and upgrading the road to a four lane highway in one stretch. The improvements are expected to improve safety for the road user in addition to other benefits. The works benefited Cortes and Comayagua departments; enhanced transport and trade with El Salvador, Guatemala and Nicaragua, in compliance with Plan Puebla-Panama; and helped reduce vehicle operating costs by 19% and increase average daily traffic at a rate of 4.1% per annum to about 5,170 in 2007.

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In general, these road corridors are now in condition to better support the increase of exports and imports between Honduras and its major trading partners in the Central America Region. The benefits to trade also come from initiative taken by the government in trade policy such as the signature of the CAFTA-DR agreement and the certification of Puerto Cortes for container traffic to the USA.

Establish a sustainable and accountable financial and institutional set up for the road sub-sector. Achievement of this objective is rated satisfactory. The creation of the Road Fund in 1998 has been a very positive step toward the establishment of a sustainable financial and accountable set up for the road sub- sector in Honduras. The performance of the Road Fund agency during project implementation has been satisfactory with few shortcomings as explained below. In addition, the projected improvements in SOPTRAVI planning and environmental management capacity have been achieved and the respective units UPEG and UGA have been provided with the structures, tools and experiences to improve their performance.

During project implementation, the Road Fund has provided a higher volume of resources, in real terms, for road network maintenance than before the project, although not as high as determined by the law of its creation or fully in compliance with the targets established for the Project. It is important to mention that all works (periodic and routine maintenance) continue to be contracted out to the private sector and an important portion of its budget is going through the successful micro-enterprise program (focused for now on paved road routine maintenance) designed and initially financed (in part) by the Project. Furthermore, the institutional capacity of the Road Fund has improved substantially. There are fewer delays experienced in contracting and cost overruns are being better managed than before. The latter is shown by the fact that operation and administrative overhead of the agency have been held within the mandated ceiling of 2.5% of expenditures.

The Project supported the successful implementation of the Road Maintenance Pilot Project. By the end of the Project, 70 micro-enterprises had been formed, of which 36 (compared to the original target of 22) had been financed by IDA until January 2007 and the others by the Road Fund. That is to say that the pilot was not only successfully extended early in the life of the project but that is has since been mainstreamed as a specific maintenance program of the Road Fund. The micro-enterprises are formed by inhabitants from the same community or neighboring villages located near the road section to be maintained. The program now directly benefits a population of 5,394. It is worth noting that the project also provided training activities for the micro-entrepreneurs of the community associations, which increased their capacity in terms of organizational aspects such as teamwork, administration, programming, costs, accounting, report writing, legal and tax affairs, and administration of their contracts. Also, this program provides economic benefits since the micro-entrepreneurs have

14 improved their quality of life. 45% of them built their houses, while the rest made some house improvements (water and electric services, floor and ceiling improvements, domestic appliances).

With the regards to the shortcomings, the target for the percentage of road maintenance needs met by the end of the project was not met. Historically, transfers were less than what was requested, resulting in shortage of funds in attending to the national network. The Road Fund’s policy was to prioritize paved road maintenance with most of any shortfall coming in regard to the unpaved network. By 2007 95% of paved road maintenance was funded whereas only 40% of unpaved was covered. The average coverage achieved was about 65% compared to a target of 70%. In terms of an agreement reached with SEFIN and the sector donors including the Bank, it is planned that at the end of 2010, 85% of the national network will be covered

The Project was able to contribute successfully to the continued development of SOPTRAVI as an effective and efficient road management agency, albeit in a more modest way than it did for the establishment of the Road Fund. Within UPEG, the contribution was towards the establishment of a comprehensive management information system and on the introduction of and training on road management tools such as the Highway Design and Maintenance Model (HDM). Within UGA, substantial improvements were made in building in-house capacity in environmental management, developing monitoring tools and carrying out studies in such areas as road materials management. The project was able to help develop policies and procedures to strengthen the management framework of key units in SOPTRAVI which actions helped to offset the potential negative impact of turnover in key staff.

3.3 Efficiency

At appraisal, an economic analysis was carried out for each road section under the improved trade corridors component, using the HDM model. The results of the HDM analyses and the corresponding Net Present Values (NPV) for the respective road sections were calculated. The results of the economic evaluation of the project, aggregating the five road sections, resulted at appraisal in an estimated NPV for Road Component of US$ 90.8 million and the corresponding average Internal Economic Rate of Return (IERR) of 27.3%. The individual road sections had an estimated IERR ranging from 23% to 34%.

At completion, ex-post economic evaluations were carried out for the five road sections (noting that in this case Taulabe – La Barca section replaces San Lorenzo – Olanchito section). The analyses were carried out by UPEG staff and were performed using the HDM model, version 4 These took into account the revised implementation schedules of the various works as well as the final

15 capital cost of the works converted into US dollars. A discount rate of 12% was employed. To ensure comparability with the ex-ante estimates, the only benefits quantified for inclusion in the analysis are estimated vehicle operating cost and travel time savings accruing from the improvements.

Ex-post analyses at completion resulted in a total NPV of US$ 168.3 million, with an average ERR of 33.9%. The economic return of the road component remains therefore at a highly satisfactory level. The details of the analyses for each road section are included in Annex 5.

With respect to the Rural Roads and Bridges Program, the rural roads were chosen so as to ensure an overall positive NPV for the program at a 10% discount rate. No ex-post economic analyses for these rural roads was carried out.

3.4 Justification of Overall Outcome Rating

Rating: Satisfactory

The overall outcome rating is based on the combined assessment of relevance, efficiency, and achievement of the project development objectives. As explained in the previous sections, the relevance of the project is high and its efficiency is substantial. The achievement of the project development objective is assessed overall as satisfactory given in particular: the successful implementation of the Rural Roads and Bridges Program formulated due to the Hurricane Mitch, the increase in efficiency due to the rehabilitating and maintaining of the road network and key logistical corridors, the progress made in strengthening SOPTRAVI and Road Fund and the highly successful start up of routine road maintenance through micro-enterprises.

3.5 Overarching Themes, Other Outcomes and Impacts

(a) Poverty Impacts, Gender Aspects, and Social Development

The Road Maintenance Pilot Project under the Project envisaged the creation of 22 micro-enterprises for routine road maintenance. However, the implementation experience has been so positive that an additional 48 micro- enterprises have been created that now provide routine maintenance for about 2,700 kms, which is 91% of the paved road network. It is important to underline that this pilot project has had an important poverty reduction impact, since it directly benefited 899 rural people working at micro-enterprises and indirectly, 5,394 people in associated households. The project provided, during both establishment and operational phases, training in organization skills, team work, accounting and enterprise administration, and guidelines and operational manuals for performing their technical work. These micro-entrepreneurs are constantly supervised not only to achieve their monthly plans but also to empower them to work with social aspects of their communities. In this sense,

16 they participate in activities such as cleaning of schools, sports centers, police stations and churches; transport of patients and corpses; and repair of schools.

As a result of the training, most of the micro-enterprises have diversified their activities, for example: 44% of the micro-enterprises sell the trash picked up from roads to recycling plants; 42% grow maize, vegetables or coffee cultures; 14% raise fish, and 8% sell retail items. Finally, another impact of this pilot project on the micro-entrepreneurs is the improvement of house, food, dress and education of their children. It is worth noting that 45% of micro-entrepreneurs were able to build their houses.

(a) Institutional Change/Strengthening

The project made important contributions to the institutional development of the transport sector in Honduras. In particular, the project: (i) provided technical assistance to strengthen capacity for planning, administration and management through the design and implementation of multiyear road investment plans, (ii) implemented the road maintenance system by introducing periodic and routine maintenance through private contractors – all works now are contracted out to the private sector and a significant portion of the current budget is assigned to micro-enterprises (iii) improved pavement management through the introduction of a pavement management system and a certification, analysis and control system for asphalt and crushing plants; (iv) promoted private sector participation through the development of a pilot maintenance program with different contracting options such us routine micro-enterprises and outsourcing supervision; (v) provided technical assistance for the restructuring of the DGC of SOPTRAVI and (vi) strengthened institutional capacity for social and environmental management – including the first examples developed in-house of resettlement programs associated with three of the road corridor improvement projects.

(c) Other Unintended Outcomes and Impacts (positive or negative)

The necessity of carrying out a remedial resettlement program for the Taulabe to La Barca road section – as the original plan was deemed not in compliance with Bank guidelines on review in September 2005 – afforded an opportunity to review and subsequently improve the quality of assistance provided to households and businesses which had to be relocated out of the right of way once construction began. The beneficiaries numbered 175 families, 23 car washers and 27 fruit vendors.

All the displaced families were initially located within the limits of the right of way, property of the GOH. These families improved their legal situation since their resettlement included the provision of property deeds of the land where they were finally relocated. In addition, the resettlement plan included the provision of technical assistance and materials for the construction of houses, as

17 well as materials for the improvement of ceilings, floors and latrines.

For car washers, the resettlement plan included the construction of road side areas (“bahias”) and the foundation of a mixed cooperative called Jardines de Taulabé. For fruit vendors, a market was built, which included energy and water services. Also, the Caja Rural de Ahorros y Crédito La Cascada was founded. Currently, the road side areas and the market are functioning adequately, according to the agreements reached during the implementation of the resettlement plan.

3.6 Summary of Findings of Beneficiary Survey and/or Stakeholder Workshops

Not applicable.

4. Assessment of Risk to Development Outcome

Rating: Moderate

The level of risk to development outcome is rated moderate. Technical sustainability of physical investments in the road sub-sector made under the project is likely, due to the Road Fund’s improved capacity to plan, program and maintain the rehabilitated roads in a sustainable manner through the micro- enterprises program and the outsourcing of periodic maintenance. It is important to mention that at Project closing date, the following roads are already being maintained by micro-enterprises: Tegucigalpa-Danlí (50 km), Jícaro Galán-El Amatillo, Santa Rita-Yoro (section El Negrito-Portillo De Chancaya), Río Dulce-El Porvenir,) and Taulabé-La Barca

Although paved road network maintenance is 95% covered and funding is available for all micro-enterprises (now 70) on recurrent basis, the 2007 budget provides for only about 65% of the targeted amount, with a shortfall mostly on the unpaved road network. For this reason, there is a moderate risk to development outcome arising from any future shortfalls in the provision of maintenance funding. Mitigation of this risk has been provided and implemented, prior to closing date, through a formal agreement with the GOH that the transfer of resources to the Road Fund will be increased by 10% annually starting in fiscal year 2007 until 2010. It has been estimated that with this increase, the Road Fund will receive sufficient revenues to cover the costs of its administration and operation as well as 85% of the road maintenance needs on the network. This agreement will be monitored on a regular basis through the “Cooperation Round Table” of representatives from the IDA, the Millennium Challenge Account (MCA), the IADB, the Central American Bank for Economic Integration (CABEI) and the Japanese International Cooperation Agency (JICA). It is also underpinned by conditionally in regard to the continuance of sector funding from MCA.

18 5. Assessment of Bank and Borrower Performance

5.1 Bank Performance

(a) Bank Performance in Ensuring Quality at Entry

Rating: Highly Satisfactory

Overall, the Bank’s performance during preparation was highly satisfactory, specifically in the speedy and effective way in which it responded to GOH requests for assistance in designing the response to Hurricane Mitch. The Bank provided exemplary guidance to GOH in designing the strategies to make operational the Road Fund and to give birth to the micro-enterprises program.

In addition, it is to be said that the Bank generally engaged in fruitful dialogue with the Borrower and together they prepared this IDA-financed operation (CR- 34320) drawn from lessons learned in the previous project (TSRP) and the supplemental credit. Project design was based on economic and sector work and appropriately responded to GOH´s strategy for the road sub-sector contained in the PMRTN. There was a strong IDA effort to coordinate its interventions in key logistical road corridors of the transport sub-sector with ongoing efforts from other international financial organizations, particularly the Government of Spain and the Nordic Development Fund.

This was a project to encourage the continuous evolution of the transport sector of Honduras. IDA mission staff had diversified and appropriate skills to perform tasks such as: (a) assessing the reconstruction, rehabilitation and improvement of roads and bridges included in the Hurricane Mitch National Plan, (b) defining the strategy for continuing IDA´s support to improving road maintenance practice at the Road Fund, (c) assessing the needs for implementing a maintenance pilot subprojects through micro-enterprises to stimulate employment in rural areas; (d) selecting the key roads or strategic corridors and, most importantly; and, (e) designing institutional arrangements that the project required for successful implementation, including the innovative use of private sector management consultants in the PIU.

(b) Quality of Supervision

Rating: Highly Satisfactory

The Bank’s performance was crucial for the achievement of most project objectives and is rated highly satisfactory. Particularly noteworthy were the contributions of the Bank towards: (i) the scaling up of the micro-enterprise program when it was clear that the original objectives were set at too modest a

19 level; (ii) the effective way in which the delays in completing a satisfactory environmental assessment for the San Lorenzo – Olanchito road were handled resulting both in value added to the environmental review process on that road and to the replacement of works on this section in the project by Taulabe – La Barca; and (iii) the way in which the requirement for a remedial resettlement action plan for Taulabe – La Barca was handled, devoting substantial time and expertise over a period to 18 months to resolving a major implementation issue.

The Bank closely supervised project implementation and focused in particular on compliance with the Project development objectives, and progress was closely monitored and reported on in depth in Aide Memoires prepared during each supervision mission. All relevant aspects of project implementation were carefully analyzed and a permanent dialogue between IDA and SEFIN was established, recorded and monitored.

The Bank took timely corrective actions, such as: reallocating credit funds due to cost overruns, readjusting targets to accommodate changing conditions, extending the credit closing date to compensate for implementation delays due to external actors, providing technical assistance for compliance with safeguard policies, especially for the involuntary road resettlement plans, and finally, providing training in procurement and financial management.

(c) Justification of Rating for Overall Bank Performance

Rating: Highly Satisfactory

The overall rating for IDA performance is highly satisfactory. This rating is supported by the project results and the successful achievement of all its objectives. There were several particularly notable aspects of the task team performance such as the support given to the micro-enterprise program as well as the successes obtained in the way in which environmental and social safeguard issue arising under implementation were handled.

5.2 Borrower Performance

NOTE: When the government and implementing agency are indistinguishable, provide rating and justification only for Overall Borrower Performance.

Click here if the Government and the Implementation Agency is the same or indistinguishable

(a) Government Performance

Rating: Satisfactory

20 GOH performance is rated satisfactory. The government showed strong ownership and a high level of commitment during project preparation, especially in accepting improvements in capacity of the Road Fund and SOPTRAVI as far as the technical assistance component was concerned, and maintained this commitment throughout project implementation. Government arranged to carry out the background analyses necessary for project preparation and through adequate legislation and introduction of other measures the government facilitated other sub-sector reforms for improving the financial outlook of the Road Fund such as: (i) restructuring of the DGC, (ii) contracting of a consulting firm as the PCU accepting the weakness showed by the procurement assessment capacity within SOPTRAVI; (iii) the outsourcing of road periodic and routine maintenance for the road network to the private sector; (iv) permitting that funds were available in a timely manner consistent with a maintenance program established by the Road Fund, and (v) acceptance of new procedures and guidelines for road environmental and social assessments.

Despite the very tight fiscal environment faced by the GOH, counterpart funds allocated to the project were made available as required and, with some exceptions, arrived in a timely fashion. An adequate transfer of funds to the Road Fund in accordance with the Law was however not maintained and the GOH failed to provide the resources necessary to meet the targets agreed under the Project. However subsequent agreement has been reached with the Bank and the donor community on actions required to progressively increase transfers to the Road Fund to the levels required.

(b) Implementing Agency or Agencies Performance

Rating: Highly Satisfactory

Implementing Agency : Implementing Agencies (SOPTRAVI, Road Fund and the PCU)

The overall performance of SOPTRAVI and the Road Fund is rated as highly satisfactory. In spite of the turnover of staff, all agencies performed commendably well and met all their obligations on a consistent basis. The agencies worked well with the Bank in terms of resolving problems that arose during implementation and took leadership in particular regard to environmental management and the emerald hummingbird action plan. The performance of the private firm recruited to act as PCU was outstanding and helped ensure the proper documentation on all aspects of the project.

21 The PCU maintained a very high standard throughout, due in great part to the continuity, competence and strong motivation of its staff. The firm’s efforts to ensure compliance with the project’s objectives and smooth implementation of the project components were very effective as most of the project outputs were satisfactorily achieved in a timely fashion.

Fiduciary aspects of the project were well managed. No major procurement problems arose and bidding was undertaken for the most part in a timely fashion. Financial management was carried out in a largely satisfactory way. Monitoring and evaluation arrangements were generally satisfactory. The efforts of the implementing agencies greatly assisted the IDA missions in terms of the preparation of Aide Memoires and the effective follow up on all outstanding actions.

(c) Justification of Rating for Overall Borrower Performance

Rating: Satisfactory

The overall borrower performance is rated as satisfactory.

22 6. Lessons Learned

An externally managed PCU can help increase efficiency in project implementation. A management consultant firm was hired to perform the work of the PCU. This mechanism was created as an alternative to establishing a large management unit made up entirely of SOPTRAVI’s own staff and also helped to maintain the momentum on project implementation during the hiatus created by the change in administration at the beginning of 2006. The approach brought in new skills that might otherwise not have been available and also helped foster an environment consistent with achieving implementation results and providing regular reporting on progress. It is important to note however that core implementation responsibilities remained with SOPTRAVI (in the specific departments and units concerned) for the management of contracts in both civil works and technical assistance. It was thus not necessary to set up a project implementation unit (PIU) within SOPTRAVI.

Road maintenance by micro-enterprises can be an efficient management strategy and can also contribute to social development and poverty reduction. The Road Maintenance Pilot Project has proved to be a highly successful initiative at two levels. Firstly, it has proved to be an efficient means of delivering road maintenance services in sections of the public network. Secondly it has become a very effective instrument to generate productive short- term employment for skilled and unskilled workers from the communities near the road zone to be maintained. This type of program is very cost-effective and has good social and economic impacts on the beneficiary zones, such as development of organizational skills, diversification of productive activities and improvement of quality of life.

In order for road maintenance funding objectives to be met, there needs to be in place a sound policy and institutional framework supported flexibly by actions to be taken during implementation. While substantial progress was made under the Project towards greater, more reliable maintenance funding, the original objectives set could not be met. Ensuring upfront the basic legislative requirements for the provision of dedicated funding in the required amounts may not be sufficient. The Project experience reflects the value of having clear understanding on policy, in particular regard to prioritization within a constrained resource framework. Such details would optimally be worked out ahead of time for a follow on project. Nonetheless, the Project also demonstrates the value of reconfirming – and modifying as necessary – road maintenance targets as implementation proceeds and also making sure there is consistent and coherent agreement with all parties, especially SEFIN and the donor community, in support of their achievement.

Management of environmental and social safeguards needs to be integrated into project implementation and both Borrower and the Bank need to be flexible in the allocation of time and resources to this matter. The Project

23 was well prepared in regard to social and environmental aspects. Nonetheless under implementation the Project experienced delays and ultimately the need to undertake significant restructuring due to: the incapability to implement one section of works (San Lorenzo to Olanchito) because of complexity of the environmental issues; the need to undertake remedial actions in regard to the resettlement plan for the road section that was adopted to take the place of this road (Taulabe to La Barca). The Borrower and the Bank were however able to overcome the serious challenges that the circumstances created and the end result for the outcome of the project was very positive. As shown in this case, the effective resolution of safeguard problems that emerge under implementation can be a powerful tool for building capacity for environmental and social management.

7. Comments on Issues Raised by Borrower/Implementing Agencies/Partners

(a) Borrower/implementing agencies

The Borrower’s comments are generally consistent with this ICR’s assessment of the Project with regard to outcomes related to achievements. See Annex 7 for the Borrower’s full comments (in Spanish), the main points of which are highlighted below:

(i) The achievement of project development objectives was highly satisfactory. The realization of the goals for coverage of road maintenance needs was not yet reached however. (ii) The implementation of project components was satisfactory. Roads improved under the project are already under regular maintenance. (iii) The micro-enterprise program has created substantial economic and social benefits in addition to the direct impact on road maintenance provision. (iv) Environmental and social management requirements of the project were successfully accomplished. The specific challenges of the emerald hummingbird habitat and the Taulabe to La Barca resettlement plan were addressed appropriately. (v) The Bank contribution was highly satisfactory both at entry and during supervision (vi) On the government side, the project implementation arrangements were very successful and the practice of contracting out coordination and other services should be encouraged. (vii) The main factors that affected implementation included – delays in effectiveness, longer then expected implementation of the emerald hummingbird action plan; and cost increases suffered in the case of most civil works.

24 (b) Co-financiers

Not applicable.

(c) Other partners and stakeholders

Not applicable

25 Annex 1. Project Costs and Financing

(a) Project Cost by Component (in US$ million equivalent)

(Total rows and percentage column will be calculated by the system)

Appraisal Estimate Actual /Latest Estimate Percentage of Components (US$ million) (US$ million) Appraisal 1. Road Reconstruction, Rehabilitation and 68.8 91.8 133 Improvement Rehabilitation of Tegucigalpa 19.2 20.4 106 Danli Highway Rehabilitation of Jicaro Galan 6.3 10.1 160 – El Amatillo Highway Reconstruction and Rehabilitation of Santa Rita – 18.0 18.5 103 Yoro Improvement of San Lorenzo 11.8 0.0 – Olanchito Improvement of Rio Dulce – 13.5 14.5 108 El Porvenir Improvement of Taulabe – La 28.3 Barca 2. Rural Roads and Bridges 8.5 4.9 57 Program 3. Road Maintenance Pilot 4.0 7.8 195 Project 4. Consultant Services, Technical assistance and 11.5 13.3 115 Training 5. Goods 1.2 0.3 21

6. Audit Fees 0.1 0.2 200 Total Baseline Cost 94.1 118.2 126 Physical Contingencies 12.7 0.0 Price Contingencies Total Project Costs 106.8 118.2 111 Project Preparation Facility 0.0 0.0 (PPF) Front-end fee (IBRD only) 0.0 0.0 Total Financing Required 106.8 118.2 111

26 (b) Co-financing

(The appraisal estimate will be pre-populated from the Financing data in SAP/AUS; Percentage of Appraisal column will be calculated by the system)

Appraisal Actual/Latest Type of Percentage of Source of Funds Estimate Estimate Financing Appraisal (US$ million) (US$ million) Government - 15.1 IBRD/IDA - 73.2 Spain Parallel financing - 19.9 - Nordic Parallel financing - 11.1 - Development Fund

27 Annex 2. Outputs by Component

The project achieved most of its outputs and the overall assessment of the project outputs is rated satisfactory. The Bank’s supportive attitude together with GOH and PCU commitment toward the project was a key element for the accomplishment of the targets appraised under each component.

Component 1: Road Reconstruction, Rehabilitation and Improvement (US$ 68.8 million programmed; US$ 91.8 million disbursed). This component is rated as satisfactory. The component was intended to finance the reconstruction, rehabilitation and improvement of five road sections totaling 262 km. Approximately, US$ 68.8 million were assigned for this component, whose physical targets were almost fully achieved as follows: (i) Tegucigalpa - Danli Highway works were executed between November 2004 and October 2007, with a cost of US$ 20.4 million; (ii) Jicaro Galan – El Amatillo Highway works began in November 2004 and ended in June 2004, reaching a cost of US$ 10.1 million; (iii) Santa Rita – Yoro section works began in February 2002 and ended in March 2005, with a cost of US$ 18.5 million; (iv) Rio Dulce – El Porvenir works started in February 2002 and ended in April 2004, reaching a cost of US$ 14.5 million; and, (v) Taulabe – La Barca works were executed between February 2005 and May 2007, with a cost of US$ 28.3 million. At project completion, 236 km of primary trunk roads were reconstructed, rehabilitated or improved, with a total cost of US$ 91.8 million. The incremental cost of US$ 23 million was due to a variety of factors including: design changes required to improve the chances for these roads to withstand natural disasters, improvements of the road pavement, hydraulic and drainage works, and construction of additional lanes. High cost increases were experienced specially in the Tegucigalpa Danli highway; as a consequence, the extent of the works was reduced from 92 km to 50 km. However, since this section is part of the main Central America corridors, SOPTRAVI has requested funds from the Spanish government supported by Banco Centroamericano de Integración Económica in order to complete its rehabilitation. All these rehabilitated road sections are currently operative and maintained by the Road Fund.

Component 2: Rural Roads and Bridges Program (US$ 8.5 million programmed; US$ 4.9 million disbursed). This component sought to provide reconstruction and rehabilitation of about 550 linear meters of bridges involving the rehabilitation of 100 km of high priority rural roads, and is rated highly satisfactory as explained bellow.

Works were divided in five contracts for five different groups; however, Group 3 was cancelled because it had already been covered by the Road Fund. The other four contracts covered 102 km of rural roads and 566 linear meters of bridges, exceeding the original targets. Group 1 included the rehabilitation of El Chile - Palma Real section and the construction of Rio Blanco bridge in Santa Barbara Department; Group 2 comprised the rehabilitation of San Pedro de Zacapa-Agua Caliente–Azacualpa section and the construction of Jaitique and Agua Caliente bridges in Santa Barbara Department. Group 4

28 included the rehabilitation of Colinas-San Luis-Desvío a Palmira sections in Santa Barbara Department. Finally, Group 5 included the construction of the Río Choluteca (Paso Tamarindo), Agua Fría and Guasure bridges in El Paraíso Department.

In August, 2002, during Project execution, low strength concrete was found in the three bridges in Group 5. A Commission to assess this situation was appointed by SOPTRAVI. During the analysis, it was found that the original designs were not adequate. To resolve this issue, it was agreed to reinforce the affected elements of those bridges, and to undertake a full live load test at the contractor’s expense. Also, to ensure that there were no other design deficiencies in other bridges, a special task team verified the design of the 12 bridges financed under the credit (6 bridges in Santa Rita – Yoro section under Component 1 and 6 bridges under Component 2). The results of the studies were obtained in a very short term, and were included in the design of the bridges under construction. The civil works were successfully completed in May 2004.

Component 3: Road Maintenance Pilot Project (US$ 4.0 million programmed; US$ 7.8 million disbursed). This component is rated highly satisfactory. The component aimed at financing a pilot project on road maintenance with the participation of local communities through the formation of micro-enterprises. The achievement of the component exceeded its expected outputs. During project implementation a total of 70 micro-enterprises were created and are currently working. It is important to mention that with IDA financing, the Road Fund designed and started the operation of the first 36 (compared to 22 projected at project start up) micro-enterprises and the operation and maintenance was also financed until project completion. As a result of this successful pilot project, the road network maintenance works not only improved the road network itself, but also the living conditions of local communities through employment generation and the creation of a micro-entrepreneur culture. The creation of these new enterprises has generated an estimated 899 new job opportunities for skilled and unskilled people, and benefited directly a population of 5,394 (households). Activities carried out by the micro- enterprises comprised: clearing the roadway, clearing road drains, channeling waters, cleaning and painting of bridges, controlling vegetation and clearing gutters and landslides.

Component 4. Consultant Services, Technical Assistance, Training (US$ 11.5 million estimated; US$ 13.3 million disbursed). This component is rated satisfactory. It mainly focused on the provision of technical assistance and capacity building activities.

In terms of technical assistance and support provided to SOPTRAVI, including the Environmental Unit (UGA) and the Management Planning and Evaluation Unit (UPEG), the activities financed by this component comprised: (i) consultancy services for the Project Coordination Unit; (ii) consultancy services for the supervision of the works (Components 1 and 2), (iii) technical assistance for the UGA to include environmental issues in the project cycle and to incorporate safeguard policies applicable to each project; (iv) consultancy services for the design and implementation of the Project Monitoring System and Management Information of the Investments (Sistema de Información Gerencial de las Inversiones – SIGI) for the UPEG; (v) training in HDM-IV

29 for the UPEG; (vi) technical assistance for the UPEG for the maintenance of the bridge system HONDUSAP; and (vii) consultancy services for the FNH (Ferrocarril Nacional de Honduras) for an estimate of railway and immovable assets. All these activities were satisfactorily completed. During project implementation, agreement was reached to carry out: (i) studies for the preparation of the proposed Rural Infrastructure Project; and (ii) two additional studies in the area of urban transport – a national census of passenger service vehicles and a study of options for renewing the bus fleet in Tegucigalpa.

With respect to technical assistance provided to the Road Fund, this component financed consultancy services for: (i) the supervision of routine maintenance provided by the 36 micro-enterprises financed by IDA; (ii) the design of a Certification System for Asphalt and Crushing Plants; (iii) the development of an Attention of Emergencies in the Road Network Manual; and, (iv) the implementation of a Weight and Dimension Control System in Highways.

Training and capacity building activities included seminars and training courses for SOPTRAVI and Road Fund staff. As part of this training program, a total of 35 events were conducted to the benefit of SOPTRAVI staff. 25 of these events were local and 10 were international training events, focusing largely on the following: project management, private participation in infrastructure investments, contract management, project design and implementation. For the Road Fund staff, consultants and contractors, a total of 14 events were conducted, and were focused mainly on updating of road techniques.

30 Annex 3. Economic and Financial Analysis

The methodology used for assessing the ex-post economic returns of the project consisted of evaluating the five road sections under the Road Component. These results were compared to those obtained at appraisal. The evaluations were carried out using the HDM IV model.

The analyses related to the appraisal stage, i.e., the conditions prevailing at the time when the component was submitted for Bank’s approval, were taken to consider essentially the rehabilitation standards proposed, their unit costs, the traffic volumes and pavement condition. For the ex-post analysis, the values of these parameters were adjusted to correspond to the actual timing when these works effectively took place. All costs were converted into constant dollars, and a uniform discount rate of 12% was considered. By and large, the scenario without the project involved routinely maintaining the existing pavement with an IRI value of 5 – 7. The scenario with the project involved executing the reconstruction, rehabilitation and/or improvement immediately, carrying out the routine maintenance policy, with an IRI value of 2.00 to 2.20. Economic benefits consisted essentially of vehicle operating cost savings, including passenger time benefits.

Overall, the consolidated Net Present Value and average Internal Economic Rate of Return for the five road sections was US$ 168.3 million and 33.9% respectively, compared to appraisal values of US$ 90.8 million and 27.3% respectively. These results confirm that the project yielded significant returns that surpassed those anticipated at appraisal.

The high IERR generally obtained for the subprojects suggest that these results were resilient to any traffic reductions which may occur during the analysis period. Sensitivity analysis was carried out in regard to the results obtained for the Tegucigalpa to Danli and Taulabe to La Barca results. A 20% increase in cost combined with a 20% reduction in benefits would reduce the NPV respectively to US$6.2 million and US$24.5 million. The equivalent IERR would be 15.3% and 24.3%.

31

The Table below summarizes, section by section, the results of the economic evaluation.

Economic Costs and Benefits Road Reconstruction, Rehabilitation and Improvement

Length Costs NPV (1) IERR (2) (Km.) (000 US$/Km.) (000 US$) (%) Section SAR SAR SAR SAR Actual Actual Actual Actual Estimate Estimate Estimate Estimate Tegucigalpa - 84.0 50.0 229 355 19.5 15.3 23.2 20.3 Danli Jicaro Galan – El 40.2 40.2 144 304 12.1 21.4 33.7 29.1 Amatillo Santa Rita – Yoro 46.5 46.6 387 385 27.5 32.4 26.9 31.1 San Lorenzo – Olanchito 45.0 252 11.2 23.6 (cancelled) Rio Dulce – El 46.5 47 277 307 20.5 58.7 29.3 52.2 Porvenir Taulabe - La 53.0 53.0 433 459 23.3 40.5 44.4 33.7 Barca (1) Net Present Value Internal Economic Rate of Return

32 Annex 4. Bank Lending and Implementation Support/Supervision Processes

(a) Task Team members Responsibility/ Names Title Unit Specialty Lending Castillo, Aland Senior Social Development SDV Correa, Elena Specialist Corvalan, Cecilia Claudia Sr Transport. Econ. LCSTR Cubillas, Emma Meri Consultant LCSTR Escobar, German Consultant LCSTR Fam, Adel Consultant LCSTR Fernandez Ordonez, Hernan Consultant LCSTR Franz, Juergen Otto A. Graham, Douglas J. Sr Environmental Spec. EASVS James, Emmanuel A. Lead Transport Specialist LCSTR Lead Private Sector Development AFTPS Kopicki, Ronald J. Spec. Lage, Glaura T. Senior Program Assistant LCSDE Ledec, George Campos Lead Ecologist LCSEN Menendez, Aurelio Lead Transport Specialist EASTE Oleson, Kirsten L. Consultant LCSSD Quintero, Juan D. Sr Environmental Engr. EASRE Rapp, Kennan W. E T Consultant LCSSA Rehman, Manzoor Consultant LCSTR Rodriguez, Ana Consultant LCSTR Ruan, Guillermo Sheldon, Stephanie Ann Vergara, Walter Lead Chemical Engineer LCSEN Zarzar Casis, Alonso Sr Social Scientist LCSSO Zelaya, Mario Antonio Consultant MNSHD Zeper, Jacobus Zeron, Luz A. Consultant LCSFM

Supervision/ICR Aguilera, Ana Silvia Consultant LCSTR Archondo-Callao, Rodrigo Sr Highway Engineer ETWTR Bazzana, Selva Consultant LCSTR Berroa, Diomedes Senior Operations Officer ECSPS Blasco, Antonio Leonardo Financial Management Specialist LCSFM Brushett, Stephen J. Lead Transport Specialist LCSTR Cajina, Adan N. Consultant LCSTR Cardona Moran, Astrid Yerlin Consultant LCSFM Carmona Maya, Sergio Ivan Consultant LCSUW

33 Castrellon Sanchez, Fabio Consultant LCSTR Ceneviva, Carlos Consultant LCSEN Senior Social Development SDV Correa, Elena Specialist Corvalan, Cecilia Claudia Sr Transport. Econ. LCSTR Cubillas, Emma Meri Consultant LCSTR Fam, Adel Consultant LCSTR Franz, Juergen Otto A. Klimenko, Svetlana V. Financial Management Specialist LCSFM Lead Private Sector Development AFTPS Kopicki, Ronald J. Spec. Ledec, George Campos Lead Ecologist LCSEN Mallo, Maria Constancia Case Intake Research Assistant INT Martinez, Jose M. Sr Procurement Spec. LCSPT Nogales, Alberto F. Consultant AFTSN Ochoa, Martin H. Consultant LCSEN Patino, Oswaldo Consultant LCSTR Prada Villalobos, Luis R. Sr Procurement Spec. LCSPT Raposo, Gustavo Castro F. Finance Analyst LOADM Rehman, Manzoor Consultant LCSTR Rodriguez, Ana Consultant LCSTR Roman, Enrique Antonio Financial Management Specialist LCSFM Ruan, Guillermo Russo, Francesca Consultant LCSTR Sevilla, Manuel Swami, Rajeev Kumar Sr Financial Management Specialist LCSFM Valencia De Estrada, Rosa G. Consultant LCSPT Veizaga, Mary Lou M. Procurement Analyst LCSPT Vilar, Kimberly E T Consultant LCSSO Villegas, Jorge E. Social Development Spec. CESI2 Zambrano Chavez, Marco Consultant LCSTR Antonio Zegras, Christopher P. Consultant LCSTR Zeron, Luz A. Consultant LCSFM

34 (b) Staff Time and Cost Staff Time and Cost (Bank Budget Only) Stage of Project Cycle USD Thousands (including No. of staff weeks travel and consultant costs) Lending FY99 - 70,678.48 FY00 34.74 137,820.92

Total: 34.74 208,499.40 Supervision/ICR FY01 23.55 121,778.04 FY02 14.71 65,390.20 FY03 15.87 83,401.42 FY04 16.39 88,255.49 FY05 10.58 73,551.26 FY06 15.24 97,841.87 FY07 13.29 98,703.61 FY08 4.37 57,521.58

Total: 114.00 686,443.47

35 Annex 5. Beneficiary Survey Results

Not Applicable

36 Annex 6. Stakeholder Workshop Report and Results

Not Applicable

37 Annex 7. Summary of Borrower's ICR and/or Comments on Draft ICR

INFORME FINAL DEL PRESTATARIO

1. Evaluación de los Objetivos

Objetivos originales del Proyecto consistían en: (1) la restauración de los caminos dañados por el Huracán Mitch, (2) el mejoramiento de los corredores viales de intercambio comercial en el país y (3) el de establecer un marco financiero e institucional sustentable y transparente para el subsector vial del país. A continuación de describen los logros alcanzados durante la ejecución del proyecto.

Logros Alcanzados

El proyecto “Mejoramiento y Reconstrucción de Carreteras” fue ejecutado de forma altamente satisfactoria. En relación al objetivo 1: restauración de caminos dañados por el Huracán Mitch, las metas del proyecto fueron alcanzadas y un total de 102,1 km de caminos rurales y 565,7 m de puentes de la red secundaria y terciaria del país fueron rehabilitados o reconstruidos, apoyando al financiamiento en paralelo por otras entidades multilaterales.

Con respecto al objetivo 2: mejoramiento de corredores viales de intercambio comercial en el país, el Proyecto financió exitosamente la rehabilitación y mejoramiento de 232.2 km. que forman parte de los principales corredores de Centroamérica y del país. Las obras ejecutadas han tenido un impacto positivo medido tanto por la reducción del tiempo y de los costos de operación vehicular.

En cuanto al objetivo 3: establecer un marco financiero e institucional sustentable y transparente para el sub-sector vial del país, SOPTRAVI actualmente cuenta con los mecanismos para realizar una gestión organizada y eficiente que asegure la inversión en áreas prioritarias para el desarrollo económico, la competitividad y el combate a la pobreza. El Proyecto apoyó a las Unidades de Planificación y de Gestión Ambiental de SOPTRAVI, al Fondo Vial y al Ferrocarril Nacional de Honduras; además, para fortalecer la capacidad ejecutiva y de administración integral de SOPTRAVI se realizó acciones de fortalecimiento en las áreas de gestión; planeamiento estratégico y de inversiones, pago y contrataciones, recursos humanos, gestión ambiental, seguridad vial, entre otras.

Respecto de la cobertura de mantenimiento en la red vial nacional, se logró sólo el 60% en relación con el 70% de la red vial nacional (principal, secundaria y vecinal) inicialmente proyectado, debido a la insuficiente asignación de recursos para el Fondo Vial.

38 2. Componentes Original y Revisado

Componentes originales: el costo total del Proyecto fue de US$ 66,5 millones provenientes del crédito y US$ 40,3 millones del aporte local. El crédito se distribuyó en los cuatro componentes siguientes: (a) Reconstrucción, Rehabilitación y Mejoramiento de Carreteras: (a.1) rehabilitación de cerca de 84 km del tramo Tegucigalpa–Danlí, (a.2) rehabilitación de cerca de 40 km. del tramo Jícaro Galán–El Amatillo), (a.3) reconstrucción y rehabilitación de cerca de 47 km del tramo El Negrito–Portillo de Chancaya, sección de la carretera Santa Rita–Yoro, (a.4) mejoramiento de aproximadamente 45 km de la carretera Olanchito-San Lorenzo, (a.5) mejoramiento de cerca de 47 km. del tramo Río Dulce-El Porvenir; (b) Programa de Caminos Rurales y Puentes; (c) Programa Piloto de Mantenimiento Vial; y (d) Administración y Supervisión del Proyecto: (d.1) Asistencia técnica a SOPTRAVI para: (1) supervisión de los trabajos de los componentes a y b, y (2) asistencia técnica al Fondo Vial para la supervisión del componente c, (d.2) fortalecimiento de la DGC, UPEG y UGA en áreas relacionadas con diseño y supervisión de puentes, planificación y ambiente, a través de la provisión de asistencia técnica u adquisición/ utilización de bienes que sean requeridos, (d.3) asistencia técnica al Fondo Vial con el objeto de: (1) fortalecer su capacidad administrativa y técnica, y (2) capacidad para monitorear y evaluar las obras que se ejecutaran en el componente c del Proyecto, (d.4) asistencia técnica a SOPTRAVI para la implementación del Plan de Acción que resultara del Estudio del Ferrocarril, (d.5) programa de capacitación en operación vial a: (1) SOPTRAVI y (2) Fondo Vial, (d.6) asistencia técnica a SOPTRAVI para la administración, coordinación, y evaluación de la ejecución del Proyecto.

Componentes revisados: el Proyecto fue implementado satisfactoriamente. El monto ejecutado con recursos del crédito fue de US$ 73.24 millones y el de aporte local, de US$ 13.72 millones. Uno de los subcomponentes revisados fue a.4, que pasó a la realización de estudios relacionados con el mejoramiento de aproximadamente 45 km la carretera Olanchito-San Lorenzo -modificado en la segunda enmienda- (el resto de subcomponentes se mantuvo igual). A solicitud del Ministro de SOPTRAVI, el Banco Mundial aprobó una primera redistribución de los fondos, reasignando los recursos no comprometidos al 2003 para poder atender las Obras de Mejoramiento en el Tramo de la Carretera del Norte CA-5 “Taulabé-La Barca” de aproximadamente 53 km, en reemplazo del Proyecto “Pavimentación Carretera Olanchito-San Lorenzo”, dado que el proceso para llevar previamente a cabo el Plan de Acción para la protección del colibrí Esmeralda Hondureño que se ubica en ese corredor vial, no podía haberse finalizado en un tiempo que permitiera contratar y efectuar los trabajos antes del vencimiento del plazo de vigencia del Crédito. También se revisó el componente c, donde se produjo un aumento en el número de kilómetros que iba a ser atendido por las MEACV: de 900 ó 1 000 kilómetros previstos inicialmente a 1 670.

2.1. Componente a: Reconstrucción, Rehabilitación y Mejoramiento de Carreteras El proyecto realizó obras de mejoramiento, pavimentación, construcción o

39 reconstrucción de carreteras y puentes que forman parte de la red vial nacional; el correspondiente mantenimiento está a cargo del Fondo Vial. También, se elaboró el Plan de Mantenimiento Vial 2007-2010 (aprobado por la SEFIN y las instituciones que conforman la Mesa de Cooperantes), en el cual se describe los compromisos del Fondo Vial, como la revisión y validación del inventario vial, actualización de los costos de las operaciones de mantenimiento vial, entre otros; y se definió el Plan Plurianual de Inversiones de Mantenimiento.

Actualmente, los siguientes tramos mejorados bajo este componente reciben mantenimiento rutinario por parte de las microempresas: Santa Rita-Yoro, El Negrito- Portillo de Chancaya, Río Dulce-El Porvenir, Tegucigalpa-Danlí (hasta el kilómetro 50), Jícaro Galán-El Amatillo y Taulabé-La Barca.

2.2. Componente B: Programa de Caminos Rurales y Puentes Con este componente se realizaron obras de reconstrucción y rehabilitación en un total de 102,1 km de caminos rurales y 565,7 m de puentes distribuidos en cuatro contratos. El primer contrato incluía el tramo El Chile-Palma Real y la construcción del puente Río Blanco N° 2; el segundo, el tramo San Pedro de Zacapa-Agua Caliente-Azacualpa y la construcción de los Puentes Jaitique y Agua Caliente; el tercero comprendió la rehabilitación de los tramos Colinas-San Luis-Desvío a Palmira; y el cuarto, la construcción de los puentes Río Choluteca (Paso Tamarindo), Agua Fría y Guasure.

También se ha realizado intervenciones para hacer trabajos de mantenimiento periódico de caminos vecinales y puentes en los tramos rehabilitados como parte del Programa de Caminos Rurales y Puentes y de acuerdo con las prioridades definidas en el Plan de Mantenimiento Vial. Los tramos en cuestión son los siguientes: El Chile- Palma Real-Los Puentes, San Pedro Zacapa–Agua Caliente, V-690–Azacualpa, San José de Las Colinas–San Francisco–El Carrizal–San Luis y Carretera Oropolí-Alauca.

2.3. Componente c: Programa Piloto de Mantenimiento Vial El Fondo Vial está atendiendo un 93,4% de la red vial pavimentada (principal y secundaria) a través de 70 microempresas que están dentro de un programa de capacitación para su fortalecimiento y expansión de servicios en otras áreas productivas. Dicho programa funciona en el Fondo Vial permanentemente, y desde su instauración es perceptible una gran diferencia en el estado de limpieza de las vías atendidas. Por otro lado, los microempresarios han comenzado a realizar, como parte de su funcionamiento, apertura de cuentas bancarias, relación con entes financieros nacionales y el BM, rendición de garantías contractuales, reuniones de su Junta Directiva, manejo y control de fondos, etc. Asimismo, han sido capacitados en áreas como aprovechamiento de desechos para su reciclaje, alfabetización y proyección social.

El Proyecto ha generado desde su inicio en el año 2001 hasta este año 2007 un aumento: (i) del número de microempresas: de 36 a 70; (ii) del número de socios: de 498 a 899; (iii) del número aproximado de beneficiarios directos (familiares): de 2 988

40 a 5 394; (iv) en la cobertura de la red vial atendida: de 1 694 km a 2 779 km; y (v) del porcentaje de la red vial pavimentada: de 61,03% al 93,41%. Asimismo, en cumplimiento del compromiso del 100% de cobertura en mantenimiento rutinario de la red vial nacional para el año 2010, se ha iniciado acciones con el fin de establecer paralelamente para la red vial vecinal el Programa Peón Caminero.

2.4. Componente de Administración y Supervisión del Proyecto Se ha llevado a cabo el fortalecimiento de la capacidad funcional y operativa de la DGC, UGA y de la UPEG mediante el apoyo y asistencia técnica prestada por consultores contratados para este fin.

Cabe mencionar que se produjo la extensión de la fecha de cierre del convenio del 31 de marzo de 2006 hasta el 30 de junio de 2007, a solicitud de la SEFIN; así como la extensión parcial de la fecha de cierre del convenio al 30 de setiembre de 2007, únicamente para los servicios de la UCP y con el objetivo de preparar el informe final de ejecución del Proyecto y los reportes financieros, apoyar en la administración de los reclamos respecto de la construcción de las obras de Taulabé-La Barca, asistir a SOPTRAVI en las acciones tendientes a asegurar la implementación del Plan Remedial de Reasentamiento Involuntario de Taulabé-La Barca y los arreglos para su posterior monitoreo, y preparar el ICP.

3. Programa de Microempresas Asociativas de Conservación Vial

Este programa ha impulsado el desarrollo el desarrollo de las familias que lo integran. El nivel de vida de los microempresarios ha mejorado en cuanto a alimentación, posibilidades de educación para sus hijos, vestimenta, vivienda (el 45% de los 508 socios construyó su casa y el resto hizo mejoras a su vivienda); algunos han podido comprar terrenos y animales. Por un lado, algunas microempresas han diversificado sus actividades: el 42% de 36 microempresas se dedica al cultivo de maíz, frijoles, hortalizas y café; el 14%, a la cría de peces. El 44% vende la basura que recoge durante sus labores de mantenimiento vial para que sea reciclada. Por otro lado, muchas, se proyectan en sus comunidades a través de la realización de limpieza de colegios, escuelas, campos de fútbol, postas policiales, iglesias; traslado de enfermos a hospitales, de muertos, de merienda escolar; ofrecer mano de obra para reparar escuelas; entre otras actividades. Asimismo, el 8% posee tienda de consumo; el 5,5% tierra para cultivo; el 55%, su sedes; el 11%, terreno para construir la sede y el 100%, vehículos.

4. Planes de Mitigación Ambiental

Con relación a la rehabilitación y mejoramiento de carreteras y la rehabilitación de caminos vecinales y puentes, para reducir los efectos negativos ocasionados por la ejecución de las obras, se incluyó en los términos de referencia para estudios y los de supervisión, en los documentos de licitación para la ejecución de obras y en los documentos contractuales, las acciones que se debían tomar con el fin de minimizar e incluso mejorar las condiciones ambientales. Durante la ejecución de las obras se dio

41 cumplimiento de los compromisos adquiridos en los contratos de medidas de mitigación suscritas con la SERNA para la obtención de licencias ambientales, el monitoreo diario de la calidad de las obras y prácticas ambientales de los contratistas, el seguimiento periódico de la ejecución de las obras, la evaluación de la calidad de la supervisión ambiental de las obras por parte de la UGA y la coordinación de las evaluaciones ambientales que la AIF solicitó.

Por otro lado, se realizó actividades contempladas en el Plan de Acción para la Protección del Colibrí Esmeralda y su hábitat, las cuales fueron: (i) catastro rural y censo de ocupantes, mediante Convenio Interinstitucional SOPTRAVI-SAG, finalizado en diciembre de 2006; (ii) declaratoria como Área Protegida, bajo la categoría Área de Manejo Hábitat/Especies, al Polígono de Tiro de la Fuerza Aérea (1 200 hectáreas), mediante Decreto del Congreso Nacional Nº 159-05; (iii) protección al Polígono de Tiro de la Fuerza Aérea, ejecutado por la FUPNAPIB, consistente en la demarcación y cercado con sus respectivos hitos y rótulos, tal como lo establece el reglamento de áreas protegidas, y la construcción de un Centro de Visitantes; y (iv) estudio para la identificación y registro de propietarios de potenciales servidumbres ecológicas/reservas privadas para el establecimiento de incentivos para la conservación del colibrí esmeralda.

5. Plan Remedial de Reasentamiento Involuntario (PRRI)

Previo a la ejecución de las obras comprendidas en el Proyecto, se elaboró e implementó los respectivos planes de reasentamiento, que incluyeron la toma de todas las medidas que permitieron restaurar, y en la mayoría de los casos, mejorar las condiciones de vida para las personas desplazadas al nivel que tenían antes de producirse el desplazamiento. La totalidad de las personas desplazadas se asentaba dentro de los límites del Derecho de Vía, que legalmente es propiedad del Gobierno de Honduras, por lo que al ser reubicados, se les proveyó derechos de posesión sobre los terrenos en que se ubicaron finalmente. En cuanto a las demás afectaciones, los propietarios fueron debidamente indemnizados con el pago del valor del área o de las mejoras.

El proceso de reasentamiento fue realizado en tres grandes fases: (i) negociación y avalúos de terrenos y mejoras; (ii) elaboración de la línea base; y (iii) asesoría técnica. Los objetivos del Proyecto en función de este proceso fueron: (i) continuar con el control y seguimiento del desarrollo de las acciones de la implementación del PRRI del proyecto de la Carretera CA-5 Norte, Tramo Taulabé–La Barca; y (ii) brindar asistencia al personal de la UGA sobre la implementación del PRRI.

Los avances en la implementación del PRRI se enmarcan en el Programa de Mejoramiento de Vivienda y en el Programa de Reactivación Económica. En cuanto al primero, se tiene que en el Reasentamiento de Prado Alto, se continúa con avances en la construcción de las viviendas. Actualmente, están finalizadas seis viviendas y dos están a nivel de levantamiento de paredes y estructura del techo. En tanto, en el Reasentamiento de Brisas del Bambú, se ha finalizado la construcción de cuatro

42 viviendas y están en proceso de levantamiento de paredes seis viviendas. En este sector se realizó un aprovechamiento de la madera de pino en la construcción de puertas, ventanas y paredes. Esta actividad fue coordinada por el técnico ambiental de la UGA de SOPTRAVI.

Con relación al Programa de Reactivación Económica, se realizó reuniones de seguimiento con la cooperativa de vendedores de frutas del sector de la comunidad de San José de Balincito, caja rural Las Cascadas, la cual ya cuenta con personería jurídica. Los vendedores están ubicados en el plantel construido por el PRRI; que cuenta con el servicio de energía eléctrica suministrado por la ENEE, y por iniciativa de los vendedores de fruta, con suministro de agua. Asimismo, se construyó varias letrinas de fosa simple para uso de los clientes y de los miembros de la asociación de vendedores, y las bahías de lavacarros, al igual que todo el plantel, funcionan de acuerdo con el reglamento y estatutos establecidos durante el desarrollo del PRRI.

En cuanto a los tipos de afectaciones, se tiene que en los tramos El Negrito-Portillo de Chancaya y Río Dulce-El Porvenir se ha realizado 32 afectaciones: (i) terreno parcial: 21; vivienda parcial: 1; vivienda total: 4; vivienda-negocio: 1; negocio parcial:3, afectaciones menores con pago de indemnización: 1, y escuela parcial: 1: En el tramo Taulabé- La Barca, se realizó 242 afectaciones: vivienda parcial: 83; vivienda total: 35; vivienda-negocio:13; y negocio parcial: 7; negocio total: 27 fruteros y 23 lavadores de carros; afectaciones menores con pago de indemnización: 54. En este tramo, se proporcionó apoyo técnico y legal a los vendedores de fruta y lavadores de carros que ejercían sus actividades dentro del Derecho de Vía, para constituirse en asociaciones con personería jurídica, lo que permitió fundar a los lavadores de carros la cooperativa mixta Jardines de Taulabé, y a los vendedores de fruta y los afectados en sus viviendas, la Caja Rural de Ahorro y Crédito La Cascada, con asesoría en autoconstrucción y organización comunitaria.

6. Papel del Banco

En la fase de preparación del Proyecto, la rapidez del trabajo del Banco en cuanto a trámites fue altamente satisfactoria, en especial el correspondiente a la suscripción del Crédito. El Banco realizó un seguimiento periódico a través de las misiones de supervisión financiera, técnica, administrativa, de adquisiciones y de salvaguarda ambiental y social. Hubo una estrecha colaboración de los especialistas asignados en esas misiones con las unidades ejecutoras del Proyecto, lo que permitió contar con una asesoría y asistencia permanente en las respectivas áreas. Asimismo, el seguimiento al cumplimiento de los compromisos facilitó el desarrollo del Proyecto, pues la supervisión fue constante y no se limitó a las visitas periódicas.

El desempeño del Banco se considera excelente, especialmente debido a la rápida atención de solicitudes de No-Objeción y a la asesoría brindada en cuanto a las asistencias técnicas contratadas. A iniciativa del Banco, se realizó talleres para analizar temas como el Plan de Acción para la protección del Colibrí Esmeralda, y los resultados de estudios sobre transporte. También, deseamos destacar el desempeño de

43 los task manager, el cual ha sido muy satisfactorio, dado que siempre se mantuvo una muy buena comunicación, y fueron muy eficientes en su función.

7. Papel del Prestatario Durante la fase preparatoria (y de la implementación), los funcionarios involucrados en el Proyecto mantuvieron una estrecha comunicación con las Unidades Ejecutora y Coordinadora del Proyecto (UEP; UCP), las que trabajaron coordinada y eficientemente. Sin embargo, hubo atrasos en el cumplimiento de condiciones previas, debido a los cambios en el Gobierno.

En cuanto a los fondos de contrapartida, éstos fueron oportunamente incluidos dentro del presupuesto asignado anualmente a las Unidades Ejecutoras en SOPTRAVI y Fondo Vial, y las asignaciones adicionales solicitadas fueron ubicadas en forma ágil, por lo que los pagos se realizaron con fluidez. El cambio al sistema de pagos (SIAFI), contribuyó a disminuir el tiempo de pago.

El trabajo de la UCP (ASP consultores) se puede calificar como excelente para los seis años del contrato. Esto, además de contribuir con el cumplimiento de metas y objetivos, también apoyó a SOPTRAVI en el desarrollo de otros proyectos no incluidos en el contrato y a recibir oportuna asesoría en la solución de problemas técnicos, legales y administrativos. Asimismo, mantuvo una buena comunicación con el Banco Mundial, los funcionarios de SOPTRAVI, Fondo Vial y otras instituciones involucradas en la ejecución del Proyecto.

El apoyo recibido permitió el cumplimiento de las condiciones legales y de las obligaciones fiduciarias y de salvaguardias contempladas en los términos contractuales del Proyecto. En general, el desempeño del Gobierno y de la UCP ha sido satisfactorio como lo demuestran los resultados obtenidos, ya que todas las instituciones involucradas en el Proyecto cumplieron eficientemente sus responsabilidades, respetando los convenios interinstitucionales suscritos.

8. Factores que Afectaron la Implementación y Resultados del Proyecto

El conocimiento por parte del team leader de la realidad del país y de las instituciones responsables del manejo de la red vial, producto de su actividad como task manager de anteriores créditos que estaban en su etapa de implementación durante la preparación del Proyecto, permitieron que en el diseño de éste se tomara en cuenta las lecciones aprendidas de los anteriores proyectos para mejorar el nuevo, así como que se pudiera percibir los diferentes grados de riesgo en su implementación.

Para la entrada en vigor del crédito (condición de efectividad), hubo atrasos por parte de la SEFIN en los procesos de contratación de las empresas que se encargarían de: la auditoria del Crédito y de la coordinación del Proyecto (Unidad Coordinadora). En ambos casos, en la aprobación del financiamiento de los contratos generando un retraso de un año.

44 Durante la fase de implementación del Proyecto, la imposibilidad de implementar satisfactoriamente el plan de acción diseñado para la protección del colibrí Esmeralda y su hábitat produjo un desfase de 15 meses (lo que incidió en la modificación de la fecha de cierre: del 31 de marzo de 2006 al 30 de junio de 2007). Ello originó la solicitud de SOPTRAVI para postergar las obras del Proyecto, y en su lugar incluir el mejoramiento del tramo Taulabé-La Barca de la CA5- Norte.

Cabe indicar que hubo sobrecostos en la ejecución de las obras en general: la totalidad de las obras construidas tuvieron costos adicionales cuyas principales causas fueron: (i) cambios radicales introducidos por el respectivo supervisor sobre los diseños originales; (ii) considerable desfase entre la fecha de preparación de los diseños y el inicio de las obras; (iii) escalamiento o ajuste de precios en grado significativamente mayor al considerado en el presupuesto de obras y (iv) ampliación al alcance del contrato por adición de obras no contempladas originalmente pero que por disponibilidad financiera dentro del crédito fueron incluidas. Asimismo, los plazos de ejecución fueron ampliados para la ejecución de obras adicionales.

45 Annex 8. Comments of Cofinanciers and Other Partners/Stakeholders Not Applicable

46 Annex 9. List of Supporting Documents

1. Project Concept Note, 2. Project Appraisal Document, 3. Aide Memories, Back to Office reports and Project Status Reports 4. Project Paper for Restructuring, January 2007

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